Macroeconomy - FMCG Update Q4 17 (JHHP) PDF

INDONESIA MACROECONOMY
& FMCG UPDATE Q4 2017

DATE : 27 Feb 2018
PRESENTED BY :
PREPARED FOR : JHHP
Copyright © 2018 The Nielsen Company. Confidential and proprietary.

INDONESIA MACROECONOMY INDICATOR BPS
The 2017 Indonesian economy is growing slightly faster than the previous year, but still below the
government target at 5.2%. More stable inflation at 3-4% range is also seen in the past 3 years.
GDP GROWTH (%) INFLATION MAT (%)
2012 - 2015 2016 2017
5.03 5.07 8.4 8.4

6.03
5.58
5.02 5.19 5.02 5.01 5.01 5.06 5.19
4.79 4.92 4.94
4.3 4.5 4.4

3.6 3.7 3.6
3.4 3.4
3.1 3.0
FY FY FY FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY FY FY FY MAR JUN SEP DEC MAR JUN SEP DEC
12 13 14 15 16 16 16 16 17 17 17 17
12 13 14 15 16 16 16 16 17 17 17 17
SOURCE: BPS.GO.ID 2
GDP GROWTH BY COMPONENT BPS
Household Consumption that holds the biggest portion of GDP (56%), has not shown any significant
change in the last 3 years, despite recent increase of Investment.
GDP CONTRIBUTION GDP SECTOR

BY SECTOR (%) GROWTH
5.5 5.4
5.1 5.1 5.0 5.0 5.0
5.0 4.9 4.9 5.0 4.9 5.0
EXPORT/GDP 21%
IMPORT/GDP 19%
HOUSEHOLD
CONSUMPTION 2011 2012 2013 2014 2015 | Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17
32 NET EXPORT 2%
56 5.5
6.9
5.4 6.3
4.5 3.5 3.8
2.0 2.9 2.7
GOVERNMENT -3.0
-4.1
SPENDING -1.9
2011 2012 2013 2014 2015 | Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17
9
8.9 9.1
HH Consumption Gov. Spending 5.3 5.6 5.4
7.1 7.3
4.1 5.1 5.1 4.2 4.8 4.8
Investment Net Export/Import
Others GROSS FIXED
CAPITAL 2011 2012 2013 2014 2015 | Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17
FORMATION
SOURCE: BPS.GO.ID 3
INDONESIA INFLATION DETAILS BPS
The annual inflation increase is mostly contributed from Transportation, Household expenditures
(electricity tariff increase), and Consumer Products (Foods/Beverages/Cigarette).
INFLATION MONTHLY
COMPOSITION INFLATION & CPI
2016 2017 Q4
COMMODITY 2017 112
Consumer Price Index*
4.0
Monthly Inflation (%) 110.3
FOOD RAW MATERIAL 5.7 1.3 2.2 110 3.5
PREPARED FOODS, BEVERAGES & CIGARETTE 5.4 4.1 0.8 108

3.0
106.5
2.5
HOUSEHOLD EXPENDITURE 1.9 5.1 0.5 106
2.0
CLOTHES 3.0 3.9 0.4 104
103.4
1.5
HEALTHY 3.9 3.0 0.7 102
1.0
100.0
EDUCATION, RECREATION & SPORT 2.7 3.3 0.3 100
0.5
TRANSPORTATION, COMMUNICATION, &SERVICES -0.7 4.2 0.7 98 0.0
INFLATION 3.0 3.6 0.9 96 -0.5
Sep-15
Sep-16
Sep-17
Jun-15
Jun-16
Jun-17
Dec-14
Mar-15
Dec-15
Mar-16
Dec-16
Mar-17
Dec-17
SOURCE: BPS.GO.ID 4
CONSUMER CONFIDENCE (BANK CENTRAL) BANK
INDONESIA
Consumer Confidence gap between current and future confidence is still generally wide. Recent CCI
had been stabilized since Jun’17 (which may be correlated to recent news about several retail
franchise stores closures) before bouncing up in the end year.
CCI CECI CEI
150
CONFIDENCE ABOUT FUTURE
138
140 CONDITION
130
138
123
126
120
DEC‘17
110 115
110 CONFIDENCE ABOUT
100 CURRENT CONDITION
JUN 17 - recent
90
ANNOUNCEMENT OF
SEVERAL RETAIL
115
END Q3’16-- Q4’16 STORES CLOSURES
TAX AMNESTY &
80 SEP 17 REGIONAL ELECTION
USD HIKES TO 14K CCI - CONSUMER CONFIDENCE INDEX
CECI - CONSUMER ECONOMIC CONDITION INDEX
70
CEI - CONSUMER EXPECTATION INDEX
DEC14 MAR15 JUN15 SEP15 DEC15 MAR16 JUN16 SEP16 DEC16 MAR17 JUN17 SEP17 DEC17
SOURCE: BANK INDONESIA 5

CONSUMER CONFIDENCE (NIELSEN ONLINE SURVEY)
Recessionary sentiment has become less stronger amongst Indonesia consumer. Yet, Economy is still the top major CCI
concern. On the other hand, work/life balance is climbing up and crime is also one of the concern that is increasing in
recent quarter.
TREND OF ECONOMIC TOP 5 MAJOR CONCERN

