2020.08 - Indonesia Macroeconomy & FMCG Update Q2 2020

INDONESIA MACROECONOMY
& FMCG UPDATE Q2 2020

A LONG JOURNEY OF RECOVERY
DATE : AUGUST 2020
PREPARED FOR :
Copyright © 2020 The Nielsen Company. Confidential and proprietary.

BPS
THE PANDEMIC SITUATION IS IMPACTING THE
FUNDAMENTAL ECONOMY
GDP is declining in Q2’20 after slow down in Q1. Inflation is also getting lower in first half of 2020
GDP GROWTH (%) ANNUAL INFLATION (%)
2012 - 2018 2019 2020

8.4 8.4
5.58
2018 The Nielsen Company. Confidential and proprietary.
5.02 4.79 5.03 5.07 5.17 5.07 5.05 5.02 4.97
2.97
FY 2019
5.02
3.6
3.4 3.1 3.3 3.4
3.0 3.0
2.5 2.7
2.0
-5.32
FY FY FY FY FY FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 DEC DEC DEC DEC DEC DEC MAR JUN SEP DEC MAR JUN SEP DEC
13 14 15 16 17 18 19 19 19 19 20 20 20 20
Copyright © 2020
13 14 15 16 17 18 19 19 19 19 20 20 20 20
Source: bps.go.id 2
BPS
HH CONSUMPTION IS DECLINING IN Q2’20
Not only consumer’s spending, but also business and government expenditures are impacted negatively in this
pandemic situation.
Q2’20 - GDP CONTRIBUTION GDP EXPENDITURE

BY EXPENDITURE (%) GROWTH
5.4 5.1 5.0 5.0 5.0 5.1 5.0 5.2 5.0 5.0
2.8
EXPORT/GDP 15.7%
HOUSEHOLD
IMPORT/GDP 15.5% CONSUMPTION 2013 2014 2015 2016 2017 2018 | Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20
57.9
-5.5
NET EXPORT +0.2%
8.2
6.9
5.4 4.8 5.2
3.7
GOVERNMENT 2.0 2.1
30.6 SPENDING
1.0 0.5
2013 2014 2015 2016

-0.2 2017 2018 | Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20
-6.9
8.7
2.7 5.3 5.1 6.2 6.7
5.0 5.0
0.2 GROSS FIXED 4.1 4.5 4.2 4.1
1.8
CAPITAL
FORMATION
HH Gov. Investment Net Others 2013 2014 2015 2016 2017 2018 | Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20
Consumption Spending Export/Import
Copyright © 2020
-8.6
Source: bps.go.id 4
INFLATION IS SLOWER IN Q2, INCLUDING LEBARAN FESTIVE
Lower inflation in the past 3 months is coming from almost all sectors except health and transportation
MONTHLY INFLATION MONTHLY

BY COMPOSITION INFLATION & CPI
2020 Jan+Feb+Mar
2020 Apr+May+Jun Consumer Price Index*
GENERAL 0.8
0.3 Monthly Inflation (%)
120 118.2 3.0
FOOD, BEVERAGES & CIGARETTE 2.7
0.2 118 116.1
CLOTHING AND FOOTWEAR 0.5 2.5
0.2 116
HOUSING, WATER, ELECTRICITY, AND HOUSEHOLD FUEL 0.2 114 112.4

0.1 2.0
EQUIPMENT AND MAINTENANCE OF HOUSEHOLD ROUTES 0.4 112
0.2 109.0
1.0 110 1.5
HEALTH
0.6
108
TRANSPORTATION -1.7
0.9 106 104.5 1.0
0.69
INFORMATION, COMMUNICATION, AND FINANCIAL SERVICES -0.1 0.59 0.55
-0.3 104
101.0 0.5
RECREATION, SPORT, AND CULTURE 0.3 102 100.0 0.18
0.2
-0.1 100
EDUCATION
0.0 0.0
98
RESTAURANT 0.7
0.5 96 -0.5
1.9
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
PERSONAL CARE AND OTHER SERVICES
1.2
Copyright © 2020
Source: bps.go.id 5
BANK
INDONESIA
OVERALL CONFIDENCE IS SLIGHTLY UP IN JUN 2020 DRIVEN BY

CONFIDENCE ABOUT FUTURE CONDITION
Consumer confidence is significantly down during the pandemic and quarantine living phase. However, In the latest
month (Jun’20), Indonesian consumer start to have an optimistic mindset about future.
CCI CECI CEI

150
JUN’20
140 129
CONFIDENCE ABOUT FUTURE
130
CONDITION
120
110
122
100
105
90 CONSUMER CONFIDENCE
80 84 84
70
60
50 CONFIDENCE ABOUT CURRENT
CONDITION
40
30
46
20
10 CCI - CONSUMER CONFIDENCE INDEX
CECI - CONSUMER ECONOMIC CONDITION INDEX
Copyright © 2020
0 CEI - CONSUMER EXPECTATION INDEX

FEB17 JUN17 OCT17 FEB18 JUN18 OCT18 FEB19 JUN19 OCT19 FEB20 JUN20
Source: Bank Indonesia 6

TCB
YET MORE THAN HALF OF CONSUMER ARE WORRIED ABOUT

ECONOMY AND RECESSION
Top 3 concerns on ECONOMY, HEALTH and WORK LIFE BALANCE are getting stronger in recent quarter
TREND OF RECESSIONARY TOP 5 MAJOR CONCERNS

