how to win in 2019 trends and outloo… · .4 source: philippine statistic authority 2019f: 7-8%...
TRANSCRIPT
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
PATRICK CUA Managing Director
Nielsen Philippines
HOW TO WIN IN 2019 FOOT TO THE FLOOR OR HIT THE BRAKES?
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CONVENIENCE
LIFESTYLE
Manifestations of this
growing need
BOON & BANE
OF TRAIN
TRAIN Impact on
Filipinos
CONNECT &
ENGAGE
Media & Advertising
trends
2019
WHAT’S IN
STORE?
COUNTRY IN A
GLIMPSE
Macro-economic
overview
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
COUNTRY IN A GLIMPSE
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Source: Philippine Statistic Authority
2019F:
7-8%
Philippines % GDP
Growth
PH SLOWS DOWN TO 6.1% GDP GROWTH IN Q3 2018
6.9%
6.5%
6.1%
Asian Countries % GDP
Growth
Vietnam
China
Philippines
Consumption may have been dampened by high prices but is expected to slightly pick up during the holiday season.
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Source: Philippine Statistic Authority
Supply Demand
7
Agriculture,
Fishery, &
Forestry
33
Industry
59
Services
67
HH
Consumption
Expenditure
11
Gov’t.
Consumption
Expenditure
32
Capital
Formation
71
Exports
80
Imports
% CONT + + + + + - =
%GROWTH
SLOWDOWN SEEN ACROSS SECTORS (ESPECIALLY FOR
HH CONSUMPTION) WHILE THE GOVERNMENT FOCUSES
ON THE BUILD BUILD BUILD CAMPAIGN
*Miscellaneous
services now includes
exports of processing
services, FISIM,
Maintenance and
Repairs n.i.e, and
excludes Merchanting,
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PRICES & FX SOARED BUT WAS TEMPERED IN Q4
Sources: Bangko Sentral ng Pilipinas, Philippine Statistic Authority
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PRICES HAVE GONE UP ACROSS SUBSECTORS
ESPECIALLY FOR BASIC COMMODITIES
Source: Bangko Sentral ng Pilipinas
INFLATION
Q3 2018
+3.5
-3.8
+4.0
+2.1
+2.4
+21.7
INFLATION
Q3 2018
+8.5
+3.9
+5.2
+7.9
+0.4
FOOD, NON-ALCOHOLIC BEV
RESTAURANTS, MISC
HOUSING, WATER, UTILITIES
TRANSPORT
COMMUNICATIONS
FURNISHING, HH EQUIPMENT
EDUCATION
HEALTH
RECREATION & CULTURE
CLOTHING, FOOTWEAR
ALCOHOLIC BEV, TOBACCO
Inflation
Rate
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Source: Philippine Statistic Authority (Household Final Consumption Expenditure)
CAUSING CONSUMERS
TO REPRIORITIZE…
% SHARE
OF SPEND
BASICS % spend
change vs. YA
Is rate of change HIGHER,
LOWER OR SAME vs. YA?
Food & Beverage +2.8%
Personal Care & Miscellaneous +10.5%
Housing & Utilities +8.5%
NEEDS % spend
change vs.
YA
Is rate of change HIGHER,
LOWER OR SAME vs. YA?
Transport +0.2% same
Communications +4.7%
Education +18.7%
WANTS % spend
change vs.
YA
Is rate of change HIGHER,
LOWER OR SAME vs. YA?
Health +3.7%
Alcohol & Tobacco -3.7%
Furnishings +7.4%
Recreation +3.7%
Clothing -0.9% same
Restaurant & Eating out +5.5%
Spend for discretionary have slowed
down vs. year ago
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OUTLOOK FOR 2019 MAY NOT BE SO FAR FROM
CURRENT CONDITIONS
Sources: Bangko Sentral ng Pilipinas, World Bank, Asian Development Bank, International Monetary Fund
GDP
INFLATION
EXCHANGE RATE (rate per USD)
7% - 8%
2% - 4%
P50 - P53
INSTITUTIONS / PRIVATE
SECTOR 2019 FORECAST
GOVERNMENT
2019 TARGETS
4.0% – 4.3%
6.6% – 6.7%
P51 – P58
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WITH THE ELECTIONS EXPECTED TO CONTRIBUTE
SLIGHTLY HIGHER GDP FOR 1H
Sources: http://www.neda.gov.ph/2018/01/23/13833/
• Significant increase in money circulation
➢ Government spending
➢ Campaign machineries and advertisement
• Money goes all the way to consumer homes
➢ Creation of jobs
➢ More small scale businesses
• More spending power for consumers
But in recent years, elections have shown to have
less impact to GDP…
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FMCG GROWS FASTER IN ELECTION YEARS, DRIVEN
BY FOOD TOTAL FMCG - Average Value % Growth vs YA
FOOD NON-FOOD
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THE BOON & BANE OF TRAIN
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. Personal
Income
Tax
• Excise Tax of Petroleum / Coal
• Excise Tax of Automobiles
• Tax of Sugar- Sweetened
Beverages (SSB Excise Tax)
What is TRAIN?
