Issue 97 January 2002 The global leader in market research, information and analysis inside Retail Shake-Up in Taiwan 2 Exclusive Web deal in China 3 Double Homepanel Launch in Manila 3 Jump-Start for Business in New Zealand 5 Online Success Secrets 6 Billion-Dollar Brands 8-9 Private Labels Take Off in HK 10 Shopping Turnaround in Korea, Thailand 14 A Time to Remember 16 Retail Markets Due for Shake-Up The grocery trade can expect a period of continued consolidation across the region, according to the latest research into Asia Pacific retail trends. A newly released ACNielsen Retail Study provides useful clues about how this market is structured and the forces that are likely to drive change. While the highest concentration of grocery stores is in New Zealand, Japan and Taiwan, China and Indonesia dominate in terms of total number of stores. Between them, the two countries boast 83% of the 5.5 million retail stores in Asia Pacific, excluding India. City dwellers in Taiwan shop at modern grocery stores 41 times per month, more often than their counterparts in Hong Kong and Singapore. There is one grocery store for every 100 people in Indonesia, with one store for every 740 people in Taiwan, one for every 800 in Japan and one for every 1,500 in Hong Kong. The study shows the trend towards concentration in the grocery trade continuing in Asian markets. “Although Indonesia has the highest penetration of grocery stores, the majority “Differences between countries have implications for marketing strategies across the region … [country-specific patterns] should be known and understood by marketers.” are traditional stores,” said Jessie Lai, senior associate director, ACNielsen Retail Measurement Services. “For modern trade channels, New Zealand ranks first with one convenience store per 2,000 people while Japan ranks second with one store per 3,000 people and Taiwan third with one store per 4,000 people.” In terms of supermarket penetration, Japan leads the region with one supermarket per 2,000 people, followed by Korea with one per 3,000 people. By comparison, Taiwan has only one supermarket per 17,000 people. Concentration is evident in the fast growing market share of the large grocery chains based on turnover. In many markets, the combined share of the five biggest chains is growing each year, reaching almost 90% in New Zealand, Australia and Hong Kong, and more than 50% in Singapore. Continued on page 2. Continued from page 1. “Faced with growing internationalisation of grocery chains and the corresponding competitive challenges, we expect Asia Pacific to see a continued trend of alliances, mergers and acquisitions,” Lai said. “Consumers in metropolitan cities in Taiwan are used to frequenting grocery stores and they visit different types of stores on different occasions. This pattern should be known and understood by marketers.” The ACNielsen study covers grocery outlets, traditional stores, discount marts, supermarkets, convenience stores and personal care stores. Besides annual tracking of the grocery trade channels, ACNielsen also interviews consumers in main cities to find out their shopping behaviour. ACNielsen’s Asia Pacific Retail Study is used by retailers and manufacturers to provide analysis of changes and comparisons among the Asia Pacific grocery market. “Differences between countries have implications for marketing strategies across the region,” Lai said. “For example, an average Taiwanese consumer visits convenience stores 41 times a month, far higher than the 28 trips for consumers in Singapore and Hong Kong. Hong Kong Prices Make a Difference Hong Kong consumers care more about price fluctuations than their counterparts in Singapore. Such insights into price elasticity can be found in the latest ACNielsen research into regional retail trends. The study is complemented by ACNielsen|Advisor, web-based software that allows clients to obtain and analyse up-to-date market information over the Internet. The average brand price elasticity in Asia Pacific is about 2.5. Hong Kong is among the highest, with a price elasticity of 3.7, which means price changes have a stronger influence on Hong Kong consumers. In Singapore, meanwhile, price elasticity is only 1.2, showing that Singaporeans are less sensitive to price changes. The average brand price elasticity in Taiwan is 2.1. China on the Web: Exclusive Access for Nielsen//NetRatings Nielsen//NetRatings, the world’s fastestgrowing Internet measurement service, has received government approval to conduct Internet research in China. In doing so, Nielsen//NetRatings is the first market research and measurement service to be officially approved by the Chinese Government to measure Internet behaviour in the world’s most important emerging economy. Nielsen//NetRatings has worked diligently with the Chinese Government to adhere to all regulations and policies and to ensure the integrity of its Internet measurement information, as well as the protection of panelists’ privacy. In compliance with regulations and to localise the service offering, Nielsen//NetRatings has involved a Chinese company in software development and testing. “This official approval marks a watershed for the Nielsen//NetRatings service in Asia and on a global level,” said Bill Pulver, president, ACNielsen eRatings. “It means we are the only Internet research company with our finger directly on the pulse of Web trends in the most populous nation in the world. We will also be in a position to deliver the most comprehensive 2 Chinese-language service to the Greater China community in mainland China, Hong Kong, Taiwan and Singapore. “We are the only Internet research company with our finger directly on the pulse of Web trends in the most populous nation in the world … to deliver the most comprehensive Chineselanguage service to the Greater China community in mainland China, Hong Kong, Nielsen//NetRatings tracks the entire spectrum of Internet user behaviour in real time – who’s online, where they’re going, what banner ads they’re viewing and clicking on, and how much time they spend using the Internet. This information is derived from randomly selected consumer panels of home Internet users, continually refreshed to reflect the most current Internet universe. Nielsen//NetRatings has started to build its audience measurement panel in China and the service is expected to be operational in early 2002. Nielsen//NetRatings will initially offer services that track Internet audience and advertising activity on a monthly basis, with more value-added services to be rolled out as the market develops. Taiwan and Singapore.” “Industry estimates reveal the Asia Pacific region is set to become the engine-room of growth for global Internet access and usage over the next few years – and China will spearhead this trend. The addition of China adds the Internet activity of over 20 million people to our global measurement footprint.” 