SENTIMENT AMONG CONSUMER
Q2 19 Q1 20 Q2 20
Yes No 78
THE ECONOMY 37% 35% 56%
61
56 57 57 56 57 HEALTH 8% 23% 29%

51 52
WORK LIFE BALANCE 16% 21% 24%

49 48
44 43 43 44 43
39 CRIME 9% 9% 12%
JOB SECURITY 6% 10% 10%

22
Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20
Copyright © 2020
Q : Do you think your country is in an economic recession at the moment? Q : What are the top 5 major concerns among consumer ?
Source: The Conference Board ® Consumer Confidence Survey, conducted in collaboration with Nielsen 7
TCB
ALL SECTORS RELATED TO SPENDING INTENTION CONTINUE

TO SLOW DOWN IN Q2 2020
And there has been a slightly increase in the consumer statement on ‘have no spare cash’. But the intention to save
money remains high
*Note : Q1 2020 fieldwork is based on Jan-Feb 2020 Q2’9 Q1’20 Q2’20

Putting into savings 67% 62% 55%
Investing in shares of stocks / mutual funds 40% 34% 30%
Paying medical insurance premiums 21% 21% 20%

Holidays / vacations 44% 36% 18%
Paying off debts / loans / credit cards 21% 21% 18%
New technology product 27% 24% 17%
Home improvements / decorating 28% 27% 17%
Out-of-home entertainment 28% 24% 13%
Retirement fund 14% 16% 12%
New clothes 26% 23% 12%

Copyright © 2020
Have no spare cash 3% 4% 7%
9
Source: The Conference Board ® Consumer Confidence Survey, conducted in collaboration with Nielsen
LPS
SAVING AND INVESTMENT FUND IS STILL INCREASING

Yet softening trend in Q2 (May) 2020, indicating that the spare cash owned by consumers during the pandemic
situation is also limited. Saving account trend in the back is also slightly softening.
+5.63%
+7.48%
Rp4,640,177
Rp4,392,957
FUND FROM SAVING Rp4,087,257
ACCOUNT + TIME DEPOSIT
(IN BILLION RP) Q2 POSITION 2018 Q2 2019 Q2 2020 Q2
(Up to May)
SAVING ACCOUNT TIME DEPOSIT
39 37 34 0.8 0.7 1.3

% CUSTOMER % CUSTOMER
17+ 17+
2018 2019 2020 2018 2019 2020
Q1 POSITION Q1 POSITION
UPPER 1 30 27 23 UPPER 1 61 66 46
WHO HAVE TIME

% OF SEGMENT
% OF SEGMENT
58 58 55 84 87 81
SAVING ACC
UPPER 2 28 31 32 UPPER 2 23 21 35
WHO HAVE
DEPOSIT
MIDDLE 1 28 28 29 MIDDLE 1 13 12 13
Copyright © 2020
MIDDLE 2 9 10 13 MIDDLE 2 4 1 5
LOWER 4 3 3 LOWER 0 0 1
SOURCE: OTORITAS JASA KEUANGAN 2018– 2019 / WWW.OJK.GO.ID | CUSTOMER PENETRATION - CONSUMER MEDIA VIEW 10
CI
INTENTION TO SAVE AFTER PANDEMIC IS HIGHER

Consumers have realized the importance of savings in unprecedented times like covid-19 pandemic, thus create high
intention to save and invest better in the future.
INTENTION TO SAVE AND INVEST INTENTION TO OPEN NEW PRODUCTS

AFTER NEW NORMAL (%) AFTER NEW NORMAL (%)
9% TOTAL
The pandemic situation… 1% Base: 308
32% 10% INVESTMENT PRODUCTS 25

LIFE / HEALTH INSURANCE
80% 24
UNSECURED LOAN
22
HOME LOAN / MORTGAGE
15
INSTALLMENT LOAN FOR
48% LUXURIOUS PRODUCTS WITH
CREDIT CARD
15
CASH LOAN FROM CREDIT CARD 14
Triggers me not to save / invest at all in the future INSTALLMENT LOAN FOR DAILY
Triggers me not to save / invest more in the future NEEDS WITH ONLINE LOAN 14
Neutral intention to save / invest more CASH LOAN FROM ONLINE LOAN 13
Triggers me to save / invest more in the future INSTALLMENT LOAN FOR
LUXURIOUS PRODUCTS WITH 13
Triggers me to really save / invest more in the future ONLINE LOAN
Copyright © 2020
CAR LOAN 7
SOURCE: NIELSEN COVID-19 IMPACT ON FINANCE BEHAVIOR

11
CPS
WITH THE UNCERTAINTY, HOUSEHOLD ARE CELEBRATING

FESTIVE DIFFERENTLY
Household across SES are reducing their total spending compare to last year Festive
HH SPEND / BUYER (MONTHLY) – 000IDR HH SPEND / BUYER BY SES
% GROWTH TOTAL % GROWTH UPPER (16%) MIDDLE (56%) LOWER (29%)

