Loyalty and Incentive Programs:

Key Drivers of Success

for FMCG Companies
in Asia
 Table of Contents

Part 1:

OVERVIEW OF THE FMCG INDUSTRY IN ASIA AND ITS

IMPORTANCE 2-7

FMCG Companies' Challenges in Asia 4-5

Strategies for Winning the Asian FMCG Market 6-7

Part 2:

THE CRUCIAL ROLE OF CHANNEL PARTNERS IN DRIVING FMCG

GROWTH IN ASIA 8-15

Leveraging Channel Partners to Drive FMCG Success 9-10

Types of Channel Incentive Programs Popular in FMCG Industry 11-13
How to Choose the Right Type of Channel Incentive Program 14-15

Part 3:

TURNING CHANNEL PARTNERS INTO LOYAL ADVOCATES:

A SHOWCASE OF FMCG’S BEST LOYALTY & INCENTIVE PROGRAM 16-21

Mineral Water Brand 18

Condensed Milk Brand 19
Beer Brand 20
Hair care brand 21

ENDNOTES 22-23
About Tada 23

usetada.com Loyalty and Incentive Programs 1

Part 1:
Overview of the FMCG Industry
in Asia and Its Importance

Loyalty and Incentive Programs

 Part 1: Overview of the FMCG Industry in Asia and Its Importance

The Fast-Moving Consumer Goods (FMCG) industry in Asia has become a significant
growth opportunity for companies globally.

With the rising middle class and increasing disposable income, the Asian market has
become one of the largest and most promising markets for FMCG companies. In
2020, the FMCG industry in Asia was valued at $5.5 trillion and is expected to grow
at a CAGR of 6.7% from 2021 to 2026.

However, the market is also highly competitive, with a large number of domestic
and international players vying for market share. To achieve success in this dynamic
environment, companies must be proactive in understanding the key challenges and
opportunities that exist within the region.

But overall, Asia is a key market for the FMCG sector and presents a significant
opportunity for companies looking to tap into its growing consumer base.

In 2020, the FMCG industry in

Asia was valued at
$5.5 trillion
CAGR Growth

025

6.7% FMCG Growth in Asia: Year-on-year

020

015 Q3 2021 3%

010
Q3 2022 4,2%

005

000
2021 2026

usetada.com Loyalty and Incentive Programs 3

 Part 1: Overview of the FMCG Industry in Asia and Its Importance

FMCG Companies' Challenges in Asia

FMCG companies operating in Asia face several challenges, which can make it
difficult to gain a foothold in the market. In this section, we will discuss the most
common struggles that companies face when operating in the region.

1. Market Saturation & Intense For example, consumer preferences

Competition in China may differ significantly
from those in Indonesia or Japan,
The FMCG market in Asia is highly
and companies must tailor their
competitive and saturated, with
products and marketing strategies
numerous players vying for a share
to meet the needs of each market.
of the market.

According to Euromonitor, the

3. Regulatory Hurdles and
top ten FMCG companies in
Complex Supply Chains
Asia account for around 20% of
the market share. The regulatory environment in Asia
can be complex and challenging to
This intense competition makes it
navigate, with different regulations
challenging for companies to
and standards across different
establish a strong foothold in the
countries.
market and gain market share.
Additionally, supply chains can

2. Cultural Differences and be complex and fragmented,

Varying Consumer
Preferences
Asia is a vast and diverse region,
with a multitude of cultures and
languages.
Each country has its own unique
set of customs, traditions, and
preferences, which can make it
challenging for FMCG companies
to create products that appeal to
a wide range of consumers.
which can lead to challenges in
sourcing and distribution.
IMPORTANT
INFO
The APAC FMCG retail landscape
is dynamic & highly fragmented,
characterized by over 26 million
offline stores across the region &
a rapidly expanding e-commerce
channel, which contributes to
nearly 20% of FMCG sales.
(NielsenIQ)

usetada.com Loyalty and Incentive Programs 4

 Part 1: Overview of the FMCG Industry in Asia and Its Importance

4. Lack of Infrastructure and 5. Stringent Regulations

Limited Distribution Networks
Many countries in Asia lack the
infrastructure necessary to support
a robust FMCG industry. Poor roads,
limited access to electricity and water,
and inadequate transportation
systems can make it challenging for
companies to reach consumers in
remote areas.
Depending on the country and
product, there could be different
levels of strict regulations with
a wide range of standards,
guidelines & laws that can make
it difficult for a FMCG company to
comply with as well as very
costly & time-consuming.