2 KN Tang to Retire after 33 Years KN Tang, chairman of ACNielsen Asia Pacific, is calling it a day after 33 years of service. From 2002, he will relinquish day-to-day duties and act as chairman emeritus of ACNielsen Asia Pacific. Over the past three decades, KN has participated in the birth of market research in the region, promoting its acceptance and application in many areas of business and public policy decision making. “KN will leave a legacy that will long outlast his 33 years in the industry,” said Michael P Connors, vice chairman, ACNielsen Corporation. “He will be long remembered by an organisation that will forever carry his imprint.” In recent years, KN helped integrate and transform The SRG Group, an entrepreneurial set-up, into a global business as part of ACNielsen and VNU. “I am very fortunate to have worked in an organisation that has provided me with the opportunity and support to achieve all that I have wanted to accomplish,” KN said. Farewell letter, see page 16. Double Homepanel Launch in Manila ACNielsen has launched its largest Homepanel service in the Philippines, monitoring the shopping habits of 1,200 households in the Greater Manila area. For the first time, retailers and manufacturers receive valuable insights into consumer purchasing behaviour for any segment of the population across all retail outlet types. The size of the panel means accurate readings for all categories, even for products with low penetration levels, and the ability to drill down for deeper analysis. To coincide with the Homepanel launch, the Philippines is also the roll-out market for a new integrated retail and consumer panel product in Asia Pacific. A proven performer in the tough European market, it combines Homepanel results with Retail Index data in a single-access database, which can also be accessed via the Internet. The single-access nature of the database means common delivery tools, coding structures, store definitions and regular reporting periods. As well, clients have the benefit of single-servicing across the different research segments of trade, panel, media and consumers. 3 Soft Drinks Fail to Quench China’s Love Affair with Tea Tea continues to defy all challenges to its position as the most popular beverage in China, unlike other parts of the world where soft drinks are number one. Tradition also reigns supreme when it comes to the variety most favoured by Chinese consumers – the best-selling thirst quencher is traditional Chinese flavour. Within the tea market, ready-to-drink tea is enjoying a surge in popularity. In the twomonth period of June and July, the sales value of ready-to-drink tea grew 94% over April – May, according to the latest Retail Index report released by ACNielsen. With sales volume growing at an equally impressive 95%, ready-to-drink tea has become the fastest-growing beverage category in China. The China Experts ACNielsen Retail Services has been providing sales trend information and market insights to manufacturers and retailers in China since 1994. Our extensive reach means we measure FMCG sales in over 50 categories in 8,000 retail outlets in over 200 cities and towns throughout the country. It’s no wonder we are the number-one market research company in China. “Ready-to-drink tea, a relatively new category that emerged just two years ago, has become a significant force showing sustained high growth,” said Alistair Watts, managing director, ACNielsen China. “Health consciousness among Chinese consumers is driving growth. Besides tea, other health-driven subcategories including juice, yoghurt and packaged water have all gained in value importance.” “The combined appeal of traditional Chinese flavour and convenience is driving the success of this category, which is gaining share at the expense of carbonated soft drinks. “It is a worldwide trend that while soft drinks are the fastest-growing among the drinks market, non-carbonated drinks have grown faster than carbonated ones. It may be fruit juice or bottled water in some markets, but in China it’s tea, naturally.” According to ACNielsen Retail Index (June – July 2001), the relative value of tea among the entire beverage market has grown to 13% from 9% last year in the four mega cities of Beijing, Shanghai, Guangzhou and Chengdu. In contrast, the share of carbonated soft drinks shrunk to 48% from 58% during the same period. In Beijing, Shanghai, Guangzhou and Chengdu alone, ready-to-drink tea increased 58% in sales volume and 59% in value during June and July 2001 compared with the same period last year. The four-city total non-alcoholic beverage market increased 16% to RMB713 million (US$86 million) from last year. “Health consciousness among Chinese consumers is driving growth,” Watts said. “Besides tea, other health-driven subcategories including juice, yoghurt and packaged water have all gained in value importance.” Strong sales growth has been supported by increased marketing, with Jan – July 2001 adspend up 160% (rate-card based) for the top 30 tea products compared with the same period last year. This is in comparison to a mere 7% rise for the total beverages category. A major tea manufacturer, Ting Hsin, led the big spenders with over RMB91 million (US$11 million) advertising in the first seven months, a 150% increase over last year. Asia Pacific Claims 39 Spots in Top 100 Global Internet Properties The importance of Asia Pacific to world Internet usage and growth has been confirmed by the latest survey of the world’s most popular online destinations. Asia Pacific has 39 of the world’s 100 most visited Internet properties, with Korea’s Daum a stand-out performer with the second-highest number of visitors worldwide. Asia Pacific’s regional total is second only to the US, which has 49 places, led by Internet giants Yahoo!, MSN, AOL Time Warner and Microsoft. The top-100 list is based on home usage analysis in June of more than 12,000 properties in 28 countries constantly monitored by Nielsen//NetRatings worldwide. 4 Regionally, Asia Pacific accounts for 39 top properties by unique audience, led by South Korea with 24, Japan with 14 and Taiwan with one. The Americas have 52 and Europe has nine. (See Table 1, facing page.) Yahoo! is the biggest mega-brand with a total audience of close to 100 million in seven countries, followed by MSN with 75.1 million in five countries, AOL Time Warner with 73.7 million in three countries, Microsoft with 44.5 million in four countries and Lycos Network with 42.7 million in four countries. “The global list is dominated by USheadquartered properties including AOL Time Warner, Lycos Network, Microsoft, MSN and Yahoo!, but Asia Pacific is well represented by Korea and Japan among the markets where these global players are active,” said Hugh Bloch, managing director, ACNielsen eRatings.com, North Asia. (See Table 2.) “South Korea has consistently come up in our Internet research as the active and growing market. Korean Internet users lead the world in the number of Internet sessions per month, average time spent online and the number of pages viewed.” Of the 15 properties that broke the one billion pages benchmark for viewing, six were from Korea and one each from Japan and Taiwan. Daum, with 5.8 billion pages, was second only to Yahoo! US (7.5 billion pages) but ahead of MSN US (5.5 billion pages). (See Table 3.) NZ Moves to Improve Business New Zealand organisations are embracing business improvement programs to counter long-established complacency and prepare for the challenges of today’s turbulent economic climate. by New Zealand amid a loss of international competitiveness. “The research found that not only is there a huge increase in the number of New Zealand organisations undertaking improvements, but they are occurring across all sectors and sizes of organisation,” said James Armstrong, executive director, Customised