IDENTIFYING
OPPORTUNITIES IN
DEVELOPING MARKETS
Karthik Rao
May 2, 2013
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
WHERE IS THE GROWTH COMING FROM?
52%
DEVELOPING MARKETS
WILL BE 80%
OF WORLD GDP
OF WORLD POPULATION
THAT WILL BE
MIDDLE CLASS BY 2020
2
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
A STORY OF TAILWINDS AND HEADWINDS
TAILWINDS
HEADWINDS
Urbanization
Rising costs
Income growth
Slowing growth
Premiumization
Consumer "Diversity”
Modern Trade Growth
Retail fragmentation
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LOCAL COMPETITION – FORMIDABLE… GROWING
Manufacturer Sales Projection
5 Categories Aggregated– All BRIC Markets
+57%
POINTS OF DIFFERENTIATION
10,000
8,000
+102%
They innovate
•
Strong in mid/lower price tiers
•
Stronger in Rural areas /
Traditional Trade
•
Relentlessly work distribution
4,000
2,000
TOP LOCAL
2015
2014
2013
2012
2011
2010
2009
0
2008
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
6,000
•
TOP M-N COMP
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LOCAL GIANTS LAUNCH: CHINA EXAMPLE
Blue Moon in China, 1st major brand to enter the liquid laundry segment, gaining share
Blue Moon Share Trend
Value Share by Fiscal Year
BLUE MOON PRODUCTS
45.0
40.0
35.0
FIRST MAJOR
LIQUID LAUNCH
IN CHINA
30.0
20.0
15.0
10.0
5.0
IN LIQUID
FY '10 - '11
FY '09 - '10
FY '08 - '09
FY '07 - '08
0.0
FY '06 - '07
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
25.0
IN CATEGORY
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
FORMIDABLE CHALLENGER TO MARKET LEADER - INDIA
WHAT THEY DID WELL
1. Innovation
2. Optimal Distribution Expansion
WEIGHTED DISTRIBUTION
NESTLE
INDO NISSIN
GSK
HUL
ITC
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
FORMIDABLE CHALLENGER TO MARKET LEADER - INDIA
HOW DID THEY WIN
Market Share
Results
ITC YIPPEE % MARKET SHARE
•
Differentiated Yippee
successfully from Maggi
noodles
•
Captured nearly 10% of
market in 2 years
9.7%
5.7%
LAUNCH
2010
2011
2012
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PREMIUMIZATION
CHINA
INDIA
20%
18%
20%
16%
14%
10%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
TOTAL
FMCG
ECONOMY
MASS
15%
10%
PREMIUM
THAILAND
TOTAL
FMCG
ECONOMY
MASS
INDONESIA
18%
12%
10%
7%
TOTAL
FMCG
12%
9%
6%
ECONOMY
PREMIUM
MASS
PREMIUM
TOTAL
FMCG
ECONOMY
11%
MASS
PREMIUM
VALUE CAGR OF ‘PREMIUM’ SEGMENT: 2010-2012
8
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
INNOVATION……FINDINGS FROM CHINA…
BUILD A SEPARATE
INNOVATION TEAM
MAKE TIME FOR
IDEATION
LAUNCH WITH
EXCELLENCE
HAVE A RIGID AND
CONSISTENT PROCESS
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
SUMMARY
•
Headwinds, tailwinds…..who cares….long ways to go with tons of
opportunity…….local competition: study them, partner with
them…..buy them!
•
Turn consumer diversity & retail fragmentation into your
friends……there is no other way
•
Premiumization is real – think of it as a consumer trend that
needs marketing, not the other way around
•
Innovation & process…..it’s what differentiates MNCs against
local competition
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