RECESSION AMONG CONSUMER
Q4 16 Q2 17 Q3 17
58 THE ECONOMY 26% 30% 30%

54
53 53
52
TOLERANCE TOWARDS DIFFERENT

51 25% 22% 18%
RELIGIONS
49
47 WORK/LIFE BALANCE 15% 14% 18%
47 48
42 46
POLITICAL STABILITY 25% 20% 15%
Q116 Q216 Q316 Q416 Q217 Q317

PARENT’S & WELLFARE
11% 15% 15%
HAPPINESS
Yes No
CRIME 11% 8% 12%
Q : Do you think your country is in an economic recession at the moment?
Source: Nielsen Consumer Confidence Survey 6

Q : What are the top 5 major concern among consumer ?
TOP UTILIZATION OF SPARE CASH
CCI
When consumers have spare cash, they increase the utilization for savings, holidays, investing and
out-of home entertainment.
Q4’16 Q2’17 Q3’17
PUTTING INTO SAVINGS 71% 66% 68%
HOLIDAYS / VACATIONS 41% 39% 45%
INVESTING IN SHARES OF STOCKS / MUTUAL FUNDS 31% 34% 45%
OUT-OF-HOME ENTERTAINMENT 30% 28% 31%

HOME IMPROVEMENTS / DECORATING 24% 27% 30%
NEW TECHNOLOGY PRODUCTS 20% 32% 29%
PAYING MEDICAL INSURANCE PREMIUMS - 27% 25%
NEW CLOTHES 24% 24% 22%
PAYING OFF DEBTS / LOANS / CREDIT CARDS 22% 22% 21%
RETIREMENT FUND 12% 12% 14%
Source: Nielsen Consumer Confidence Survey 7

CONSUMER INCIDENCE ON LIFESTYLE NEEDS IS STILL INCREASING
Lifestyle is still generally kept up within households spending. More Upper and Middle Consumers CMV
dine out and buy smartphone
DINING OUT DURABLE

SMARTPHONE
INCIDENCE ELECTRONIC
OWNERSHIP
(Coffee Shop & Fast Food) OWNERSHIP
(average incidence based on 9
electronic items)
77.8 83.7 81.1 43.6

40.0
40.4 43.4 30.1
36.4
Q4’15 Q4’16 Q4’17 Q4’15 Q4’16 Q4’17 Q4’15 Q4’16 Q4’17
BY SES (UPPER, MIDDLE, LOW)

67 72 78 97 98 98 61 70 72
30 30 32 79 83 80 22 30 34
12 17 15 45 50 45 9 19 23
Source: Consumer Media View 2017 – Nielsen Media

8
SAVINGS IN THE BANK ALSO KEEP INCREASING
LPS
Saving and investment fund (both from saving account and Time Deposit) has an increasing trend. It’s CMV
mostly contributed by Upper SES customers. This contribution looks more prominent in Time Deposit
where upper segment hold more than 80% of fund.
+10%
+8%
3,910,707
FUND FROM SAVING 3,278,580
3,556,440
ACCOUNT + TIME DEPOSIT
(IN BILLION RP)
2015 2016 2017

SAVING ACCOUNT TIME DEPOSIT
% CUSTOMER 33 35 34 % CUSTOMER
17+ 17+ 0.9 0.6 0.7
Q4 POSITION 2015 2016 2017 Q4 POSITION 2015 2016 2017

UPPER 1 29 36 32 UPPER 1 74 66 68
WHO HAVE TIME

58 59 54
% OF SEGMENT
% OF SEGMENT
SAVING ACC
UPPER 2 28 22 21 UPPER 2 9 24 20
WHO HAVE
DEPOSIT
MIDDLE 1 28 26 31 MIDDLE 1 8 4 10
MIDDLE 2 11 11 12 MIDDLE 2 8 6 2
LOWER 4 4 4 LOWER 1 0 0
SOURCE: LEMBAGA PENJAMIN SIMPANAN 20145– 2017 / WWW.LPS.GO.ID | CUSTOMER PENETRATION - CONSUMER MEDIA VIEW 9
CONSUMER BIG TICKET PURCHASE GAIKINDO
AISI
In FY 2017, car sales is growing positively with several new model introduced to the market.
However, motorcycle sales is still unable to grow.
CAR SALES MOTORCYCLE

(000 UNIT) SALES (000 UNIT)
321 275
1,958 1,787
278 276
249
1,712
291 1,557
295 1,872 1,863 1,546
239 252 270
1,717
1,411 1,640
314 2,226
300 243 265 250 1,969
1,610 1,458 1,299
282 329 283 267 283 1,971 1,990 1,647 1,504 1,402
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Q1 Q2 Q3 Q4
SOURCE: ASSOCIATION NUMBERS (GAIKINDO AND AISI) 10
HOUSEHOLD SPENDING STILL INCREASING CPS
Overall consumer spending is still positive. Increase spending is seen across consumer class.
AVERAGE SPEND/BUYER % GROWTH