Research, ACNielsen New Zealand. New research by ACNielsen New Zealand shows 86% of senior managers have launched business improvement programs in the past year, compared to 69% of their colleagues in the UK. The research was commissioned by the New Zealand Business Excellence Foundation to explore the current environment and identify issues facing senior managers. “I’m very excited about the ACNielsen research findings,” said Sue Wright, chief executive, New Zealand Business Excellence Foundation, a not-for-profit organisation focused on encouraging and supporting organisations to attain business excellence. “The complacency seen in New Zealand organisations as recently as five years ago is certainly no longer there.” Previously, the size of an organisation has typically been a key factor driving business improvement initiatives, with the skew towards large organisations; (over 250 employees) implementing improvement programs. However, in the past year an equivalent number of SMEs (up to 50 employees) have initiated such programs. “Being good is no longer good enough – our organisations have to be better than similar organisations around the world. In that way, we will lift the competitiveness of our nation,” Wright said. “The challenge now will be in maximising the returns from initiating these programs.” Competitive Auckland Internal analysis has been widespread recently, including government and business forums such as ‘Competitive Auckland’ and conferences such as ‘Catching the Knowledge Wave’. The issue has been fuelled by media coverage of the challenges faced Over the past three years, and particularly over the past 12 months, organisations have rushed to undertake business improvement initiatives. More than two-thirds (68%) of organisations surveyed have introduced a Table 2. Global Properties by Unique Audience, Home Usage, June 2001 Table 1. Country Composition – Global Top 100 Properties by Unique Audience, Home Usage, June 2001 Asia Pacific South Korea Japan Taiwan Americas US Canada Brazil Europe Germany UK Italy 39 24 14 1 52 49 2 1 9 5 3 1 Source: Nielsen//NetRatings business improvement program in the past three years, of which half began in the past year. Property Yahoo! US Japan Korea UK Taiwan Germany Canada MSN US Japan Korea UK Canada AOL Time Warner US Germany UK Microsoft US Korea Japan Germany Lycos Network US Korea Germany Japan Unique Audience 99,841,000 54,493,000 13,424,000 13,136,051 5,140,363 4,692,187 4,591,143 4,364,185 75,120,000 48,371,000 7,783,000 7,522,907 5,935,600 5,507,966 73,662,000 63,532,000 5,617,615 4,512,669 44,487,000 25,746,000 7,778,345 6,762,000 4,200,352 42,679,000 21,971,000 10,041,587 5,737,942 4,928,000 Source: Nielsen//NetRatings “The messages are hitting home, with New Zealand undergoing a significant change program,” Wright said. “We’re seeing evidence of the three key phases of change management right before our very eyes: firstly, awareness of the need to change, followed by people engaging in the need to change, and finally organisations taking action. That’s exactly what appears to be happening.” Table 3. Global Top 20 Properties by Page Views, Home Usage, June 2001 Rank by Page Country Views 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 USA Korea USA Japan USA Korea USA Korea Korea Korea USA USA Korea Germany Taiwan USA USA Korea Canada Korea Property Yahoo! Daum Comm Corp MSN Yahoo! AOL Time Warner NeoWiz eBay Lycos Network Yahoo! NAVER.COM NeoPets Lycos Network Damoim eBay Yahoo! Excite@Home iWon Korea Telecom MSN Freechal Page Views 7,453,000,000 5,850,000,000 5,533,000,000 3,728,000,000 3,658,000,000 3,349,000,000 3,244,000,000 1,568,000,000 1,500,000,000 1,348,000,000 1,298,000,000 1,165,000,000 1,150,000,000 1,048,000,000 1,030,000,000 939,000,000 935,000,000 841,000,000 771,000,000 764,000,000 Source: Nielsen//NetRatings 5 Double-Digit Growth for Broadband in Australia “This secure market is growing by 18% each quarter, compared to 4.4% growth in the total Internet population both at-home and at-work. The 80:20 rule applies here – the secure market makes up 25% of the total Internet population; however, users in this space represent the ‘high-value’ customers on the Web. These surfers have overcome the barriers to transacting online and the majority represent the upwardly mobile AB demographic. The Internet “secure market” has been identified as the key for the future take-up of broadband services. A major new report from Australia pinpoints Internet users who bank or shop with their credit cards online – those who are used to secure environments – as the drivers of future growth. By pushing the right buttons with this target audience, broadband operators can look forward to considerable growth, said senior analyst Andrew Reid from Nielsen//NetRatings, which has just launched a new broadband and streaming media measurement service, Internet Media Strategies (IMS). The inaugural Nielsen//NetRatings IMS report shows the Australian home broadband market grew 22% in the six months to August this year – a faster growth rate than the active home-based Internet population, which grew 18% over the same period. “The key for assessing demand and growth potential for broadband is for business to “In terms of broadband uptake, the ‘secure market’ offers the most potential to providers of high-speed network access and content providers. In the US, for example, more than half of the ‘secure market’ of online buyers now have connection speeds over 56K.” focus on the ‘secure market’ on the Internet rather than the total Internet population, or the ‘open’ market,” Reid said. “This is a new way of viewing the online marketplace – the ‘secure market’ in Australia currently consists of the three million people who are used to making secure transactions on the Internet. Nielsen//NetRatings IMS is the first commercially available service in Australia that measures the line speeds of Web surfers and provides demographic profiles on an ongoing basis, reporting these results every month. Tickets, Advertising Show Online Strength Online retail activity and advertising continue to remain strong in Australia, in defiance of international trends. purchasing ratios of 3.5 times, followed by videos/DVDs at 2.1 times, office supplies, wine, music and travel. Ticketing has become the number-one category for online consumer retail transactions, outstripping perennial market leaders, books and music. “High customer-satisfaction levels are delivering increased levels of repeat purchasing with repeat purchases exceeding one-off purchasing in over half the product categories surveyed. Only 4% of regular Internet users say they are dissatisfied with their online shopping experience,” Lee said. The ACNielsen.consult 2001 Online Consumer Retail Study shows that over 50% of online shoppers have purchased an online ticket (travel or entertainment) over the past 12 months. Books are second with 36% and music third with 29%. “The Sydney Olympics and online airline ticketing initiatives from Impulse, Virgin Blue and Qantas have established online ticketing as the category leading growth in online shopping transactions,” said Christine Lee, retail analyst, ACNielsen.consult. Growth in all leading categories is being driven by repeat purchases, with food and groceries attracting the highest repeat 6 Activity across most retail categories also continues to