Additionally, limited distribution

networks can further compound
these challenges, making it
difficult to get products to
market.

Brands can turbocharge their growth

through a relentless focus on increasing
penetration and consideration. This
requires focusing on what shoppers
actually do – as opposed to what they
say they do in surveys – planning from
the ‘shelf back’ to win the battle in
stores, and relying heavily on advanced
analytics tools to generate the insights
that help brands make the smartest
trade-off decisions.
---
Nader Stefano Elkhweet,
Partner and head of Bain & Company’s
Indonesian consumer products and
retail practices.

usetada.com Loyalty and Incentive Programs 5

 Part 1: Overview of the FMCG Industry in Asia and Its Importance

Strategies for Winning the Asian FMCG Market

To succeed in the highly competitive Asian market, FMCG companies need to have
effective strategies that cater to local consumer needs and preferences, such as:

1. Understanding local consumer needs and preferences

This requires extensive market research and analysis to gain insights
into the cultural, social, and economic factors that influence consumer
behavior.

For example, in China, consumers place a high value on health

and wellness, which has led to the growing popularity of organic
and natural products. In India, consumers place a high value on
affordability, which has led to the success of companies that
offer low-priced products.

2. Adapting product offerings and marketing strategies

to local tastes
Once companies have gained insights into local consumer needs and
preferences, they need to adapt their product offerings and marketing
strategies accordingly. This may involve developing new products or
modifying existing ones to better suit local tastes.

For example, Nestle's Maggi noodles are a popular snack in

India, with flavors such as Masala, Hot & Sweet Tomato and
Thrillin' Curry that are unique to the Indian market. Companies
also need to develop localized marketing campaigns that reso-
nate with local consumers.

3. Investing in digital and e-commerce capabilities

The rise of e-commerce in Asia presents a significant opportunity
for FMCG companies. To succeed in this space, companies need to
invest in digital and e-commerce capabilities, such as developing
e-commerce platforms, mobile apps, and social media strategies.

usetada.com Loyalty and Incentive Programs 6

 Part 1: Overview of the FMCG Industry in Asia and Its Importance

Companies can also leverage technology to gain insights into

consumer behavior and preferences, which can inform product
development and marketing strategies.

4. Building strong distribution and supply chain networks,

as well as channel partner relationships
Effective distribution and supply chain networks are critical for success
in the Asian market. This requires building strong relationships with
various channel partners, like local distributors and suppliers, and
investing in infrastructure to ensure products can be efficiently
transported and stored.

Companies need also to provide the necessary support and resources

to help them succeed. This can include providing training and educa-
tion programs, offering marketing and promotional materials, and
establishing clear communication channels.

5. Developing effective trade loyalty & incentive programs

In addition to building strong channel partner relationships, FMCG
companies can also boost sales and retention rates by developing
effective trade loyalty and incentive programs. These programs are
designed to reward channel partners for their loyalty and sales
performance, and can include incentives such as cash rewards,
bonuses, and merchandise.

Businesses that invest in channel partner

reward programs experience:

32% 71% 67% 55%

Increase in boost product/ increase sales boost customer
revenues brand awareness & market share loyalty

The Incentive Research Foundation (IRF)

usetada.com Loyalty and Incentive Programs 7

Part 2:
The Crucial Role of Channel
Partners in Driving FMCG Growth
in Asia
Loyalty and Incentive Programs
 Part 2: The Crucial Role of Channel Partners in Driving FMCG Growth in Asia

Leveraging Channel Partners to Drive

FMCG Success

In the fast-paced world of Fast-Moving Consumer Goods (FMCG), success depends

on effective distribution and channel management. One key strategy for FMCG
companies to achieve growth and market dominance is by leveraging their channel
partners. By building strong relationships and collaborating closely with channel
partners, FMCG companies can unlock new avenues for success and drive business
growth.