PER MONTH (ALL INCLUDED) (SPEND/BUYER)
9,000
7,800 7,813 ROLLING ENDING Q4
8,000 7,305 7,493
7,071 7,070
UPPER 6,670 6,775 6,861
7,000 6,323 16 VS. 15 17 VS. 16
5,894 6,046
IN 000 IDR
6,000
UPPER (11%) 6% 10%
5,000
3,750 3,563 3,667
4,000 MIDDLE 3,339 3,313 3,334 MIDDLE (44%) 11% 11%
2,892 2,987 3,049 3,075
2,668 2,773
3,000 2,243 2,146 2,204
1,869 1,862 1,991 1,988 2,004
LOWER (45%) 7% 11%
1,661 1,740 1,796 1,860
2,000
LOWER 2015 2016 2017
1,000
0 INFLATION 3.4% 3.0% 3.6%

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17
SOURCE: NIELSEN CPS DATA – ADDITIONAL SPENDING +76 FMCG HOMEPANEL 11

HOUSEHOLD IS REPRIORITIZING THEIR SPENDING BUDGET CPS
Middle and lower class shows the same pattern, while upper still able to stretch their spending to a
few posts. FMCG is considered as 2nd priority across SES, especially on upper where it’s rank is still
on their bottom choices.
HH SPENDING
CONTRIBUTION % SIGNIFICANT + MODERATE + DECLINE -
UPPER SES MIDDLE SES LOWER SES

(7.8 Mio/Month) (3.7 Mio/Month) (2.2 Mio/Month)
SAVING + LOAN
21 17
22
INSURANCE
LEISURE & LIFESTYLE 16

19
FMCG 22
14
HEALTH 11
8 3
EDUCATION 3 3 6
7 4
9
COMMUNICATION 5 9
5
9 3
TRANSPORTATION 9 3
5
HOUSING RELATED 27
22
15
FOOD (Fresh & Staples)
FY 2017 FY 2017 FY 2017
SOURCE: NIELSEN CPS DATA – ADDITIONAL SPENDING +76 FMCG HOMEPANEL 12
UPPER SES ARE BECOMING MORE RATIONALE, WHILE LOWER SES IS FACING
AFFORDABILITY ISSUE CPS
• UPPER SES: Rationalize increased spending by utilizing promotion. Thus, there’s tendency of stocking up (larger
pack) whenever possible.
• MIDDLE SES: Similar pattern with the Upper, on utilizing promotion to dampen the impact of price increase.
Stocking up whenever possible by buying more units.
• LOWER SES: Try to catch up with rising price by reducing purchase, due limited cash outlay.
IDR SPEND KG/L UNIT SHOPPING SPEND PER HH

TRIP
FMCG
PURCHASE
TOTAL PANEL
3.9% 2.1% 0.9% -2.8% 2.6%
GROWTH
UPPER (11%) 4.6% 8.7% -0.5% -3.5% 3.0%
MIDDLE (44%) 4.9% 2.2% 1.6% -4.5% 3.5%
LOWER (45%) 2.3% -6.4% 0.4% -1.0% 1.1%
BETWEEN 4.0%
ABOVE 4.0% -4.0 AND BELOW
TO -4.0%
SOURCE: NIELSEN CPS DATA – FMCG ONLY 13
UPPER SES CONSUMER ARE BENEFITED THE MOST FROM PROMOTION CPS
Only upper class households that have been utilizing promotion to manage spending. Whilst lower
class households tend to re-adjust spending, due to limited cash outlay.
BUYERS BEHAVIOR TOWARDS PROMOTIONS IN MODERN TRADE
% VALUE % BUYERS % UNIT % OCCASIONS

ON PROMO ON PROMO ON PROMO ON PROMO
UPPER SES MIDDLE SES Upper SES Middle SES Upper SES Middle SES Upper SES Middle SES
LOWER SES Lower SES Lower SES Lower SES
37.0 37.4
36.6
21.1 21.2 85.6 86.0 34.5
84.6 34.1
19.8 19.8 15.1 15.1 32.0
20.2
17.9 71.9 70.5 14.1 14.2 28.1
69.3 13.8
26.6 26.1
15.2 15.4 12.6
14.7 60.5 58.9
54.6 10.4 10.3
9.3
FY 2015 FY 2016 FY 2017 FY 2015 FY 2016 FY 2017 FY 2015 FY 2016 FY 2017 FY 2015 FY 2016 FY 2017
SOURCE: NIELSEN CPS DATA – FMCG ONLY 14

FMCG TREND
The Shifting of FMCG Growth

YEAR 2017 RECORDS THE SLOWEST GROWTH FOR TOTAL FMCG RMS
VALUE, VOLUME GROWTH & PRICE INCREASE | TOP 58 FMCG CATEGORIES
GDP GROWTH 5.6 5.0 4.7 5.0 5.1*
INFLATION 8.4 8.4 3.4 3.0 3.6

12
19 10
5 11 12 6 5
FMCG 8
13 2 2 3
(1)
(2)
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
OLD UNIVERSE (DATA) NEW UNIVERSE (DATA)

FMCG Value Growth FMCG Vol Growth (/unit) FMCG Price Increase (/unit)
SOURCE: (1) BPS OFFICIAL GOVERNMENT SITE, & NIELSEN RETAIL DATA 16
FMCG & CIGARETTE GROWTH IS SLOWING DOWN RMS
Both are showing negative movement in volume.
CIGARETTE FMCG
73.7 33.9
72.6 72.1 33.3 33.0
69.2 32.4
74.0 83.5 85.3