increase with many of the traditional retail categories such as clothing, health-care and cosmetics beginning to develop useful levels of activity. In more good news for Web-focused operators, online display advertising spend for the second quarter 2001 reached A$16.3 million (US$8.3 million), a 3.1% increase on the first quarter 2001. “This quarter we recorded three months of increased spending for the first time this year,” said Ian Webster, media analyst, ACNielsen.consult. “Established online advertisers are maintaining their spend on online display advertising with encouraging levels of activity from the automobile, consumer finance, FMCG and government categories, paving the way for an increase in spend levels in the second half of the year.” ACNielsen.consult’s AdMonitor service also recorded a significant increase in the use of new online display formats as advertisers learn how to take advantage of the additional page space publishers are providing. Coke, Marlboro, Top Global Brands Coca-Cola and Marlboro have emerged as the big winners in a survey of the world’s biggest brands in consumer packaged goods. Only 43 consumer product brands ring up annual sales of more than US$1 billion each and can be considered truly global, according to the study released by ACNielsen. To qualify, brands must have a presence in all four regions of the world: North America, Europe, Africa/Middle East and Asia Pacific. The elite list is dominated by beverages, tobacco and snack foods. There are no Asia Pacific brands in the report titled “Reaching the Billion Dollar Mark – A Review of Today’s Global Brands” by ACNielsen Global Services. “Despite a proliferation of brands in the marketplace and a focus by major manufacturers on being more global, there are relatively few global mega-brands out there today,” said Jane Perrin, managing director, ACNielsen Global Services. “We looked at well over 200 brands in this study and although more than half had a global presence, they just didn’t have over US$1 billion in sales. Over the next few years, we expect this picture will change dramatically.” All 43 front-runners are present in Asia Pacific and two brands – Coca-Cola and Marlboro – made the billion-dollar mark on the strength of their Asia Pacific sales alone. Both Coca-Cola and Marlboro achieved over US$1.5 billion sales in Asia Pacific in the 12 months to March 2001. Although a number of Asia Pacific brands have sales upwards of US$1 billion, none sell more than the threshold of 5% outside of the region to be part of the global list. The study’s findings are based on ACNielsen data from 30 countries in North America, Europe-Middle East-Africa, Asia Pacific and Latin America. Together, the countries account for 90% of the world’s Gross Domestic Product. In Asia Pacific, the study covers the major markets of Australia, China, Hong Kong, Japan and South Korea. Growth Prospects Remain Strong Although Asia Pacific is behind North America and Europe in terms of share of global sales, many brands have recognised and are already capitalising on the region’s growth potential. “Fourteen brands in the region experienced 10% growth or more in the 12 months to March 2001, comparing very favourably with the global picture, where only eight brands achieved similar growth rates,” said Frank Martell, president, ACNielsen Asia Pacific. Benson & Hedges, Coca-Cola, Fanta, Kelloggs, Marlboro, Nescafe and Pepsi were the top brands in Asia Pacific, with sales over US$250 million each. All brands except Nescafe derived less than 30% of their global sales from the region. 7 Reaching the Billion-Dollar Mark More than 200 brands were considered for inclusion in “Reaching the Billion Dollar Mark – A Review of Today’s Global Brands” by ACNielsen Global Services. To be part of the list, a brand needed to have not only a geographical presence across all regions – North America, Europe, Africa/Middle East and Asia Pacific – but to have at least 5% of its sales outside of its home region. Total sales had to be more than US$ 1 billion. The 43 brands on the list represent 23 global manufacturers and a total of US$125 billion in sales. Leading Categories The category with the most billion-dollar brands was beverages, with 13 brands making the final list. (See Table 1) The total Coca-Cola brand was number one among beverages at well over US$15 billion in sales, with its two sub-brands, Coca-Cola and Diet Coke, being billion-dollar brands in their own right. Pepsi Cola and its associated sub-brands, Pepsi and Diet Pepsi (including Pepsi Light, Pepsi Max and Pepsi One), ranked as the number two beverage. There were three snack foods that registered over a billion dollars in global sales (Doritos, Lay’s and Pringles) and four tobacco brands that had a significant global presence and met the billion-dollar criteria (Benson & Hedges, Camel, L&M and Marlboro). Soup, cereal, yoghurt, cheese, chewing gum and chocolate all had one brand each on the list. Pet foods were represented by a dog-food brand (Pedigree), a cat-food brand (Whiskas) and a brand that caters to both cats and dogs (Friskies). What’s in a Brand The way brands are defined differs across countries and companies. To ensure consistency across this project, ACNielsen defined a brand based on the packaging, marketing and consumer views of brands. When brands were seen to have a number of variants or sub-brands, these were noted. Each of the brands selected has been measured within a category. Umbrella brands that cross category boundaries have not been aggregated across categories. For example, Nivea is a billion-dollar brand within moisturisers and cleansers, although it has a smaller presence within hair care and deodorants. Since this is a ‘brand’ study, there is no inclusion of products that may be similar in formulation but carry different names in different countries. Lay’s, for example, is a global brand but Pepsico markets a similar product in a number of countries under the Walkers name. The two have not been added together. Our Methodology There were three main criteria that a brand had to meet to be included in the study: •Cumulative sales for the 12 months ending with the first quarter of 2001 had to be equal to or exceed US$1 billion. •The brand had to have a measurable presence in each of the four major geographic regions – Latin America, Asia Pacific, North America and Europe, Middle East and Africa. •Sales outside of the home market had to represent at least 5% of the global sales value. World’s Most Accurate Brand Study With coverage in over 100 countries, ACNielsen Global Services is unique in its ability to provide a true global perspective on today’s consumers. The information contained in “Reaching the Billion Dollar Mark – A Review of Today’s Global Brands” offers unique insights into the global spread and diversification of today’s major consumer packaged goods. While other branding studies are just a tally of shipment sales from a company’s annual report, this ACNielsen report measures actual retail sales in 30 countries. 