Key Benefits of Leveraging Channel Partners:

Expanded Market Reach: Enhanced Distribution Efficiency:

Channel partners, such as distributors,
wholesalers, and retailers, have
established networks and customer
relationships. Collaborating with these
partners allows FMCG companies to
access a wider market and reach
consumers in diverse locations.
Channel partners play a crucial role in
the distribution process. By aligning
with efficient and reliable partners,
FMCG companies can ensure timely
product availability, efficient supply
chain management, and optimized
distribution routes.

Improved Market Penetration: Effective Marketing & Promotion:

Channel partners possess in-depth
knowledge of local markets, consumer
preferences, and buying behaviors. By
tapping into their expertise, FMCG
companies can better understand
and penetrate specific market segments,
increasing sales and market share.
Channel partners often have their own
marketing and promotional activities.
By collaborating with them, FMCG
companies can leverage these
initiatives to increase brand visibility,
drive product awareness, & stimulate
consumer demand.

Customer Insights and Feedback:

Channel partners have direct interactions with end-consumers, providing valuable insights
and feedback. By actively engaging with partners and leveraging their customer knowledge,
FMCG companies can gain valuable market intelligence and fine-tune their product offerings
and marketing strategies.

usetada.com Loyalty and Incentive Programs 9

 Part 2: The Crucial Role of Channel Partners in Driving FMCG Growth in Asia
Strategies for Winning the Asian FMCG Market
Strong Relationship Building:
Establishing trust, open communication,
and mutually beneficial partnerships are
vital for success. Regular meetings, joint
business planning, and performance
tracking can foster stronger relationships
with channel partners.
Training and Support:
Providing adequate product training,
marketing support, and sales tools to
channel partners empowers them to
effectively promote and sell FMCG
products.
Conclusion:
Leveraging channel partners is a
strategic imperative for FMCG com-
panies seeking sustainable growth
and market leadership. By harness-
ing the capabilities and resources of
channel partners, FMCG companies
can expand their market reach,
enhance distribution efficiency, and
unlock new growth opportunities.
Through strong collaboration, effec-
tive communication, and mutually
beneficial partnerships, FMCG com-
panies can harness the power of
channel partners to drive their suc-
cess in the dynamic FMCG land-
scape.
usetada.com
Incentive Programs:
Implementing incentive programs,
such as trade marketing rewards,
volume-based discounts, and perfor-
mance-based bonuses, can motivate
channel partners to achieve higher sales
and actively promote FMCG products.
Data Sharing and Collaboration:
Sharing relevant data, market insights,
and sales analytics with channel partners
facilitates better decision-making and
collaborative planning, enabling both
parties to align their strategies and drive
mutual success.
Channel Incentive
Programs in Number
B2B customer retention is
27% higher among those with
an implemented loyalty program.
(KPMG)
Companies with B2B loyalty
programs have a 5-20%
increase in annual revenue.
(Invesp)
Loyalty and Incentive Programs 10
 Part 2: The Crucial Role of Channel Partners in Driving FMCG Growth in Asia

Types of Channel Incentive Programs Popular

in FMCG Industry

In the competitive landscape of the Fast-Moving Consumer Goods (FMCG) industry,

channel incentive programs play a crucial role in driving sales, motivating channel
partners, and fostering strong relationships.

These programs provide incentives and rewards to channel partners, such as

distributors, retailers, and wholesalers, to encourage desired behaviors and boost
overall business performance. Here are some popular types of channel incentive
programs widely utilized in the FMCG industry:

1. Volume-based Incentives:
This type of program rewards
channel partners based on the
volume of products they sell or the
targets they achieve. It encourages
partners to focus on increasing sales
and market share, driving growth for
both the FMCG company and the
channel partner.