72.6 80.1
67.3 72.1
60.0
GR VS YA DEC17 P3M P6M P12M GR VS YA DEC17 P3M P6M P12M

VOL -4.2 -4.0 -2.9 -1.9 VOL -0.7% -1.1% -2.3% -2.3%
VAL 1.5 1.9 3.6 5.5 VAL 2.7% 2.2% 1.4% 2.5%
Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417
Volume (Bill Stc) Value (Trillion Rp) Volume (Bill Bags) Value (Trillion Rp)
SOURCE: NIELSEN RMS DATA 17
FMCG GROUP CATEGORIES GROWTH RMS
Food performed better as Cooking Aid and Snack & confectioneries continue to grow in volume.
Dairy is also able to grow.
RETAIL SALES
PRICE
VALUE PRICE /KG VALUE
/KG
FMCG 3% 4% FMCG 3% 4%
COOKING AID (10%) 8% 6%
FOOD(35%) 4% 4% INSTANT FOOD (11%) -2% 4%

SNACK + CONFECTIONERIES (13%) 7% 1%
DAIRY (13%) 3% -3%
BEVERAGES(35%) 2% 4% COFFEE + TEA (8%) 3% 5%
RTD (13%) 0% 3%
BEAUTY (8%) 1% 3%
PERSONAL CARE (18%) 2% 4%
BASIC PC (10%) 4% 5%
HOMECARE (8%) 1% 2% HOMECARE (8%) 1% 2%
PHARMA (3%) -0% 4% PHARMA (3%) -0% 4%
20
BASIC NECESSITIES BECOME THE 1ST PRIORITY
CPS
Household across SEC are reducing number of categories which they could purchase.
2016 2017
AVG CAT 42 40 38 37 34 33
TOTAL UPPER MIDDLE LOWER
5 2 3 6
RANKED 43
BASED ON 57
%BUYERS
62
72
FROM HIGH
TO LOW
53
33 39
22
%BUYERS CHG. (+/-) 15 VS 16 16 VS 17 15 VS 16 16 VS 17 15 VS 16 16 VS 17 15 VS 16 16 VS 17
Up to 20 Category -0.6 0.3 -0.4 0.8 -0.9 -0.1 -0.3 0.4

21 to 40 Category -1.8 2.7 -2.2 3.1 -3.1 2.4 -0.1 2.9
41 to 60 Category 2.4 -2.9 2.6 -3.5 4.0 -2.4 0.3 -3.3
More than 60 Category 0.0 0.0 0.1 -0.4 0.0 0.1 0.1 -0.0
SOURCE: NIELSEN CPS DATA 25
TRADE CHANNEL & AREA DYNAMIC

CONSUMER IS VISITING LESS TYPE OF STORES SHOPPER
TREND
Average trade sectors used is very subtly declining. 1 - 3 sectors users continues its gradual growth
at the expense of 5+ sector users.
TRADE SECTORS 2014 2015 2016 2017
1 – 2 TRADE 38 35 40 42
3 TRADE 33 32 32 28
4 TRADE 17 22 18 22
proprietary.
and proprietary.
5 TRADE 9 9 8 7
Confidential and
Company. Confidential
6 TRADE 3 2 2 1
Nielsen Company.
≥ 7 TRADE 1 0.5 1 *
The Nielsen
AVERAGE 3.0 3.0 2.9 2.9

2018 The
BASE: ALL RESPONDENTS

© 2018
(2017 ,N=4487 | N=19,913,000)

(2016 ,N=4246 | N=19,373,000)
Copyright ©
(2015 ,N=3507 | N=17,161,000)

Copyright
(2014 ,N= 3641 | N= 16,015,000)
SOURCE: NIELSEN SHOPPER TREND 27

MINIMARKET AND TRADITIONAL CHANNEL IS BECOMING MORE IMPORTANT SHOPPER
TREND
Number of visits to traditional groceries continues to decline, while in contrary the visit to vegetable
vendors and minimarts are increasing.
2015 2016 2017
25 25
23
21 21 22
15 15
14
proprietary.
and proprietary.
9
8
Confidential and
6
3 2 2 2 3
2
Nielsen Company.
HYPERMARKET SUPERMARKET MINIMARKET TRADITIONAL WET MARKET VEGETABLE VENDOR

GROCERIES
The Nielsen
ACTUAL NO. OF INTV (n=604) (n=2102) (n=3865) (n=3474) (n=2158) (n=575)

ALL RESPONDENTS('000) (N=4041) (N=9391) (N=17600) (N=14348) (N=8070) (N=2180)
2018 The
© 2018
BASE – ALL RESPONDENTS

Copyright ©
REF: Q8R1, Q8R2, Q8R9, Q8R13, Q8R14, Q8R16

Copyright
SOURCE: NIELSEN SHOPPER TREND 28

SMALL FORMAT GROWS BETTER RMS
Positive growth is still happening in minimarket, yet it is below the expansion growth. Meanwhile,
Hyper/Super slower performance still continues while GT relatively stagnant.
TOTAL HSM MM GT HBM HBC