8 In terms of sales growth, the annual average rate across the 43 brands was less than 10%, but eight of the 43 brands experienced double-digit growth in the most recent year. Growth across categories showed little consistency. Manufacturer Predominance Eight of the 23 companies had more than one brand on the list, with Pepsico topping the list with six. The Philip Morris Companies (including Kraft Foods) and Procter & Gamble each had five brands. The Coca-Cola Company came in at four, with Kimberly-Clark Corporation, The Gillette Company, Mars and Nestlé with two brands each. Nearly three-quarters of these sales were attributable to the eight manufacturers with multiple brands on the list. Regional Highlights In general, regional sales of the 43 brands closely follow the global findings. For example, in each of the four regions, Coca-Cola and Marlboro were consistently the top two brands of the 43 studied. All of the brands had their largest markets in either North America or Europe, Middle East & Africa, which aligns with regional GDP strength. North America was the dominant region for 24 brands and Europe was dominant for 16 brands. For three brands (Gillette, Pedigree, Always), both North America and Europe shared equal importance. Table 1. Billion Dollar Global Brands Brand (# of countries included, 30 maximum) Segment Total Coca-Cola (30) Carbonated Coca-Cola (Regular)* Beverages Diet Coke/ Coca-Cola Light* Global Sales for 12 months ending Q1 2001 (US $) Asia Pacific Sales for 12 months ending Q1 2001 (US$) Over $15 Billion Over 1.5 billion Marlboro (25) Marlboro (Regular)* Marlboro Lights* Tobacco Total Pepsi (30) Pepsi (Regular)* Diet Pepsi/ Pepsi Light* Carbonated Beverages $5 Billion – $15 Billion $250-500 million Budweiser (25) Campbell’s (21) Kellogg’s (27) Pampers (27) Beer Soup Cereal Diapers $3 Billion – $5 Billion Under $250 million Under $250 million $250-500 million Under $250 million Benson & Hedges (21) Camel (24) Danone (25) Fanta (29) Friskies (24) Gillette (29) Huggies (25) Nescafe (29) Sprite (30) Tide (11) Tropicana (17) Wrigley’s (27) Tobacco Tobacco Yoghurt Carbonated Beverages Pet Food Blades & Razors Nappies Coffee Carbonated Beverages Laundry Detergent Still Beverages Chewing Gum $2 Billion – $3 Billion $250-500 million Under $250 million Under $250 million $250-500 million Under $250 million Under $250 million Under $250 million $0.5 - 1.5 billion Under $250 million Under $250 million Under $250 million Under $250 million Colgate (29) Duracell (28) Heineken (26) Kodak (13) L&M (18) Lay’s (22) Pedigree (25) Toothpaste Batteries Beer Consumer Films Tobacco Chips & Snacks Pet Food $1.5 Billion – $2 Billion Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Always (22) Doritos (20) Energizer (28) Gatorade (22) Guinness (23) Kinder (28) Kleenex (26) L’Oreal (27) Maxwell House (19) Minute Maid (16) Nivea (29) Pantene (30) Philadelphia (25) Pringles (30) Seven-Up/7-Up (30) Tylenol (9) Whiskas (24) Sanitary Protection $1 Billion – Chips & Snacks $1.5 Billion Batteries Sports Beverages Beer Chocolate Facial Tissue Colorants Coffee Still Beverages Moisturisers/Cleansers Shampoo/Conditioners Cheese Chips & Snacks Carbonated Beverages OTC Pain Remedies Cat Food Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Under $250 million Note: Brands are alphabetised within each global sales dollar segment * Denote sub-brands which independently meet the global billion-dollar mark but are included in the total for the brand Source: ACNielsen Download the Report The complete text of “Reaching the Billion Dollar Mark – A Review of Today’s Global Brands” can be found at http://acnielsen.com/billion 9 New Media Coverage for India Private Label Consumption on the Rise in Hong Kong India’s fragmented media industry is entering a new era of professionalism thanks to a joint venture involving ACNielsen. Reliable information about TV viewing figures and advertising expenditure will be two major outcomes from ACNielsen’s partnership with Kantar Media Research (KMR) and Indian Market Research Bureau (IMRB), part of Kantar, WPP’s worldwide information and consultancy business. The deal combines local TV ratings data from TAM Media, a 50-50 joint venture between ACNielsen and KMR/IMRB, with data from ORG-MARG, a VNU company, in a single service covering 84 cities across India. 10 Hong Kong has finally caught up with the rest of the world in stocking up on private-label products. While average household spend on private labels is still fairly low compared to developed western markets such as Australia and the UK, a clear growth trend has emerged. The combined TV ratings service will be one of the world’s largest applications of advanced peoplemeter technology. Stakeholder beneficiaries – broadcasters, agencies and advertisers – will have coverage from nearly twice as many TV homes, in percentage terms, as either of the two earlier services. Latest ACNielsen Homescan data reveals that more than 90% of all Hong Kong households have purchased private-label products in the past eight months. There are even plans to expand the coverage to all major states in India – 15 states versus the current coverage of nine – and virtually all major metropolitan areas under a plan to be presented to the industry. “The growth and popularity of private labels in other markets is largely attributed to significant investment by retailers into this area,” said Fanny Chan, Homescan retail services director at ACNielsen Hong Kong. The joint venture will also be the leading provider of advertising expenditure information in India, covering more than 90% of the country’s TV and press advertising spending. “Some retailers in the UK and Australia have supported this area so much that their own private labels have successfully grown into recognised and preferred brands, such as Waitrose and Marks and Spencer.” India is one of 24 major television markets monitored by ACNielsen Media International, the leader in international media measurement and analysis. Together with Nielsen Media Research, which measures television audiences in the United States, the two companies offer the most extensive coverage of the global TV economy. In Hong Kong, however, average household spend on private labels is less than 5% of the total household budget, unlike Australia and the UK, where the figures are between 10% and 30% respectively. Of these households, nearly 70% have purchased premium private-label products and 76% have purchased regular privatelabel products. Homescan reports that the top premium and regular private labels are: • Premium: Liquid milk, biscuits, instant noodles, packaged rice, cooking oil • Regular: Toilet paper, liquid soap, dishwashing liquid, biscuits. “It is definitely true that Hong Kongers are prepared to pay more for what feeds their families and are prepared to spend more money on food than other items on their shopping list,” Chan said. “Our overseas research also shows that private-label sales fluctuate according to the economic climate – sales are generally higher during an economic slowdown when families are more budget conscious. “The gradual increase in private-label consumption in Hong Kong may be related to the current economic situation and we may expect higher sales of private labels if the outlook worsens.” Research into private-label shopping is made available through ACNielsen Homescan, an electronic consumer panel which captures grocery and household purchases directly from 1,000 homes throughout Hong Kong. Monthly data through Homescan, Asia’s first electronic consumer panel, allows manufacturers and retailers to know what Hong Kongers are putting into their shopping baskets as well as tracking shopping trends and consumption