8,000 Q2 20 vs YA -23% 12,000 Q2 20 vs YA ↓↓ ↓↓ ↓↓
7,000
10,000
5,146
4,939
4,687
6,000
3,977
8,000
5,000
4,000 6,000
3,000
4,000
2,000
2,000
1,000
0 0
Copyright © 2020
Q2'17 Q4'17 Q2'18 Q4'18 Q2'19 Q4'19 Q2'20 Q2'17 Q4'17 Q2'18 Q4'18 Q2'19 Q4'19 Q2'20
Source: Nielsen CPS Data – Additional Spending +78 FMCG Homepanel – Q2 2020 vs LY 13
CPS
CONSUMER SPENDING IS FOCUSING ON BASIC NECESSITIES SUCH AS

FMCG, TELCO AND FRESH FOOD
On the recent trend, there is a slightly increase on several sectors such as health and leisure due to Lebaran celebration
HH SPENDING HH SPENDING
CONTRIBUTION % GROWTH*
Q2 2019 Q2 2020 VS Q2 LY VS Q1 TY
• FMCG ●
STRONG GROWTH ●
29.5 • Telecommunication
23.3
18.8 19.2 19.3

16.9 MODERATE GROWTH • Food ●
11.7
8.4 8.4
7.4 7.2
6.2 • House Related ●
5.0 ●
3.2 3.8 3.7 • Transportation
2.7 3.2
1.0 1.0 • Education ●
DECLINE GROWTH • Health ●
FMCG Food Housing Transport Comm Education Health Saving + Leisure Insurance • Saving + Loan ●
(Fresh & Related Loans • Leisure ●
Staples) • Insurance ●
Copyright © 2020
STRONG MODERATE DECLINE
Source: Nielsen CPS Data – Additional Spending +78 FMCG Homepanel – Q2 2020 vs LY above +5 between +5 and -5 below-5 14
CPS
IN HOME, HOUSEHOLD SPEND ON FMCG IS GROWING, DRIVEN BY ALL SES

• UPPER SES : Increasing in basket size and slightly increased the shopping trip
• MIDDLE SES : Same movement behaviour with Upper SES with slightly less frequent shopping trips
• LOWER SES : Tend to stock up more with less frequent of purchase
FMCG SHOPPING
VOL PER HH SPEND PER HH WEIGHT PER TRIP SPEND PER TRIP
PURCHASE TRIP
TOTAL PANEL
GROWTH
6.5% 8.3% 6.8% 8.5% -0.2%
UPPER (16%) 6.5% 11.8% 3.0% 8.2% 3.4%
MIDDLE (56%) 5.1% 7.4% 3.9% 6.2% 1.2%
LOWER (29%) 6.3% 5.7% 10.7% 10.2% -4.0%
4.0 AND ABOVE% BETWEEN 4.0% -4.0 AND BELOW

Copyright © 2018
Source: Nielsen CPS Data – FMCG only - Q2 2020 vs LY

15
CPS
UPPER CLASS CONSUMERS ARE ABLE TO COPE WITH RECENT SITUATION.

MIDDLE AND LOWER CLASS START TO MAKE PRIORITY TOWARDS NECESSITY
INDULGENCE , RTD AND BEAUTY categories seems to be impacted during pandemic, especially driven by MIDDLE and
LOWER SES.
VOL = 6.5% VOL = 5% VOL = 6%

UPPER MIDDLE LOWER
VALUE GROWTH
CLASS (16%) VAL = 12%
CLASS (56%) VAL = 7%
CLASS (29%) VAL = 6%
COOKING AID, INSTANT FOOD, SNACK,

10% AND MORE COOKING AID, INSTANT FODD, PHARMA COOKING AID, HOMECARE, PHARMA
DAIRY, BASIC PC, PHARMA
2%- 10% ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

SNACK, DAIRY, COFFEE + TEA, BASIC PC, INSTANT FOOD, DAIRY, COFEE + TEA, BASIC
HOMECARE
HOMECARE ;
PC
;;
+2%- 0% COFEE+TEA*, RTD, SNACK
0% - [-2%] RTD
BEAUTY
[-2%] AND MORE BEAUTY RTD, BEAUTY
Copyright © 2018
* = Upgrade to digital life style (ECOMM NON APPS, FOOD DELIVERY, ONLINE SERVICE)
Source: Nielsen CPS Data – FMCG only - Q2 2020 vs LY 16
RMS
RETAIL SALES SHOWS THAT FMCG GROWTH IS SLOWING DOWN POST

COVID-19 LOCAL SITUATION AND QUARANTINE LIVING
However recent trend on June 2020 data shows a slight better picture in comparison with May 2020
VALUE, VOLUME GROWTH

& PRICE INCREASE | TOP 68 FMCG CATEGORIES
GDP
GROWTH 5.1 5.2 5.0 -4.3
INFLATION 3.6 3.1 2.7 2.0
10
7
3 5 1 4 4 2 5 0
2
(2) (1) (1) (3) -1 -3
(3)
FMCG (7) -19
(26)
FY 2017 FY 20018 FY 2019 MAT JUN'20 YTD JUN20 JUN'20 JUN'20 vs

MAY'20
Copyright © 2020
FMCG Value Growth FMCG Vol Growth (/unit) FMCG Price Increase (/unit)
17
RMS
QUARANTINE LIVING SITUATION IS NEGATIVELY IMPACTING