2. SPIF - Sales Performance

Incentives Funds:

These programs recognize and

reward channel partners who
achieve exceptional sales perfor-
mance. It can be based on criteria
such as sales revenue, market share
growth, or specific product targets.
Sales contests, bonuses, and com-
missions are common incentives
used in this type of program.

usetada.com Loyalty and Incentive Programs 11

 Part 2: The Crucial Role of Channel Partners in Driving FMCG Growth in Asia

3. Trade Promotion Incentives:

FMCG companies often run trade
promotion programs to incentivize
channel partners to promote and
market their products effectively.
This can include offering special
discounts, rebates, or promotional
support to encourage increased
product visibility and consumer
demand.

4. Training and Certification

Incentives:

FMCG companies invest in the

knowledge and skills development of
their channel partners by offering
training programs and certifications.
Incentives are provided to partners
who complete training modules,
acquire specific skills, or become
certified experts in the product or
service category.

5. Loyalty and Rewards

Programs:
Loyalty programs are designed to
foster long-term relationships with
channel partners. These programs
provide exclusive benefits, rewards,
and recognition to partners based
on their loyalty, consistent performance,
and commitment to the FMCG
company's brand and products.

usetada.com Loyalty and Incentive Programs 12

 Part 2: The Crucial Role of Channel Partners in Driving FMCG Growth in Asia

6. Market Development Funds

(MDF):
Market Development Funds are
financial incentives provided by FMCG
companies to channel partners for
marketing & promotional activities.
These funds enable channel
partners to invest in advertising,
point-of-sale materials, and other
marketing initiatives to drive product
visibility & consumer engagement.

7. Cooperative Advertising
Programs:

In these programs, FMCG companies

and channel partners collaborate on
advertising and promotional cam-
paigns. FMCG companies provide
financial support or co-funding for
advertising efforts initiated by channel
partners, strengthening their market-
ing efforts and reinforcing brand pres-
ence in the market.

8. Special Rewards and

Incentives:
FMCG companies often introduce
special rewards and incentives to
align with specific business objectives
or seasonal promotions. These can
include cash bonuses, travel incen-
tives, merchandise rewards, or exclu-
sive experiences to motivate and
engage channel partners.

usetada.com Loyalty and Incentive Programs 13

Part 2: The Crucial Role of Channel Partners in Driving FMCG Growth in Asia

How to Choose the Right Type of Channel

Incentive Program

When choosing a channel incentive program, it's essential to understand that

different programs serve different purposes. What works for one business may not be
suitable for another. Therefore, it's crucial to identify your specific goals and objectives
and choose a program that aligns with them.

Consider what you hope to achieve through your partners, such as increased
sales, market expansion, improved product knowledge, or generating buzz for new
products. By selecting a program that targets your specific goals, you can ensure that
your efforts will be focused on achieving them, and ultimately drive growth for your
FMCG company.

Type of Incentive Program To be used if

You want to motivate partners to

Volume-based Incentives focus on increasing sales and
market share, and driving growth

You want to boost short-term sales

SPIFs (Sales Performance by offering performance-based
Incentive Funds) rewards to meet targets, such as
reducing old inventory.

You want to increase sales, drive

brand awareness, consumer demand,
Trade Promotion Programs
increase market share and improve
retailer performance.

You want to ensure partners are

Enablement and Training knowledgeable about products and
Incentives offerings to meet consumer demands.

usetada.com Loyalty and Incentive Programs 14

 Part 2: The Crucial Role of Channel Partners in Driving FMCG Growth in Asia

Type of Incentive Program To be used if

You want to retain top-performing,

Loyalty Incentives and Partner in-demand partners by rewarding
Retention their loyalty and repeat businesses.

You want to help partners to invest in

Market Development advertising, point-of-sale materials,
Funds to boost product visibility and
engagement.

You want to help partners to invest in

advertising, point-of-sale materials,
Market Development Funds
to boost product visibility and
engagement.