patterns over time. Indonesian Consumer Confidence Bounces Back The increase has two likely explanations. The first is inflation, which means people have to spend more just to get by, and the second is increased spending power – as the economy steadily improves, people are able to increase their standard of living. Indonesians are celebrating their return to prosperity by spending more on daily necessities and consumer durables. In a sign that consumer confidence is back, retail sales of most FMCG products are increasing. Tracking of monthly household expenditure by ACNielsen shows 20% of households are now spending over 1 million Rupiah (US$92) on day-to-day necessities, compared to 15% one year earlier. Similarly, 40% of households are spending more than Rp 700,000 (US$65) on necessities compared to 32% last year. Chart 1. Indonesian Monthly Household Expenditure (on day-to-day necessities) The upbeat trend is confirmed by living standards data from ACNielsen Indonesia’s 2001 Media Index, which shows rising levels of durables ownership. Around 72% of homes in the nine major cities – Jakarta City, Greater Jakarta, Bandung, Surabaya City, Greater Surabaya, Semarang, Medan, Denpasar and Makassar – now have a colour TV (up from 69%), and VCD players have leapt from 24% to 35%. “There is no doubt that the living conditions of urban Indonesians are gradually improving despite the economic crisis of four years ago,” said Farquhar Stirling, managing director, ACNielsen Indonesia. “VCD players are an interesting case. The wide availability of cheap, often pirated, VCD films makes this a very inexpensive entertainment medium here. A film can be rented for US$0.50, and bought for as little as US$2. Chart 2. Indonesian Ownership of Durables Source: ACNielsen Media International I think this has impacted the cinema industry as people prefer to stay at home and watch a VCD rather than go to the cinema.” Only 14% of people aged 10 and over have gone to the cinema in the previous year, compared to 17% in 2000. The big winner in the media stakes has been television, the dominant force with 82% of the population regularly tuning in. Radio, meanwhile, has been a casualty, with listeners dropping from 40% to 38%. Newspaper readership is stable at 28% while magazine readership has dropped slightly from 19% to 18%. “Television continues to be the strongest medium among Indonesians as intense competition among stations brings more interesting programming,” Stirling said. “Magazines and tabloids would appear to have been impacted by price increases as people are more likely to spend their money on food and other essentials.” Chart 3. Media Consumption People aged 10+, in % 2000 2001 Television on an average day 81 82 Radio on an average day 40 38 Daily Newspaper on an average day 28 28 Any Tabloid 21 20 Any Magazine 19 18 Cinema in the past year 17 14 Source: ACNielsen Media International Source: ACNielsen Media International Bali Tops Radio Charts in Indonesia Political Goodwill Comes with New Megawati Government A diary survey of radio listening habits in Indonesia has found Bali residents to be king of the airwaves. Consumer confidence in Indonesia has soared to levels not seen since late 1999, with the change attributed to the popularity of new President Megawati Soekarnoputri. Denpasar has the highest penetration among the nine major metropolitan areas with 96% reach per week, followed by Semarang (91%), Makasar (90%) and Greater Surabaya (85%). Six in 10 Indonesians feel optimistic about the Indonesian economy, double the number just one month earlier. The positive outlook is evenly shared among urban and rural residents, according to the monthly Consumer Confidence Survey conducted by ACNielsen for Danareksa, a leading Indonesian investment bank. “There is no doubt that Megawati has brought a new sense of hope and optimism to the Indonesian public,” said Farquhar Stirling, managing director, ACNielsen Indonesia. “Her challenge now is to translate this support into real economic progress.” 11 Singapore New Media Players Perform Well in First Year The latest ACNielsen review of media trends in Singapore shows intensifying competition in broadcast and print. New players that launched into the media industry under government deregulation this year have done well in establishing bridgeheads. Channel U, the new Chinese channel under the SPH MediaWorks banner, has become the second-most watched TV channel in Singapore. New figures from ACNielsen Media International show Channel U with a 19% share of the terrestrial TV market just four months after launching in May, overtaking Channel 5 (12%) in the race to catch Channel 8 (43%), both owned by MediaCorps, previously the monopoly holder in TV. In print, two new free dailies, Today and Streats, reached 11% and 14% penetration respectively as increased competition saw the circulation of some rivals dip slightly. Readership of Today and Streats increased to 346,000 and 408,000 respectively, still well behind Straits Times, which remained the most popular English daily with 1,334,000 readers. Lianhe Zaobao led the Chinese newspaper market with an 11% increase in business readers. “All new players have done a fantastic job under the deregulated environment and the new TV channels and publications are well received by Singaporean consumers,” said Lennart Bengtsson, managing director, ACNielsen Singapore and Malaysia. “But we also see competition heating up and it will require a lot of research-based market knowledge to command the loyalty of an increasingly demanding audience.” If you would like further information on any of the products and services ACNielsen provides or additional market insights, visit www.acnielsen.com/asiapacific 12 “Although there are signs of the economy slowing, now is the time to invest in advertising and brand building because in difficult times, consumers look for brands they are familiar with and trust.” ACNielsen Media International AIS figures show overall advertising expenditure of US$750 million for the first half of the year, an increase of 5% from the same period last year. This figure is well down on last year’s 29% growth for the same period. Outdoor advertising, including bus and taxi-tops, had the highest growth of 40.2%. “Although there are signs of the economy slowing, now is the time to invest in advertising and brand building because in difficult times, consumers look for brands they are familiar with and trust,” Bengtsson said. On the airwaves, Mandarin radio stations continue to beat their English counterparts. The top three stations are YES 93.3FM, Capital 95.8FM and Love 97.2FM. YES 93.3FM has been the top radio station in Singapore since ACNielsen started its radio diary surveys in 1993. Among English stations, the top three performers are Class 95FM, Perfect 10 and Power 98FM. With the increasing popularity of the Internet, Web surfing has seen tremendous growth, with Internet penetration climbing to 47% from 40% last year. The home is the most popular place of access, with 34% of users sending and receiving emails from home, followed by 24% at the workplace. Solid Start for E-commerce in New Zealand, with Hopes High for Profit Surge New Zealand businesses have been quick to embrace e-commerce and are optimistic about future sales growth via the Internet. A recent report has found a significant level of e-trading among