(%CONT) (13%) (30%) (55%) (1%) (2%)
DEC17 3 1 9 0 -3 4
VALUE (Mill Rp) L3M 2 -7 8 1 -2 4

GROWTH (%)
INDEX – DEC’14 L6M 1 -7 6 1 -2 4
L12M 3 -3 6 2 -1 5
STORE GROWTH 16 VS 15 0 11 1 1 3
proprietary.
180.0
and proprietary.
160.0
Confidential and
140.0
Nielsen Company.
120.0
The Nielsen
100.0
2018 The
80.0
© 2018
DEC14 MAR15 JUN15 SEP15 DEC15 MAR16 JUN16 SEP16 DEC16 MAR17 JUN17 SEP17 DEC17
Copyright ©
Copyright
MT Hyper/Super MT Minimarket General Trade H&B Medical H&B Cosmetic

SOURCE: NIELSEN RMS DATA 29
OPPORTUNITY SEEN FOR OUTER JAVA RMS
Outer Java region are showing better growth, while the decline is coming from Jakarta. Brand
competition in also lessen in Outer Java.
Value Area Contribution, Value Growth | 2017

INDONESIA FMCG
343 T
Rp 3,355/Unit
92 Brands /Store
SUMATRA
KALIMANTAN
16.3 3%
proprietary.
and proprietary.
5.1 14%
Rp 2,616/Unit SULAWESI Rp 2,767/Unit
94 Brands /Store
Confidential and
5.3 5% 82 Brands /Store

JAKARTA GR
Nielsen Company.
20.5 -2%
The Nielsen
OTHER JAVA
Rp 3,188 /Unit BANUSRA Rp 2,654/Unit
48.2 3%
2018 The
108 Brands /Store 97 Brands /Store

4.5 6%
© 2018
Rp 2,366/Unit
Copyright ©
Copyright
112 Brands /Store

30
OPPORTUNITY SEEN FOR OUTER JAVA CPS
Spend/buyer is also higher and growing faster in outer Java. Jakarta has the least FMCG contribution
compared to other areas. It has bigger cash outlay, yet it is growing slowest.
Avg. Spend/Buyer (IDR) per Month towards FMCG , Growth | FMCG vs Non- FMCG Spending | 2017
14 86
SUMATRA
KALIMANTAN URBAN
398 K 3%
proprietary.
and proprietary.
500 K 7%
SULAWESI URBAN
12 88
11 89
Confidential and
400 K -2%
JAKARTA GR
Nielsen Company.
497 K 1%
The Nielsen
OTHER JAVA
BANUSRA URBAN
8 92 341 K 2%
2018 The
12 88
462 K 3%
© 2018
Copyright ©
FMCG Spending 11 89
Copyright
Non-FMCG Spending
31
DIGITAL WORLD
MAKES E-COMMERCE BECOME
A NEW CHANNEL

SAME STORY: TV STILL HIGH, DIGITAL GROWING AS CMV
REPLACEMENT OF OTHER CONVENTIONAL MEDIA
MEDIA PENETRATION –
Q2 2014 VS Q2 2017
Q2 2014 Q2 2017
100 95 96
80
+36%
60
56 53
45 46
40 33 36
20 12 10 12
7 8
3
0
TV OOH INTERNET RADIO NEWSPAPER CINEMA TAB/MAG
(*)Watch TV yesterday, listen radio & see outdoor ads in the past 1 week, go to cinema and use internet past 1 year, read newspaper, magazine/tabloid
Source: Nielsen Consumer & Media View, All People Aged 10+, in 11 Cities, Q2 2014 VS 2017, in % 33
BRICK &
FROM 45% INTERNET PENETRATION CLICK
38%
ARE CONNECTED
TO INTERNET
THROUGH PERSONAL
COMPUTER
80%
ARE
CONNECTED
TO
38% OF INTERNET USERS
ARE ONLINE SHOPPERS
INTERNET
THROUGH
SMART
PHONES
34
ESTIMATION OF MARKET VALUE BY CATEGORY \ BRICK &
CLICK
(ANNUAL IN EARLY 2016)

Consumer Electronics & Travel products contributed more than 50% of total market value for Online Shopping.
TOTAL
IDR 74 T
CONSUMER FASHION &

ELECTRONICS TRAVEL SPORTSWEAR IT & MOBILE COSMETICS
35% 27% 16% 13% 4%
BOOKS &
STATIONARY PERSONAL CARE EVENT TICKETS GROCERY F&B GROCERY NON F&B
2% 2% 1% 1% 0.2%
SOURCE: NIELSEN BRICKS & CLICKS SURVEY 35
CONSUMER
INSIGHT
ONLINE SALES
ESTIMATION ON HARBOLNAS
11 – 13 DECEMBER 2017
4.7
TOTAL SALES PER DAY ON HARBOLNAS HAS
REACHED 4.2 TIMES OF THE REGULAR SALES
TRILLION
THE GROWTH IN OUTSIDE JAVA (+82%)
RUPIAH
IS FASTER THAN JAVA (+35%) (+1.4 T VS. 2016)
36
FASHION AND BILL PAYMENT/ TOP UP CATEGORIES HAVE CONSUMER
HIGH GROWTH THIS YEAR