TAX
REFORM FOR
ACCELERATION &
INCLUSION LAW
“TAX REMOVED FROM YOUR INCOME ADDED TO YOUR NEEDS”
SUGAR-SWEETENED BEVERAGE TAX
Carbonated
Softdrinks
Energy
Drinks
Isotonic
Drinks
Liquid
Concentrates
Powdered
Concentrates
RTD Juices
Canned
RTD Juices
Non-Canned
Tea
Drinks
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BACK TO BASICS & MAKING IT FIT To make ends meet, shoppers employ strategies that would enable them to retain important items.
REDUCE PIECES/ TRIP
CHOOSE A SMALLER SKU/ TRIP
SHIFT TO CHEAPER BRANDS
Shopper gets to keep similar product experience through
another brand.
SHIFT TO ANOTHER CATEGORY
Shopper gets to keep the needstate through another
product type/category.
Shopper gets to keep the category to fit their budget.
Source: 2018 Nielsen Kumusta na Juan at Aling Nena, Round 2
BACK TO BASICS • ABC – lessen luxuries, eating out, travel, reduce savings
• C2D- cut down categories or adjust spend, alter eating or buying behavior, no more wants for kids
• D2E – education at risk, compromising morals, food on the table above all else
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AS CONSUMERS COPE WITH INFLATION, THEY ADJUST THEIR
EATING OUT HABITS IN DIFFERENT WAYS
Spending is managed through advanced planning, avoid impulse
Leverage on various discounts (vouchers)
Significantly reduced frequency of eating out
• Now seldom go to CDR and Fine Dining Restaurants
• Only during special occasions because it would be free
“Dati every week kami, ngayon halos every month nalang”
Search for cheaper meal options
Eating out is now a luxury they cannot afford • Eating out is no longer part of
their priorities
Source: 2018 Nielsen’s State of Juan & Aling Nena (qual report – Round 2)
UPPER CLASS MIDDLE CLASS LOWER CLASS
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MANUFACTURERS HAVE REACTED IN DIFFERENT WAYS
REFORMULATION NEW SIZES / PACKS REBRANDING / PROMOTIONS
Nestea Sugar Free - March 2018 Nestea/ Nesfruta 500ml - April 2018 C2 Re-Launch –January 2018
Swakto (200ml) – July 2017 Gatorade Promo – April 2018 Gatorade G Active - June 2017
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
THE CONVENIENCE LIFESTYLE
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CONVENIENCE LIFESTYLE STILL DOMINATES Busier lifestyle are making convenient options very relevant
Apps for
everything
Accessibility of store and
speed of service matter
Extended hours of
operation
Types of services
we use
The rise of eating
out
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Retailer Store Count, Q2 2018
MODERN RETAILERS EXPAND TO MEET THE NEED FOR
ACCESSIBILITY
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SMALL FORMAT STORES ARE THE NEW GOLIATH Modern trade outlets, self-service, 150-500 sqm, focusing on food, drink, and small
shopping trips
Exclusions: Pharmacies, Sari-sari stores and Market Stalls
Small
Supermarkets
Mini-marts &
Groceries
Convenience
Stores Petrol
Stations
CLOSER TO HOMES OR COMMUTE, ANSWER NEED FOR SMALLER, FREQUENT TRIPS
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CVS SUCCEED AS “BEST OF BOTH WORLDS”
Source: 2018 Shopper Trends quals
Cheapest option
But staff not clean, no dress code,
food presentation not as clean
Only lunch & dinner
CARINDERIA
Clean and efficient staff
Food is pre-packed, looks clean
Available 24/7
Value offerings
Faster service because it is just heated
Most accessible especially for office setting
CVS
FAST FOOD/
QSR
More expensive option
Need to travel far
Longest queues during peak hours,
slow service
MORE FOR LESS
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FOOD
PARKS
CONVENIENCE MEANS HAVING AS MANY FOOD
CHOICES IN ONE PLACE
AGGREGATOR
FOOD APPS
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E-COMMERCE BOOM AS IT FITS INTO CONVENIENCE
LIFESTYLE Lines between online and offline continue to blur
Traditional brick-and-mortar
retailers are expanding their
digital presence, while pure-
online retailers are opening
physical stores.