CONSUMER CONSUMPTION
During fasting period, both Cigarettes and FMCG are declining much higher than expected. The decline of FMCG
Industry is faster in volume unit except during festive period.
CIGARETTE FMCG
Volume (Bill Stc) Value (Trillion Rp) Volume (Bill Bags) Value (Trillion Rp)
20.4 20.1 34.3

19.5 33.1
31.1
10.3 10.2 10.3 27.9
16.1
22.6 22.6 8.3

21.3
20.1
GR VS YA P12M P6M P3M P1M GR VS YA P12M P6M P3M P1M

VALUE -3% -7% -14% -11% VALUE 2% -1% -9% -19%
VOL STC -7% -13% -20% -17% VOL UNIT -3% -7% -16% -19%
Copyright © 2018
JUN17 SEP17 DEC17 MAR18 JUN18 SEP18 DEC18 MAR19 JUN19 SEP19 DEC19 MAR20 JUN20 JUN17 SEP17 DEC17 MAR18 JUN18 SEP18 DEC18 MAR19 JUN19 SEP19 DEC19 MAR20 JUN20
Source: Nielsen RMS Data 18

RMS
THE SLOWING DOWN OF BEVERAGES AND PERSONAL CARE IS

IMPACTING OVERALL FMCG GROWTH
However we’ve seen an improvement in RTD, Beauty and Homecare category as they start to rebound in JUN20 vs last
month
Data ending JUN20

RETAIL SALES GROWTH Vs. YA
VALUE GROWTH vs YA vs PP VALUE GROWTH vs YA vs PP
FMCG P12M P3M P1M FMCG P12M P3M P1M

COOKING AID (10%) 5% 3% -21%

FOOD(33%) 3% -6% -16% INSTANT FOOD (10%) 5% -4% -10%
SNACK + CONFECTIONERIES (13%) 0% -14% -16%
DAIRY (14%) 6% 2% -13%
BEVERAGES(35%) 1% -12% -11% COFFEE + TEA (8%) -1% -10% -29%
RTD (14%) -2% -26% 8%
BEAUTY (10%) -1% -23% 10%
PERSONAL CARE (20%) 1% -14% 3%
BASIC PC (10%) 4% -5% -2%
Copyright © 2018
HOMECARE (9%) 5% 1% 11% HOMECARE (9%) 5% 1% 11%

PHARMA (3%) 7% -4% -4% PHARMA (3%) 7% -4% -4%
19
CPS
MORE HOUSEHOLD ARE BUYING THESE CATEGORIES IN JUNE 2020

COMPARED TO PREVIOUS MONTH
Middle & Lower are driving RTD, Beauty is more into Upper SES while in Homecare more Upper & Lower
PERIOD : June 2020 ( 4weekly ) vs May 2020 ( 4weekly)
RTD BEAUTY HOMECARE
PENETRATION SPEND/BUYER PENETRATION SPEND/BUYER PENETRATION SPEND/BUYER

CHG (+/-) (% GROWTH) CHG (+/-) (% GROWTH) CHG (+/-) (% GROWTH)
TOTAL ▼ ▲ TOTAL ▲ ▲ TOTAL ▲ ▲

▲
UPPER ▼ UPPER ▲ ▲ UPPER ▲ ▲
MIDDLE
▼ ▲ MIDDLE ▲ ▲ MIDDLE ▲ ▲
LOW ▲ ▲ LOW ▲ ▲ LOW ▲ ▲

Copyright © 2018
DIRECTION SIGNIFICANT
▼▲ Positive, Neutral Negative
Source: Nielsen CPS Data – FMCG only – June 2020 ( 4weekly ) vs May 2020 ( 4weekly) 20
RMS
TOP 10 CATEGORIES :
BEVERAGES, SNACKING, AND INDULGENCE CATEGORIES ARE
IMPACTED THE MOST IN P3M
Coffee, Mineral water, Skincare growth is significantly impacted by restricted living period – but these categories has
shown a positive trend post quarantine lifted in recent month.
INDONESIA TOTAL | TOP 1—10 CATEGORIES | GROWTH | ENDING JUN20
P12M P3M P1M vs PP
1 2 3 4 5 6 7 8 9 10
16
13
11 10
5 4 6 4
1 2 3 1
0
(0) (2) (1)

(4) (3) (3) (4) (3)
(10) (9) (10) (11)
(22)
(27) (26)
(30) (31)
Instant Noodles Powder Milk Biscuit Coffee Cooking Oil Mineral water Liquid Milk Baby Diapers Skincare Tea-RTD
Copyright © 2018

RMS
NEXT 11-20 CATEGORIES :
PERSONAL CARE IS ALSO IMPACTED MORE DURING PANDEMIC
PERIOD
But we are seeing an improvement in cologne and indulgence categories (snack, chocolate) in post quarantine lifted
INDONESIA TOTAL | NEXT 11—20 CATEGORIES | GROWTH | ENDING JUN20
P12M P3M P1M vs PP
11 12 13 14 15 16 17 18 19 20
17
13 12 13
10
8
3 3 4 4 3 3 3 3
0 1 2
(4) (3) (2) (2) (3)