INSIGHT
TOP CATEGORY PURCHASED (IN %)
FASHION & SPORTS CLOTHES

CATEGORY PURCHASED VS 2016
CLOTHES 48 -1
ACCESSORIES (HATS, WATCHES) 25 +14
FASHION & SPORTS CLOTHES 74 +6
BAGS AND PURSES 24 +3
FOOTWEAR (SHOES, SANDALS, ETC.) 19 +1
TRAVEL 29 -2
JEWELLERY AND WATCH 12 -1
COSMETICS 28 +1 COSMETICS
MAKE UP 21 +8
ELECTRONIC PRODUCTS 27 -8
PERFUME 10 +0
FACE CARE 9 +2
BILL PAYMENT / TOP UP 27 +6
MAKEUP BRUSHES 4 -2
TECHNOLOGY AND GADGETS 24 -20 ELECTRONIC PRODUCTS
WHITE GOODS 11 +5
BOOKS AND STATIONARY 13 +5 AUDIO (HEADPHONE, SPEAKER) 11 +0
12
CAMERAS AND CAMCORDERS 5 -3
PERSONAL CARE -
LED PRODUCTS (LAMPS) 5 -3
FOOD AND BEVERAGES 10 -4

TV AND HOME THEATER 4 -3
BILL PAYMENT / TOP UP

DAILY NEEDS 7 -14 PHONE CREDIT RELOAD 18 +4
3
INTERNET PACKAGE 8 -1
TICKET EVENT -2 ELECTRICITY VOUCHER 6 -2
Base : Online shopper between 11-13 Dec (vs. 2016)

37
HOMEPANEL ONLINE PURCHASE CPS
Although it is still small base, but more Household are now purchase FMCG by Online Shopping
VALUE PENETRATION
(RP ‘000) (%)
1.6
1.1
0.2
MAT 15 MAT 16 MAT 17

FY 15 FY 16 FY 17
VOLUME NUMBER OF
(UNITS) TRIP
2.0 1.7
1.3
FY 15 FY 16 FY 17
MAT 15 MAT 16 MAT 17

CPS
HOMEPANEL ONLINE PURCHASE OCCASIONS
Through Online, Household are getting more impulse/experimental to the category
% OCCASIONS MAT 2017- %

CONTRIBUTION OCCASIONS BY CATEGORY
ROUTINE IMPULSE/EXPERIMENTAL ROUTINE IMPULSE/EXPERIMENTAL
41 39
58 58 56 51
64
59 61
42 44 49
42
36
FY 15 FY 16 FY 17 Food Beverages Personal Care Homecare

CPS
HOMEPANEL ONLINE CATEGORY PURCHASED
It is getting more skewed to Personal Care and Middle Class
TOP FMCG CATEGORIES % BUYERS

(SORTED BY PENETRATION%) PROFILE
Lower Middle Upper

FY 2016 FY 2017
SKINCARE SKINCARE
22 28
FACE POWDER COSMETICS (DECORATIVE)
COLOGNE TOILET SOAP

58 50
TOILET SOAP BABY DIAPERS
INSTANT NOODLES COLOGNE
20 23
ALL ARE PERSONAL CARE CATEGORIES FY 16 FY 17

MOVES FOR 2018

HOW MANY MANUFACTURES GROW IN 2017 ?
As more categories are not growing this year, number of growing manufactures is also lessening yet in much RMS
slower rate, indicating that there is still an opportunity for manufactures to grow even in the declining category.
What are their strategy ?
# OF CATEGORY (PERCENTAGE) # OF MANUFACTURES (PERCENTAGE)
1
2017 2017
31 69 39 61
TOTAL 58 TOTAL 58
CATEGORIES 2016 CATEGORIES 2016
* Growing = Volume (KG/L)
growth bigger or equal to
59 41 43 57 +1%
Growing Not Growing Growing Not Growing

# OF MANUFACTURES (PERCENTAGE)
SEASONING LIQUID BABY DISHWASHING NON POWDER
BISCUIT RTD TEA SKINCARE
FLOUR MILK DIAPERS LIQUID DETERGENT
Category
vol growth
+7% +17% +12% -5% +7% -1% +8% -4%
50 45
59 59 60 63 57 55
74 68 66 74 70 65 68 69
Growing
Not Growing
50 55
41 41 40 37 43 45
26 32 34 26 30 35 32 31
2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 44
FOOD : AFFORDABLE, NEW VARIANT AND DISTRIBUTION TO OUTSIDE JAVA BECOME
THE GROWTH DRIVER OF FOOD CATEGORY RMS
2017 SUCCESS BRAND IN EACH CATEGORY
SEASONING
BISCUIT FLOUR
TOP GAINER BRAND RICHOCO, RICHEESE, ROMA TOP GAINER BRAND SAJIKU, SASA
KEY SUCCES DRIVER RICHOCO& RICHEESELAUNCH NEW PACK

(BIGGER PERCEIVED)& FLAVOUR. KEY SUCCES DRIVER NEW VARIANT (BAKWAN &
GROWTHDRIVER IS SUMATRA AND PISANG GORENG)
OTHER ISLAND WHERE THEY INCREASE
THEIR AVAILABILITY
GROWTH DRIVER IS OTHER ISLAND
ROMA HAS RECOVERED THEIR DISTRIBUTION AND KALIMANTAN THRU
AFTER PACK & PRICE CHANGES DISTRIBUTION EXPANSION
KEY SKU PRICE/PACK RICHEESE/RICHOCO52 GR  IDR 2,500