You want to promote mutual invest-

ment in rewards and risks by offering
Co-ops Advertising Programs
funding for advertising and promo-
tional activities

You want to promote mutual invest-

ment in rewards and risks by offering
Special Rewards
funding for advertising and promo-
tional activities

usetada.com Loyalty and Incentive Programs 15

Part 3:
Turning Channel Partners into
Loyal Advocates: A Showcase of
FMCG's Best Loyalty and Incentive
Programs

Loyalty and Incentive Programs

 Part 3: Turning Channel Partners into Loyal Advocates

The FMCG industry in Asia is a challenging and highly competitive field and companies
are always looking for ways to increase sales and market share. One powerful strategy
is to implement a channel incentive program that motivates and rewards channel
partners.

Tada's game-changing solutions have helped many companies to design, implement

and evaluate their own channel incentive programs successfully. Tada's solutions
offer detailed insights and help companies to understand the needs and preferences
of their channel partners and design a program that drives performance and
achieves desired results.

With Tada's solutions, companies can create a program that will help them stand out
from the competition, drive success in their industry and improve their relationship
with their channel partners.

These companies have used Tada's solutions to understand the needs & preferences
of their channel partners and design a program that drives performance and
achieves desired results.

Let’s take a look at how Tada changed the game for these companies.

Investing in trade loyalty isn’t just about

increasing revenue - it’s also about
creating a meaningful relationship
between you and your trade partners.

By offering incentives and rewards

program, you can create a loyalty
program that will cultivate loyalty
amongst your trade partners.
---
Rebecca Agiestha
Co-founder of Tada,
leading loyalty and rewards platform in SEA

usetada.com Loyalty and Incentive Programs 17

 Part 3: Turning Channel Partners into Loyal Advocates

Consumer Goods Case Study

The Brand's Incentive Program Distributes Over

10,000+ Rewards to its Freelance Sales Agents
Data from Jan 2022 - March 2023

Challenges:
Want to automate incentive process to their freelance
sales agent with digital platform that:

Streamline incentive distribution with accurate

and transparent real-time reporting

Maximize campaign impact with effective blast

and promotional tools

Customize rewards catalog to suit member

preferences and drive higher engagement

Boost engagement and sales volume with

integrated gamification features

Solutions:
Tada provides an incentive app with full features, like:

Advanced target & achievement tracking for

the sales agents

Innovative mission activities to activate and

engage the sales agents

A customizable open-loop redemption catalog

with over 1,000 reward options that cater to
individual preferences

An extensive dashboard for reporting, assigning

targets and missions, sending campaigns through
push notifications, Whatsapp blast and more.

Results:

10.000+ 95,26%
redemption transactions sales growth increases
are recorded from Q1 2022 to Q2 2022

usetada.com Loyalty and Incentive Programs 18

 Part 3: Turning Channel Partners into Loyal Advocates

Consumer Goods Case Study

The Brand's Game-Changing Move: Dominating

the Condensed Milk Market through Direct Engagement
with Martabak Sellers
Data from August 2022 - March 2023

The Brand Distributor Retailer Martabak

Sellers

Challenges:
The Brand wants one of their product to be top of mind for
martabak sellers, when it comes to condensed milk products.
The Brand is unable to capture sell-out data for their product.
Difficulties when managing the report because of manually
collecting sales records.

Solutions:
Tada is developing a white-label website to assist the brand in onboarding martabak sellers.
The program will streamline the process & incentivize every purchase of the brand’s product from
registered outlets.

Key features:

Open loop redemption catalog with
more than 1.000 items available
Privileges
Various add-on features to enhance
engagement, data collection and
reward point calculation.
Scan receipt
To eliminates manual work and the
inability to capture transactions from
partners. The Brand can save time
and resources by collecting data
through the scanning of purchase
receipts from Martabak sellers.

Results:

271 7% 2.500+
martabak sellers join average monthly member receipts are scanned
the program growth during the period

usetada.com Loyalty and Incentive Programs 19

 Part 3: Turning Channel Partners into Loyal Advocates

Consumer Goods Case Study

The Brand Launches An Apps to Boost Outlet Sales

with Direct Engagement to the Restaurant’ Staffs
and Managers
Data from August 2022 - March 2023

Challenges:
Cannot capture the sell-out data of their
products/SKUs

Want to boost sales by incentivizing staff and

managers from brand's partner stores,
cafes, and outlets.