New Zealand businesses, with large growth tipped for the next 12 months. Any barriers that exist are not ones of opportunity, but are more to do with the costs of doing business and compliance. The report, “Electronic Commerce in New Zealand: A Survey of Electronic Traders” was prepared by ACNielsen for the Inland Revenue Department and the Ministry of Economic Development. It features the views of 800 general managers or CEOs, many of whom say the Internet is a small but profitable channel. While only one-third of businesses made a profit from the Internet in the past 12 months, more than half expect to make a profit in the year ahead. Internet sales are currently a small proportion of many e-traders’ annual sales volume. Half of the e-traders surveyed generate under NZ$10,000 (US$4,200) per annum, around a quarter generate between NZ$10,000 and NZ$100,000 (US$42,000) per annum, and a further one in six generate sales in excess of NZ$100,000 per annum. The report segments e-traders on the basis of involvement. Distinct categories are: • High-involvement traders (16%) – Relatively sophisticated Internet operators who are making Internet sales in excess of NZ$100,000 (US$42,000) a year. Their business and accounting systems are more likely to be integrated and they are more likely to have faced tax issues than other businesses. The main barrier they see ahead is an external one – the quality of Internet infrastructures. • Medium-involvement traders (26%) – These are businesses that place considerable importance on the Internet and anticipate significant increases in Internet sales in the next 12 months. Their customer base is generally consumer based. Internal barriers, especially implementation costs, are the key barriers to further development for this group. • Low-involvement traders (58%) – With a low level of Internet sales, typically less than NZ$10,000 (US$4,200) a year, these businesses don’t anticipate significant growth in Internet sales or online profit levels in the next 12 months. For these operators, a belief that their customers do not use e-commerce and a lack of Internet knowledge and skills are barriers for further development of their Internet presence. Nearly three out of four e-traders admitted to processing Internet orders manually, with order processing systems and accounting systems that are not integrated. In some instances, this means sales of up to NZ$100,000 per annum are processed manually. Internet sales are predominantly delivered physically. That is, customers receive their orders via the postal system or by courier. Only one in seven customers is shopping for an item that can be delivered electronically, such as software. Those who consider the Internet their main source of revenue generally offer customers additional services from their home site, including: • Links to other websites • Customer feedback forms • Ability to order goods via submit forms • Online payment by credit card • Secure transactions • Customised service via log-on access. 13 Hypermarkets, Discount Stores Win Big Large-format stores such as hypermarkets and discount stores have become dominant players in Korea’s grocery market, following a well established pattern in countries elsewhere. The mass retailers have a 44.3% share of sales volume despite a low 2.5% share of outlets, according to the latest Retail Census from ACNielsen. The figures indicate an exceptional growth of large-format stores since the last Retail Census in 1996, when they accounted for 2% share of outlets and only 25.3% share of sales volume. “The developments in Korea resemble what has been taking place on an international scale – there is an obvious trend towards increasing concentration of the grocery industry in hypermarkets and discount stores,” said Hugh Kwon, managing director, ACNielsen Korea. “More significantly, growth of large-format stores has taken place against the backdrop of a huge 46.9% growth in retail value and a 5.5% drop in number of outlets to 114,000 stores during the four-year period.” Small supermarkets have increased in share of outlets but decreased in share of sales, while traditional stores saw declining share both in number and in sales. The Retail Census, which covers all areas nationally except Jeju-do, found that large-format stores have overtaken traditional stores in sales volume, although traditional stores still maintain the lion’s share of outlets. Large-format stores are more dominant in Seoul, Incheon and Pusan, accounting for close to half of all grocery sales. “Judging from international trends, there is still much room for largeformat stores in Korea,” Kwon said. “Such stores in Australia attract up to 3,100 people per store, whereas those in Hong Kong attract up to 1,500 people and in Japan up to 800.” . Hypermarkets Gather Steam in Thailand In a market shift similar to the one in Korea (see above story), the continued emergence of hypermarkets in Thailand shows the modern trade is making serious inroads into consumer behaviour. Table 1. Among Asian countries, the Thai retail market is dominated by traditional outlets. Split of grocery universe by store type (%) While wet markets and traditional stores remain important channels, their proportion of the overall shopping dollar is shrinking, according to a new report, “Consumer Behaviour & Demand: How Product Markets Are Performing.” The report, compiled by ACNielsen, comes at a time of uncertain economic conditions and low growth forecasts which are particularly frustrating for brand and category managers, as well as store operators. On a positive note, however, the report identifies a number of key areas where decision makers will be able to have the greatest impact on market share and profitability due to changes in usage and attitudes: Vietnam Indon. Philipp. Thailand China Other Malaysia Korea Traditional CVS Taiwan Minimarkets Sing. HK NZ Japan Australia Super/Hypermarkets • Optimisation of assets • Breadth and depth of assortment • Pricing policies • Level and frequency of promotions and discounts. Table 2. But the picture is very different when looking at share based on turnover, where the modern trade is strong. Share of trade by store type – based on all categories The report also confirms the need for precise data to drive decision making. In a complex and fragmented market, such as Thailand, critical decisions on the Four P’s of the marketing mix – product, pricing, promotions and place – must be based on deep insights and critical analysis. Vietnam Indon. China Other Minimarkets 14 Malaysia Thailand Philipp. Traditional Grocery Super/Hypermarkets Korea Taiwan CVS Drugstores Sing. HK Publishers Opt for Next-Generation Research “We have sought to refresh and refocus the way readership surveys are conducted,” said Gene Swinstead, managing director, News Limited Community Newspapers. Australian newspaper publishers are about to get a whole lot closer to their readers. Consumer profiling is one of many value-added services to be supplied by ACNielsen Media International as it begins a two-year contract to measure readership for the Australian Suburban Newspapers Association. “Community newspapers deserve something better as we progress to increase significantly our share in the national advertising market.” The expanded service pleases three stakeholder groups: • Publishers will gain a better understanding of the lifestyle