ROMA  IDR 1000, IDR 6000, IDR 8000
Innovation Distribution Affordability

45
BEVERAGES : MAGIC PRICE AND PROMOTION IS THE DRIVER FOR LIQUID
RMS
MILK AND RTD TEA PERFORMANCE
LIQUID MILK RTD TEA
TOP GAINER BRAND FF, ULTRA, INDOMILK TOP GAINER BRAND PUCUK HARUM & TEH RIO
KEY SUCCES DRIVER PRICE PROMO ON THE LARGE PACK (1L) KEY SUCCES DRIVER PUCUK HARUM OFFERING MAGIC
MAINTAINING SMALL PACK PRICE PRICE AND CONTINUE TO EXPAND
DISTRIBUTION
NEW FLAVOR INTRODUCTION :
COCONUT, BANANA, MELON RIO IS GROWING FASTEST IN
GROWING AREA (SUMATRA)
Innovation Distribution Affordability 46

PERSONAL CARE: HAVING AFFORDABLE PACKAGE IS KEY IN PERSONAL
RMS
CARE
BABY DIAPERS SKINCARE
TOP GAINER BRAND SWEETY TOP GAINER BRAND FAIR & LOVELY
KEY SUCCES LAUNCHED BRONZE PANTS LAST YEAR WHICH ARE KEY SUCCES FAIR & LOVELY PRICE IS LOWER THAN
DRIVER: MORE AFFORDABLE THAN THEIR EXISTING DRIVER MAJOR COMPETITORS IN CLEANSER
VARIANTS (SILVER)
MOREOVER THEY ALSO LAUNCHED SACHET
GROWTHIS SEEN ACROSSREGIONS BUT THEIR PACK TO PENETRATE GT
STRONGESTSOURCE OF GROWTHIS IN OTHER
ISLAND (KALIMANTAN)
KEY SKU PRICE/PACK BRONZE PANTS 1X24 (L ) 44,000 IDR KEY SKU PRICE/PACK SACHET 9 GR  3,500 IDR
(1 PCS 1,900) 1X100 ML  20,000 IDR
FIT PANTZ 1X1 (L)  2,700 IDR

HOME CARE: SIMILARLY TO OTHER CATEGORIES, TOP PERFORMER IN HOME CARE
GAIN ADVANTAGE THROUGH AFFORDABILITY AND SECONDLY, OUTER JAVA BECOME RMS
THEIR SOURCE OF GROWTH
DISHWASHING NON POWDER

LIQUID DETERGENT
TOP GAINER BRAND MAMA TOP GAINER BRAND SO KLIN

KEY SUCCES MORE AFFORDABLE PRICE AND KEY SUCCES HAVING SACHET 500 IDR WHILE COMPETITORS
DRIVER: COMPETITIVE PROMOTIONS DRIVER: ARE AT 1,000 IDR PRICE TIER IN SACHET
MAMA LEMON IS GROWING ACROSS ALSO SOKLIN IS SEEN TO BE PUSHING

REGION BUT THE BOOSTERIS SEEN IN EAST DISTRIBUTION IN SUMATERAAND KALIMANTAN
JAVA AND OTHERISLAND ESPECIALLY IN
KALIMANTAN
KEY SKU PPICE/PACK 800 ML  13,000 IDR KEY SKU PPICE/PACK 26 ML  500 IDR

CONSUMER EXCITEMENT
Reaching consumer thru an event to create excitement and experience
2
SEMESTER 1
JAN FEB MAR APR MAY JUN
14 FEB 14 JUN-15 JUL
16 FEB 27 JUN
15 MAY- 15 JUN
SEMESTER 2
JUL AUG SEP OCT NOV DEC
18 AUG – 2 SEP
49
CONSUMER EXCITEMENT
Number of Running Event and Travelling passenger are increasing across the years
2015 2016 2017 2015 2016 2017
42.4
292
41.1
204
143 36.6
RUNNING EVENT (#) LOCAL PASSENGGER (Mill #)
Source : dunialari.com Source : bps.go.id (based on top 5 biggest airport in Indonesia)
50
SUMMARY
THE MARKET TREND PURCHASE BEHAVIOR WHAT

(FY’17) TREND CAN BE DONE?
• The fundamental of economy is continue  Consumer are still trying to consolidate their total  Moves for 2018 :
to grow at stable rate. However there is spending. Upper class consumer are still
 Portfolio strategy that can reach out to
been a shifting in HH consumption holding back their spending, while Lower Class
different consumer group - offering value
consumer are trying to adjust their overall
added for upper and middle class,
and proprietary.
spending by reprioritizing their basic needs

affordability for lower class.
• Consumer confidence is picking up
 In general, consumers basically back to basic
slightly, on both future and current  Opportunity is seen in outer Java area
necessity:
expectations on economy
Create consumer excitement thru positive
Confidential