Difficulties when managing the partner

database and manually collecting sales
records.

Solutions:
Tada provides the Brand with a highly adaptable
channel incentive program through a mobile
application, designed to motivate outlet managers
and staff to increase the sales of their products.

Loyalty program: Target Achievement feature:

Staffs are required to snap a photo of their The Brand can set product and member
customer's receipt to earn points, which is tier targets to be achieved within a
then validated within the system. specific time period.

Tada provides various redemption items Mission feature:

that allow partners’ staffs to redeem the The Brand can set various challenges or
points for e-wallet top-ups, shopping missions activities to encourage SPGs
vouchers, gadgets, electronics, etc to be more proactive in promoting and
selling the products.

Results:

81.38% Average of 50 12.212

average sales growth new SPG and managers receipts are scanned
on board per month during the period

usetada.com Loyalty and Incentive Programs 20

 Part 3: Turning Channel Partners into Loyal Advocates

Consumer Goods Case Study

Tada's Social Commerce Empowers The Brand to Gain

1,300 New Partners and Remain as a Resilient and
Innovative Brand Amidst the Pandemic
Data from Jan 2021 – March 2022

Challenges:
Want to maintain sales and revenue growth
during the pandemic through new sales channel

The Brandl also want to make sure their professional

partners; salon owners and hairdresser, are staying
in the business even though the shop closed due to
pandemic

Stay relevant in professional hair industry through

digitalization

Solutions:
Tada provides Social Commerce features that benefit
both The Brand and its salon partners, with exciting features such as:

Virtual shop Promos

so their salon partners can sell various
brand’s products with commission for
each product sold with easy link sharing
and tracking
Referral
the salon partners can also recruit other
salon owners or hairdressers to join
the program and become new resellers
like free shipping promo nationwide to
increase end-customers spending
Target & achievement for extra
commissions
Open-loop catalog redemption with more
than 1.000 items to choose to ensure that
there is something to suit everyone's
preferences

Results::

1.300 260% On average,

there are
member growth since
hair salon owner join
the program
The Brand partnered
with Tada
300 orders per month

IMPORTANT

INFO
The program helps The Brand reach untapped potential markets by serving niche user
segments who require unique items that are rarely sold in the general market

usetada.com Loyalty and Incentive Programs 21

 Endnotes

Endnotes

Channel incentives can be a game-changer for any business looking to activate and
engage its channel partners. These incentives can drive volume, build market share,
educate partners, and tap into existing customer relationships.

At Tada, we believe that adopting and perfecting your own channel incentive
program is crucial for business success.

Our game-changing solution can help you set up and run your own program quickly
and seamlessly, providing your business with the benefits and features necessary to
sustain growth in today's competitive market. Start activating, nurturing, and reward-
ing your channel partners and sustain your business today!

usetada.com Loyalty and Incentive Programs 22

 Endnotes

About Tada

Tada is a leading loyalty and rewards platform in Southeast Asia that enables
businesses to efficiently improve channel partner, customer and employee retention,
build loyalty and drive growth. Our unified and game-changing solutions create an
engaging and rewarding ecosystem with a seamless experience for all.

Founded in 2012, recognizing the importance of digital transformation and disruption

in the market. We noticed how businesses began to face challenges in developing
and managing effective loyalty & rewards programs. That's why we built Tada; to help
smart business leaders build more profitable relationships with their channel partners,
customers and employees.

As a home-grown Indonesian Software as a Service (SaaS) company, Tada has a

global footprint, serving over 200 local and global brands with excellence. Our
international recognition and awards demonstrate our commitment to helping smart
business leaders build profitable relationships through loyalty & incentive initiatives.

Trusted by:

Contact us:

usetada.com Tada usetada

usetada.com Loyalty and Incentive Programs 23