(8) (8) (10)
(14)
(17)
(27) (26)
(34)
Copyright © 2018
Snack Toilet Soap Sweetened Shampoo Detergent Cologne Stock Soup Toothpaste Chocolate Total Candies2
Condensed Milk
SCANTRACK
EMERGING OF COVID-RELATED CATEGORIES IS STILL SHOWING STRONG

GROWTH DESPITE SHOPPING TRIPS DECLINE DURING RESTRICTED LIVING
PHASE
% Value Growth vs YA | Total Key Accounts | 10 Selected Categories with Biggest Growth Gap after COVID-19 Local
LIQUID HAND CANNED SEASONING LIQUID TOMATO SEASONING

HAND SOAP SANITIZERS FISH & MEAT LIQUID CHEESE VITAMIN ANTISEPTIC SAUCE FLOUR DRY NOODLE
(206)
273
Pre-COVID19 COVID-19 Global COVID-19 Local
(208)
172
163
(99)
(108) (99)
88 (80) (73)
79 (86) (64) (65)
62 68 61
58
49 48
20 21 14 22 16 27 34
4 5
14
6 5 5
15 10 16
2
-1 -7
Important Note:.
(%) = Previous wave COVID-19 Local (i.e. W1020 to W2120) As the disease progresses in Indonesia, categories listed here may change
accordingly.
24
SHIFTING CHANNEL PREFERENCES

RMS
POST QUARANTINE PHASE, GT AND HBC (HEALTH BEAUTY
COSMETIC) CHANNEL ARE SLIGHTLY BOUNCE BACK
Minimarket still manage to grow in the P3M with smaller festive impact. While General Trade and HBC channel are
impacted the most but have started to stabilize in JUN20
(%CONT) TOTAL HSM (12%) MM (36%) GT (49%) HBM (1%) HBC (2%)
GROWTH % vs YA P12M 2 -6 9 -0 13 -6
Data ending JUN20
GROWTH % vs YA P3M -9 -15 3 -15 -1 -44
GROWTH % vs PP P1M -8 -27 -8 -2 -12 2
STORE GRO (%) W1 18 vs YA 0 -1 6 0 0 1
VALUE (Rp) INDEX – DEC’17

200
150
100
Copyright © 2018
50
DEC17 MAR18 JUN18 SEP18 DEC18 MAR19 JUN19 SEP19 DEC19 MAR20 JUN20
MT Hyper/Super MT Minimarket General Trade H&B Medical H&B Cosmetic

CPS
E-COMMERCE :
UPPER SES IS DRIVING THE OVERALL GROWTH OF FMCG E-COMMERCE
UPPER CLASS is able to take advantage the most from e-commerce channel, and to some extent, middle and lower
class are also trying to participate even though still very limited.
TOTAL UPPER (16%) MIDDLE (56%) LOWER (29%)
PENETRATION (%) TOTAL SPENDING (IDR BILL) SPEND/ BUYER (000)

15.6
388
1,553
257
8.1 248
184
169
8.2
690
5.8
4.5 156
270
2.4
Copyright © 2018
Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20
18 18 18 19 19 19 19 20 20
Source: Nielsen CPS Data
*) Penetration & Spend/buyers and TMAT rolling data 28
CPS
E-COMMERCE :
INCREASING ROLE ACROSS CATEGORY
More Homecare products are being bought from E-commerce along with personal care, driven by
Upper SES
TOP FMCG CATEGORIES TOTAL PANEL FMCG – ECCOMERCE

(SORTED BY PENETRATION %)
GROWTH VS
% CONT GROUP OF CAT
YA
Top 5 Next 6-10 PC BEAUTY **
PC BASIC ***
SKINCARE BABY DIAPERS DAIRY **

HOMECARE ***
TOILET SOAP BISCUIT* INSTANT FOOD ***
SNACK + CONFEC ***
COSMETICS (DECORATIVE) COLOGNE
COOKING AID ***
COFFEE & TEA ***
TOOHTPASTE POWDER MILK
PHARMA ***
SHAMPOO DISHWASHING LIQUID* RTD ***
Copyright © 2018
* Not in the Top 10 list in Q2’19

High Medium Low*
*Small Based
Source: Nielsen CPS Data 29

RMS
WITH THE RESTRICTED LIVING SITUATION, JAVA ISLAND IS IMPACTED

MORE COMPARED WITH OTHERS
Outer Java such as Sumatra, Kalimantan, and Sulawesi have more stable growth.
VALUE AREA CONTRIBUTION, VALUE GROWTH vs YA and PP | MAT (P12M), P3M (Apr-Jun’20), P1M INDONESIA* FMCG
377 T
SUMATRA
KALIMANTAN
P12M 15.0 2% EAST INDONESIA
P12M 5.3 6%
P3M 15.9 -2% P12M 1.7 11%
P3M 5.6 2%
P1M vs PP 16.4 -2% SULAWESI P3M 1.7 -1%

P1M vs PP 5.7 -2% P12M 5.7 11% P1M vs PP 1.7 -3
P3M 5.8 2%
P1M vs PP 5.8 -2%

JAKARTA GR
P12M 20.2 2% OTHER JAVA
BANUSRA
P3M 19.9 ↓ -11% P12M 47.4 1%
P12M 4.7 5%
P1M vs PP 19.7 -10% P3M 46.7 ↓ -13%
P3M 4.4 ↓ -6%
P1M vs PP 46.3 -12%
P1M vs PP 4.4 -3%
Copyright © 2018
*) Incluede East Indonesia for MAT Jun’20