 Non-FMCG  Basic Staples & Fresh
activity - reaching consumer thru Event or
Foods, Education, Housing related
Thematic promotional strategy (i.e. CNY
and proprietary.
• FMCG industry is still showing a slowing

Company.
 FMCG  Cooking Aid, Snacking 2018, World Cup 2018, Asian Games 2018) to
down trend on FY’17 period and recorded
categories, and Dairy, while compromising generate quick win
the slowest growth.
Confidential
on others.
The Nielsen
 Lifestyle is also kept up within household

Nielsen Company.
spending. Increasing incidence on dine out and

The2017
smartphone purchase.
Copyright
Copyright ©2014©
51
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• This publication has been produced by Nielsen. It is distributed for informational purposes only. Nielsen makes no
express or implied warranties with respect to any information or data included in this publication, and expressly
disclaims all warranties, including but not limited to, any warranties of accuracy, non-infringement,
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• Other than information or data sourced from Nielsen, the information contained in this publication has been
obtained from sources that Nielsen believes to be reliable, but Nielsen does not represent or warrant that it is
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INDONESIA MACROECONOMY

& FMCG UPDATE Q4 2017

Copyright © 2018 The Nielsen Company. Confidential and proprietary.

GDP GROWTH (%) INFLATION MAT (%)

2012 - 2015 2016 2017

5.03 5.07 8.4 8.4

4.3 4.5 4.4

GDP CONTRIBUTION GDP SECTOR

PREPARED FOODS, BEVERAGES & CIGARETTE 5.4 4.1 0.8 108

TRANSPORTATION, COMMUNICATION, &SERVICES -0.7 4.2 0.7 98 0.0

INFLATION 3.0 3.6 0.9 96 -0.5

CCI CECI CEI

SOURCE: BANK INDONESIA 5

TREND OF ECONOMIC TOP 5 MAJOR CONCERN

58 THE ECONOMY 26% 30% 30%

TOLERANCE TOWARDS DIFFERENT

Q116 Q216 Q316 Q416 Q217 Q317

Source: Nielsen Consumer Confidence Survey 6

PUTTING INTO SAVINGS 71% 66% 68%

HOLIDAYS / VACATIONS 41% 39% 45%

INVESTING IN SHARES OF STOCKS / MUTUAL FUNDS 31% 34% 45%

OUT-OF-HOME ENTERTAINMENT 30% 28% 31%

HOME IMPROVEMENTS / DECORATING 24% 27% 30%

NEW TECHNOLOGY PRODUCTS 20% 32% 29%

PAYING MEDICAL INSURANCE PREMIUMS - 27% 25%

NEW CLOTHES 24% 24% 22%

PAYING OFF DEBTS / LOANS / CREDIT CARDS 22% 22% 21%

RETIREMENT FUND 12% 12% 14%

Source: Nielsen Consumer Confidence Survey 7

DINING OUT DURABLE

77.8 83.7 81.1 43.6

Q4’15 Q4’16 Q4’17 Q4’15 Q4’16 Q4’17 Q4’15 Q4’16 Q4’17

BY SES (UPPER, MIDDLE, LOW)

Source: Consumer Media View 2017 – Nielsen Media

2015 2016 2017

SAVING ACCOUNT TIME DEPOSIT

Q4 POSITION 2015 2016 2017 Q4 POSITION 2015 2016 2017

WHO HAVE TIME

CAR SALES MOTORCYCLE

AVERAGE SPEND/BUYER % GROWTH

0 INFLATION 3.4% 3.0% 3.6%

SOURCE: NIELSEN CPS DATA – ADDITIONAL SPENDING +76 FMCG HOMEPANEL 11

UPPER SES MIDDLE SES LOWER SES

LEISURE & LIFESTYLE 16

IDR SPEND KG/L UNIT SHOPPING SPEND PER HH

UPPER (11%) 4.6% 8.7% -0.5% -3.5% 3.0%

MIDDLE (44%) 4.9% 2.2% 1.6% -4.5% 3.5%

LOWER (45%) 2.3% -6.4% 0.4% -1.0% 1.1%

BUYERS BEHAVIOR TOWARDS PROMOTIONS IN MODERN TRADE

% VALUE % BUYERS % UNIT % OCCASIONS

LOWER SES Lower SES Lower SES Lower SES

SOURCE: NIELSEN CPS DATA – FMCG ONLY 14

Copyright © 2018 The Nielsen Company. Confidential and proprietary.

VALUE, VOLUME GROWTH & PRICE INCREASE | TOP 58 FMCG CATEGORIES

GDP GROWTH 5.6 5.0 4.7 5.0 5.1*

INFLATION 8.4 8.4 3.4 3.0 3.6

OLD UNIVERSE (DATA) NEW UNIVERSE (DATA)

74.0 83.5 85.3

GR VS YA DEC17 P3M P6M P12M GR VS YA DEC17 P3M P6M P12M

FOOD(35%) 4% 4% INSTANT FOOD (11%) -2% 4%

TOTAL UPPER MIDDLE LOWER

%BUYERS CHG. (+/-) 15 VS 16 16 VS 17 15 VS 16 16 VS 17 15 VS 16 16 VS 17 15 VS 16 16 VS 17

Up to 20 Category -0.6 0.3 -0.4 0.8 -0.9 -0.1 -0.3 0.4