profiles of their readers • Advertisers will be able to target consumer segments clustered in well-defined regions • Advertising agencies will be in a better position to determine which titles are the most efficient in reaching their target markets. These comments were echoed by Ian Crowther, general manager, Fairfax Community Newspapers, who said: “The association has gone through an exhaustive tendering process that lasted over 12 months and involved submissions from four research organisations, including ACNielsen and the incumbent, Roy Morgan Research. Using methodology tried and proven in 11 other Asia Pacific countries, ACNielsen offered us a viable readership alternative, one that ASNA members believe will deliver greater awareness and credibility for suburban newspapers.” Community print advertising was worth about A$661 million (US$335 million) last year, about 10% of all major media expenditure in 2000. MarketPlace: On the Move Frank Martell, president of ACNielsen Asia Pacific, has been appointed to the ACNielsen Board. Frank, who will remain based in Hong Kong, succeeds KN Tang in the post, who has announced his retirement as Chairman of ACNielsen Asia Pacific. David McCallum has been appointed head of all Customised operations, based in Tokyo. To ensure a close alignment of all Customised capabilities, David will also assume responsibility for ACNielsen International Research, ACNielsen.online and ACNielsen.consult. Lennart Bengtsson has been promoted to the position of managing director, ACNielsen Japan, and will join the Asia Pacific Executive Committee. Lennart was previously managing director of ACNielsen’s Singapore and Malaysian offices. Laurent Zeller has been appointed managing director, Business Development and Sales, ACNielsen Asia Pacific. He has also been appointed to the company’s Asia Pacific Executive Committee (APEC), reporting to Frank Martell, president, ACNielsen Asia Pacific. Laurent was previously with Taylor Sofres Nelson where he held various senior management roles in Europe, Africa and Asia Pacific. A well-known market research professional in the region, Forrest Didier, has been appointed managing director of ACNielsen Media International Asia Pacific. This is the first time ACNielsen Media International has appointed a regional head for its widespread presence in 12 Asia Pacific markets, signifying the company’s commitment to further strengthen its leadership position. Alistair Watts has been promoted to the position of managing director, ACNielsen China, where he will oversee the Retail and Customised businesses as well as provide executive support for ACNielsen Media International activities. Agnes Khoo will continue to lead the highly successful Customised business. Prior to coming to China, Alistair had been managing director, ACNielsen Vietnam, and executive director, Customised Research Services, Singapore. Helen Overmyer has been named head of ACNielsen Media International in Australia, replacing Ian Garland, who has moved to New York to join the head office of ACNielsen Media International as managing director, product marketing and development. Lisa Rippon has been promoted to the position of Chief Communications Officer, Asia Pacific, a role she had been caretaking since the retirement of Phil Burfurd in March 2001. 15 A Time To Remember After 33 years in the business, I have decided to retire at the end of this year. This is the last time I will be talking to valued clients and colleagues via this column. This newsletter was first published in November 1971. As we celebrate its 20th anniversary, it has been timely for us to conduct our first ever, on-line readers’ survey. We are greatly encouraged by the positive feedback from both clients and internal readers, on the frequency, length, design and coverage of this publication. We will continue to enhance the depth and insights to make this publication even more relevant to the business of our clients. An electronic version of this newsletter will also be created to make this publication even more accessible. The past three decades have been most exciting as we experienced almost uninterrupted economic development in Asia, with the fast growth of television and other media including Internet, the availability of more and better products and the tremendous improvement in the quality of life. As an integrated part of the economic progress, market research emerged from an unknown business practice to a widely accepted discipline by many sectors of industry, government and public corporations throughout Asia Pacific. It has also transformed from a village industry to a respectable global business. All these would not have been possible without the support of our clients and the hard work of many research professionals. It is now time for me to say thank you and goodbye to so many outstanding, talented individuals with whom I have worked among our clients and the research industry. TV Leaders Select ACNielsen for Regional Ratings Leading broadcasters CNBC and Discovery Networks have turned to ACNielsen Media International for regional TV ratings coverage. CNBC has signed a three-year deal across eight markets and Discovery has signed a two-year contract across five markets. Business news channel CNBC, an annual subscriber to ACNielsen Media International’s ratings since 1998, will take ratings for Australia, Hong Kong, India, Korea, New Zealand, the Philippines, Singapore and Taiwan. “We have consistently supported the progressive development of pay-television-accessible peoplemeter panels across Asia Pacific as the most reliable tool to track the audience growth of CNBC and the PTV media,” said Mark Froude, vice president, International Sales, CNBC Asia. “Our agreement with ACNielsen is a clear symbol of our ongoing commitment to building better and more transparent viewing measurement standards across the region and will allow us to deliver an increased level of accountability to our international client base.” The Discovery contract, the broadcaster’s first regional deal with ACNielsen, covers Taiwan, Australia, Hong Kong, the Philippines and Taiwan. “Our decision to sign a regional contract will be cost effective for us as we recognise that ACNielsen is the only company that has the capacity and operations in these markets to meet our specific needs,” said Anthony Dobson, director, Research and Strategic Planning, Discovery Networks Asia. The two signings are the latest wins for ACNielsen Media International, which has more than 15,000 peoplemeter homes in Asia Pacific and recently expanded panels in Hong Kong, Korea, Singapore and Taiwan. “We are very happy CNBC and Discovery have recognised the value and insights of our peoplemeter data and the unique capability we have to deliver a regional service to them,” said Forrest Didier, managing director, ACNielsen Media International Asia Pacific. KN Tang Regional Chairman ACNielsen 16 “Their commitment means they will fully benefit from a closer relationship in terms of consistency in data source and reporting format, as well as enhanced servicing capabilities throughout the region.” Copyright © 2002 ACNielsen. All rights reserved. Produced by ACNielsen. Communications Department. ACNielsen Centre, 11 Talavera Rd, Macquarie Park, NSW 2113, Australia. Editor: Kylie Ross. Design by ACNielsen Global Creative Services. Writer: Zenon Pasieczny.