30
A CAUTIOUS OF 2020 – A LONG JOURNEY OF RECOVERY
WHAT THEY HAVE IN MIND HOW THEY SPEND WHICH CHANNEL AND WHERE
CONSUMER’S ANXIETY REGARDING ECONOMY SPENDING IS DECREASING , FESTIVE IS ONLY LARGE FORMAT, MODERN TRADE AND MEDICAL
CONTINUES – QUARATINE AND PANDEMIC GIVING SMALL BOOST TO CERTAIN CATEGORIES. STORES ARE PREFFERED. E-COMMERCE GAINS
SITUATION ARE CREATING MORE PRESSURE TO OVERALL FMCG IS NOT GROWING IN Q2 2020 BUT IT IS MOSTLY ENJOYED BY UPPER SES
OVERALL CONDITION
The pandemic situation is impacting the fundamental of Despite the FMCG in overall is still showing positive With the limited frequency of shopping trips, LARGE
the economy : trend for IN-HOME consumption, but the overall industry FORMAT, MODERN TRADE and MEDICAL STORES
• GDP Growth is negative impacted in Q2 by -5.3% yoy has been impacted especially with the quarantine living are preferred. To some extent, we see e-commerce is
• Consumer confidence is drop, despite that on June phase. Several FMCG sector such as Indulgence, Beauty consistently growing but it is mostly driven by UPPPER
2020 the confidence about future condition is slightly and RTD categories are hit significantly SES.
up MIDDLE and LOWER SES accessibility for e-commerce

• Inflation is controllable, almost all sectors inflation is Different SES reacts differently : is still limited.
slowing down in Q2 2020 • UPPER SES seems to be able to cope with the situation
better. They are able to still increase spending across In June 2020, post quarantine lifted, the drop of General
The overall spending intention is still declining across categories and take advantage from digital platform (e- Trade and Health & Beauty Cosmetic channel seems to
commerce, online delivery, etc) stop, yet overall impact in Q2 is still very steep especially
sector, especially investment, holiday, technology, home
• MIDDLE and LOWER SES start to make adjustments and
improvement and out of home entertainment in Java island.
focus on HEALTH and BASIC NECESSITY categories.
LOWER SES needs to sacrifice some categories to
The intention to save money remains high, however the adjust their spending.
statement of having no spare cash is increase in recent
quarter (small based) Post the quarantine lifted in June 2020, some categories
which previously impacted badly start to show positive
Copyright © 2018
movement however it is still a long journey for recovery

(Cosmetic, RTD-Tea, Min Water, Cologne etc)
32
LOOKING FORWARD
PREPARING FOR THE NEW NORMAL

MEET THE NEW CONSUMER WHAT DOES IT MEANS
● Ensuring that products / communication
● Heightened health awareness resonate with consumer concern

● Focused on quality and safety ● Provide a safe and healthy environment
assurance for shopper
● Renewed desire to “Stay at ● Crate a new occasion to drive
Home” consumption
● Less loyal, more experimental ● Ensuring the right product availability in
the right stores
● Tighter budgets for the masses
Copyright © 2017
● Provide affordable alternatives

34
THE NEW CONSUMER:
1 HEIGHTENED HEALTH AWARENESS
LEARNINGS FROM CHINA
60% 75% 53% 80% 59%

REGULAR MEDICAL MORE EXERCISING MORE HEALTHY PRODUCTS EATING HEALTHY BUY INSURANCE/
CHECK UPS ON SHELF** FINANCING
IMPLICATIONS: ●● Demand for health or wellness products and services

Fresher and healthier alternatives to everyday products
● More shelf space for “healthy” products
Copyright © 2018
Source: Nielsen China, Social Intelligence Solution, Coronavirus Survey fielded Feb. 24 – 29, 2020; ** Nielsen China COVID-19 Retail Industry Impact survey 35
THE NEW CONSUMER: HEIGHTENED HEALTH AWARENESS
1 APAC CONSUMERS WILL TRADE UP FOR

HEALTH
TOP 5 BENEFIT CLAIMS CONSUMERS ARE WILLING TO PAY MORE FOR: READY TO EAT/DRINK PRODUCTS
% of consumers committed to pay extra for these types of products (TB in 5 point scale)
HAS NATURAL SPICES THAT
HELPS ME TO KEEP MY ARE EFFECTIVE FOR HELPS ME TO KEEP MY
IMMUNE SYSTEM STRONG BACTERIAL INHIBITION AND IMMUNE SYSTEM STRONG
KILLING GERMS
IT IS MADE UNDER THE IT IS BASED ON NATURAL
HELPS ME TO KEEP MY
HIGHEST SAFETY STANDARDS INGREDIENTS
IMMUNE SYSTEM STRONG
IT IS IT IS MADE OUT OF IT IS
NUTRITIOUS SUSTAINABLE INGREDIENTS NUTRITIOUS
CONTAINS HEALTHY
IT IS MADE OUT OF HIGH IT IS BASED ON NATURAL SUPPLEMENTS LIKE VITAMIN
QUALITY INGREDIENTS INGREDIENTS C VITAMIN D OMEGA 3 OR
PROBIOTICS
IT IS BASED ON NATURAL IT HELPS ME TO STAY IT IS MADE UNDER THE