Bricks versus clicks is
outdated; bricks and clicks is a
more apt description
&
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92% OF ONLINE FILIPINOS HAVE BOUGHT ONLINE
Source: Nielsen Bricks to Clicks 2018 (Online Filipinos - Urban Nationwide)
92% (18.5M)
are Past 6 Months
online
shoppers
33%
Gadgets/ Electronic
25%
Beauty Products
25%
Food
Delivery Online
24%
Personal Care
Products
28%
Shoes & Apparel
16%
Baby Products
17%
Airline Tickets
19%
Jewelry,
accessories & bag
21%
Packaged Food
& Beverages
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BARRIERS
Low Credit Card
and Cashless Payment
Penetration
Infrastructure and
Logistics
Delivery promise
Lack of different
assortment,
price and promo
incentives
Trust
CONVENIENCE
Reducing time and
effort spent shopping
DEAL
SEEKING
Finding best
price possible
INFORMED
DECISION
MAKING
Getting information
and reviews
MOTIVATORS
PRODUCT
ASSORTMENT
More choices than
available locally
MORE MOTIVATORS THAN BARRIERS. TODAY, ONLY TRUST ISSUES
REMAIN AS BARRIER TO ONLINE PURCHASE
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Purchase Channels in the P6M (%)
LAZADA, SHOPEE AND FB ARE TOP PLATFORMS Facebook is the #3 platform reinforcing the growing prevalence of independent merchants
Base: Among P6M online shoppers of category
Source: Q19/ Q20/ Q21. Purchase Channels in the P6M
FMCG
Sig higher/ lower vs Total
Beauty Products Fashion Apparel &
Accessories
61%
47%
29%
45%
39%
29%
59%
44%
22%
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SHOPPING
MOTIVATION
PROMOS DRIVE SHOPPERS TO BUY ONLINE ON IMPULSE Shoppers go online looking for good deals and discounts and end up buying on impulse. This
reinforces the potential of online in increasing total basket size.
TRIGGERS FOR SHOPPING
ONLINE
Source: Nielsen Bricks to Clicks 2018 (Homepanel – among GMA homes who have bought online P6M )
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Source: Nielsen Global Analysis
PHILIPPINES IN EMERGING STAGE BUT ALL SET TO MOVE
FORWARD
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CONNECT & ENGAGE
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STABLE FOLLOWING EXCEPT DIP IN RADIO AND
INCREASE IN INTERNET
Data Source: Consumer and Media View (CMV). National Urban Philippines, N= 2500 per year for Q3 2017-Q3 2018
TV
OOH
INTERNET
RADIO
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MORE & MORE FILIPINOS ARE CONNECTED,
REGARDLESS OF AGE OR SOCIAL CLASS Highest incidence among Gen Z and Millennials
Source: CMV, 10-59 years old, ABCDE, Total Urban Philippines
(Q2’18)
% Used Internet in the past 4 weeks
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INTERNET IS AN INTRINSIC PART OF OUR EVERYDAY LIFE
The internet is always ON – anytime, anywhere
Source: Consumer and Media View (CMV). National Urban Philippines, N= 2500 per quarter
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THE NEW NORMAL – BREAKING DOWN STEREOTYPES
Megatrends that are shaping new social norms
Young consumers empathize with brands
that speak to their new world view
URBANIZATION INTERNET &
GLOBALIZAITON
TRAVEL INDIVIDUALISM
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1. ADS THAT SHOW THEIR NEW WORLD VIEW Separated or Solo parents, Gender acceptance, Breaking gender stereotypes
Nido Protectus 3+
Bench “Amoy Kita” One SKY “Daddy Mommy”
Dove My Hair, My choice
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2. ADS THAT TUG AT YOUR HEARTSTRINGS
In 2018, Jollibee Studios produced close
to 10 minute viral videos
McDonalds “Bros” commercial about
OFW families
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VICKS Learning to Love
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3. ADS THAT MAKE YOU THINK BEYOND THE BRAND
(SOCIAL RELEVANCE)
Lucky Me (anti-bullying)
Safeguard (respect for ethnic diversity)
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Gilette (toxic masculinity)
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OPTIMISTIC BUT CAUTIOUS TIMES AHEAD
• Country is still good in terms of macro fundamentals but need to be cautious based on whether
inflation will worsen or recover.
• With 2019 as election year, growth in Food spend may help cushion any inflation impact
• Bottom line, differentiated strategy needed
FOOT TO THE FLOOR
• E-commerce especially for personal
care, beauty products
• Convenience-related initiatives
• Small format expansion strategy
• Digital advertising
• Consider entering growing categories
like water
• Advertising themes to build brand
empathy
HIT THE BRAKES
• Focus on innovations that drive
value or absolute affordability –
smaller packs, more affordable
alternatives in basic goods & eating
out
• Basics over discretionary items
• Re-assess premium launches
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LEARN MORE ABOUT OUR SYNDICATED STUDIES
E-COMMERCE AND OMNI-CHANNEL
LANDSCAPE 2018
Online Survey + Homepanel analysis
QUALITATIVE STUDY ON IMPACT
OF TRAIN LAW
(2 rounds in 2018 - Jan/ July)
Contact: Lou-Ann Navalta ([email protected])
NOW OFFERED AT DISCOUNTED RATES! PRIOR TO 2019 RUN
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
Patrick Cua
Lou Ann Navalta