INGREDIENTS HYDRATED HIGHEST SAFETY STANDARDS
Copyright © 2018
THAILAND INDONESIA VIETNAM

Source: Nielsen BASES Quick Screen, March 2020 36
1 INNOVATE TO INCREASE BRAND

RESONANCE
PERSONAL CARE BRAND IN HAND SANITIZER INDUSTRY
[SCAN OUTLET]
HAND SANITIZER %GROWTH
Pre-COVID19
COVID-19 Global 273
COVID-19 Local
172
4
Copyright © 2018
Source: RMS Scantrack Data 37

1 RELEVANT “HEALTHY” IMAGE IMPACT

BRAND PERFOMANCE
BRAND WITH “HEALTHY” ASSOCIATION %GROWTH vs YA
195
145
Vitamin C image Healthy image 95
45
-5
Oronamin Y. C1000 Y. C1000 Dettol (T. Gingger Gingger Bear
C (VIT) (ISO) Soap) (Tea L (Coffee) Brand (L.
Milk)
“Ginger” Image “Antiseptic” Image*
MAT JUN20 YTD JUN20 May-20
* Overall health segment is growing while beauty segment is declining
Copyright © 2018
Source: RMS Retail Audit 38

INDONESIA CONSUMER:
2 QUALITY AND SAFETY FOCUSED
IT IS IMPORTANT TO PROVIDE REASSURENCE TO THE SHOPPER DURING “NEW NORMAL”
Copyright © 2018
SOURCE: Nielsen Mall Visit Behaviour

39
THE NEW CONSUMER: QUALITY AND SAFETY FOCUSED
2 COMMUNICATING STEPS TAKEN TO ENSURE SAFETY

Lifebuoy Launches the ‘Six Step Hand

Washing Dance
SRC – SAFETY ASSURANCE @ OUTLET
MERCHANT SAFETY ASSURANCE

Copyright © 2018
Brand promoting social distancing

Source: Public Information, ABS CBN News, Bangkok Post, JD.com Corporate Blog
40
THE NEW CONSUMER:
3 RENEWED DESIRE TO “STAY AT HOME”
IMPLICATIONS: ●● Rise of the Homebody Economy

Shoppers will likely buy more per trip
● Less occassion for consumption
● Spending less time in brick and mortar stores
Copyright © 2018
Source: Nielsen Social Intelligence Solution: Nielsen Survey on Coronavirus（Feb.24-Feb.29） 41

THE NEW CONSUMER:
3 RENEWED DESIRE TO “STAY AT HOME”

BECOMING RELEVANT TO “NEW NORMAL” BY INVOLVE IN CONSUMER NEW LIFESTYLE
Copyright © 2018
Source : Telkomsel MSight 42

THE NEW CONSUMER: RENEWED DESIRE TO “STAY AT HOME”
3 BUILD OCASSIONS FOR IN-HOME CONSUMPTION

CREATING THE NEEDS THRU CREATIVE COMMUNICATION TO BUILD “OCCASION”
Copyright © 2018
Source: Public data

43
THE NEW CONSUMER: RENEWED DESIRE TO “STAY AT HOME”
3 ADJUST IN-STORE EXECUTION STRATEGY
ASSORTMENT SHELF PLAN RIGHT STORE

Know which are your top-selling

Promote to encourage upsize or Ensure visibility of key items on
stores and which stores are
multipack shelves
closing
Copyright © 2018
44
THE NEW CONSUMER: LESS LOYAL, MORE EXPERIMENTAL
4 ENSURE STOCK AVAILABILITY AND RIGHT ASSORTMENT BOTH OFFLINE &

ONLINE
Q : Brand is important, but I will switch across a lot of brands
60%
50%
40%
30%
20%
10%
0%
Laundry
Coffee & Tea
Shampoo Hair Cond

Bread
Water and CSD
Alcohol Bev
Papper
Dairy
Fish & Seafood
Fresh Fruit
Meat Poultry
Salty Snacks
Confectionary
Staples (Rice etc)
Sanitary Prod
Fruit Juice
Skincare
Babies Products
Copyright © 2018
Source: Brand disloyalty study, Nielsen APAC Consumer Loyalty survey online (Q1 2019) 45
THE NEW CONSUMER:
5 TIGHTER BUDGETS FOR THE MASSES
IMPLICATIONS:
● Low cash outlay
products or smaller packs
● Ramp up value for money
offerings
● More aggressive promotions
● Private or local brands may be

more attractive if with price
advantage
● Review price sensitivities and
thresholds
● Slow down of premiumization in
In addition, about 70 million informal workers were at risk, as they
had lost their incomes as a result of the call for social distancing. lower tier markets and overall
down trading
Copyright © 2018
46
THE NEW CONSUMER:
ADRESSING CONSUMER CONCERN IN ADJUSTING THEIR NEW NORMAL
LIVING PHASE
STRONG ITENTION FOR NEW NORMAL RECOVERY OF CONSUMER ACTIVITY

Indication of activity traffic recovery across POI – Based on Google Mobility Report Data
80% of respondent will likely visit the mall
during “New Normal”
Intention to participate in outdoor exercises

is high during “New Normal”
Restaurant, Café, Shopping Centres, Theme Park, Museum, Library, and movie theatre
Grocery, Food warehouse, farmers market, speciality food shops, drug stores and Pharmacies
Copyright © 2018
National Parks, beaches, marinas, dog park, plazas and public garden
Public transport, subway, bus and train stations
Place of work (office)
Residence
SOURCE: Nielsen Mall Visit Behaviour; Google

47
DISCLAIMER
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, merchantability, quality or fitness for a particular purpose or use.
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 accurate or complete. Nielsen is not responsible for the
content or performance or security of any third party web site that may be accessed via hyperlink in this publication and any information on
such sites are not incorporated by reference.
The views expressed in this publication are those of the author(s) and are subject to change, and Nielsen has no obligation to update its
opinions or the information or data in this publication. This publication does not constitute investment, financial, business or other
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use, decisions and actions in respect of this publication. This publication may not be redistributed or published, in whole or in part, without
the express written consent of Nielsen.
Copyright © 2018
55

2020.08 - Indonesia Macroeconomy & FMCG Update Q2 2020

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2020.08 - Indonesia Macroeconomy & FMCG Update Q2 2020

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INDONESIA MACROECONOMY

& FMCG UPDATE Q2 2020

DATE : AUGUST 2020

Copyright © 2020 The Nielsen Company. Confidential and proprietary.

GDP GROWTH (%) ANNUAL INFLATION (%)

2012 - 2018 2019 2020

5.02 4.79 5.03 5.07 5.17 5.07 5.05 5.02 4.97

Q2’20 - GDP CONTRIBUTION GDP EXPENDITURE

2013 2014 2015 2016

MONTHLY INFLATION MONTHLY

HOUSING, WATER, ELECTRICITY, AND HOUSEHOLD FUEL 0.2 114 112.4

OVERALL CONFIDENCE IS SLIGHTLY UP IN JUN 2020 DRIVEN BY

CCI CECI CEI

0 CEI - CONSUMER EXPECTATION INDEX

Source: Bank Indonesia 6

YET MORE THAN HALF OF CONSUMER ARE WORRIED ABOUT

TREND OF RECESSIONARY TOP 5 MAJOR CONCERNS

56 57 57 56 57 HEALTH 8% 23% 29%

WORK LIFE BALANCE 16% 21% 24%

JOB SECURITY 6% 10% 10%

ALL SECTORS RELATED TO SPENDING INTENTION CONTINUE

*Note : Q1 2020 fieldwork is based on Jan-Feb 2020 Q2’9 Q1’20 Q2’20

Investing in shares of stocks / mutual funds 40% 34% 30%

Paying medical insurance premiums 21% 21% 20%

Holidays / vacations 44% 36% 18%

Paying off debts / loans / credit cards 21% 21% 18%

New technology product 27% 24% 17%

Home improvements / decorating 28% 27% 17%

Out-of-home entertainment 28% 24% 13%

Retirement fund 14% 16% 12%

New clothes 26% 23% 12%

Have no spare cash 3% 4% 7%

SAVING AND INVESTMENT FUND IS STILL INCREASING

SAVING ACCOUNT TIME DEPOSIT

39 37 34 0.8 0.7 1.3

WHO HAVE TIME

INTENTION TO SAVE AFTER PANDEMIC IS HIGHER

INTENTION TO SAVE AND INVEST INTENTION TO OPEN NEW PRODUCTS

32% 10% INVESTMENT PRODUCTS 25

SOURCE: NIELSEN COVID-19 IMPACT ON FINANCE BEHAVIOR

WITH THE UNCERTAINTY, HOUSEHOLD ARE CELEBRATING

HH SPEND / BUYER (MONTHLY) – 000IDR HH SPEND / BUYER BY SES

% GROWTH TOTAL % GROWTH UPPER (16%) MIDDLE (56%) LOWER (29%)

CONSUMER SPENDING IS FOCUSING ON BASIC NECESSITIES SUCH AS

18.8 19.2 19.3

STRONG MODERATE DECLINE

IN HOME, HOUSEHOLD SPEND ON FMCG IS GROWING, DRIVEN BY ALL SES

UPPER (16%) 6.5% 11.8% 3.0% 8.2% 3.4%

MIDDLE (56%) 5.1% 7.4% 3.9% 6.2% 1.2%

LOWER (29%) 6.3% 5.7% 10.7% 10.2% -4.0%

4.0 AND ABOVE% BETWEEN 4.0% -4.0 AND BELOW

Source: Nielsen CPS Data – FMCG only - Q2 2020 vs LY

UPPER CLASS CONSUMERS ARE ABLE TO COPE WITH RECENT SITUATION.

VOL = 6.5% VOL = 5% VOL = 6%

COOKING AID, INSTANT FOOD, SNACK,

2%- 10% ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

RETAIL SALES SHOWS THAT FMCG GROWTH IS SLOWING DOWN POST

VALUE, VOLUME GROWTH

FY 2017 FY 20018 FY 2019 MAT JUN'20 YTD JUN20 JUN'20 JUN'20 vs

QUARANTINE LIVING SITUATION IS NEGATIVELY IMPACTING

20.4 20.1 34.3

22.6 22.6 8.3

GR VS YA P12M P6M P3M P1M GR VS YA P12M P6M P3M P1M