Nick Miles, Asia-Pacific Region Manager - AHDB Beef & Lamb · 10% 9% 20% 37% 47% 50% India China Vietnam Philippines Indonesia Malaysia Thailand South Korea Japan Top 10 retailer

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Nick Miles, Asia-Pacific Region Manager

Prepared for:

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Today’s presentation

Summary

Trends in Asian grocery retailing

Asia’s evolving grocery markets

Source: IGD Research

© IGD 2015 Source: theatlantic.com, UN Population, OECD January 2010, USDA economic research service, IGD Datacentre

59.4% of the world’s

population

54% of the global middle class

4.9% forecast GDP

CAGR 2014-20

8.5% grocery market CAGR 2014-20

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Asia’s grocery markets rising up the ranks

Source: IGD Datacentre

9%

12%

1%

7%

5%

9%

14% 14%

5%

9%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

500

1,000

1,500

2,000

2,500

CA

GR

(2

01

4-2

02

0)

Gro

cery

mar

ket

valu

e U

S$b

n

2014 2020 CAGR

2020 Global Market Size

Ranking 29 1 3 6 10 17 20 21 26 27

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Traditional trade will continue to play a strong role

Source: IGD Datacentre, Retailers, IGD Research. Tracked modern retailers only

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Modern trade market size (estimates)

2012 2015F 2020FDense urban populations

Wealth disparity

Personal service

Quality and freshness

Government policy

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1%

5%

6%

8%

7%

18%

34%

44%

45%

1%

6%

7%

10%

9%

20%

37%

47%

50%

India

China

Vietnam

Philippines

Indonesia

Malaysia

Thailand

South Korea

Japan

Top 10 retailer market shares aggregated

2020 2014

Modern trade development varies significantly

Source: IGD Datacentre, Retailers, IGD Research. Tracked modern retailers only

Small number of strong retailers

National retailers dominate

Highly fragmented

© IGD 2015 Source: Datacentre, Retailers, IGD Research. Tracked modern retailers only

Hypermarkets

Supermarkets

Convenience & Forecourt

Discount

Online Grocery

42.1% 42.0%

18.7% 18.4%

38.3% 38.4%

0.4% 0.3%

c. 0.5% c. 1%

2014 channel share

Trend 2020 channel

share

Online and convenience the fastest growth channels

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Domestic and regional retailers lead the way

Source: IGD Datacentre, Walmart sales include Yihaodian of which it currently owns 51% share

4% 4%

11% 11%

4% 4%

8%

2%

8%

1%

6% 7%

9%

14%

8%

13%

9%

5% 6%

2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

CA

GR

20

14

-20

20

Sale

s, U

S$ (

mn

)

Top 20 grocery retailers in Asia in 2020F

2014 2020 CAGR 2014-2020 Retailers with HQ outside Asia

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India

19%

Source: OECD, FAO

Meat consumption continues to grow…

North America

8%

Latam

11%

Europe

3%

Total meat consumption to grow 10% (2014-2020)

Japan

1%

S Korea

9%

China

10%

Oceania

11%

SE Asia

20%

Africa

22%

Asia

13%

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S Korea

11%

Source: OECD, FAO

…and dairy demand will also be dictated by Asia

Total dairy consumption to grow 12% (2014-2020)

Oceania

10%

Latam

13%

North America

12%

Africa

17% SE Asia

19%

China

22%

India

24%

Europe

4%

Japan

2% Asia

21%

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Satisfying the ever more

sophisticated Asian shopper

Communicating quality and provenance

Showcasing product

expertise

Responding to changing lifestyles

Source: IGD Research

Trends influencing your categories

© IGD 2015 Source: IGD Research

Categories delivering a clear point of difference

Wumart, China Casino, Thailand

Yonghui, China Hypercity, India

© IGD 2015 Source: IGD Research

Middle classes demanding more and better products

Wide range – Fairprice, Singapore

Safety and hygiene – Aeon, Malaysia

Health and wellness – Aeon, Malaysia

Premium cuts – City Super, Hong Kong

© IGD 2015 Source: IGD Research

New and exciting products a key feature

Aeon, Japan Walmart, China Aeon, Malaysia

Great, Hong Kong Aeon, Malaysia

© IGD 2015 Source: IGD Research

Provenance and welfare has grown in importance

International – CR Vanguard, China

Welfare – ParknShop, Hong Kong

Natural – Green & Safe, Hong Kong

Traceability – Tesco, Thailand

© IGD 2015 Source: IGD Research

Imagery around the store to show quality

Walmart, China

Walmart, India

Cold Storage, Singapore

Homeplus, South Korea

© IGD 2015 Source: IGD Research

Counters and special features to engage shoppers

Tesco, Malaysia

Ito Yokado, Japan

Great, Hong Kong

RT Mart, China

© IGD 2015 Source: IGD Research

Education and expertise to differentiate

Aeon, Malaysia Aeon, Malaysia

Central Food Hall, Thailand City Super, China

© IGD 2015 Source: IGD Research

Capitalising on changing lifestyles

Convenience – 7-Eleven, Thailand Experiences – Ito Yokado, China

Meal solutions – Big C, Thailand Food Service – Aeon, Malaysia

© IGD 2015 Source: IGD Research

Online and digital becoming more important

Home delivery – City Super, China Innovation – Tops, Thailand

mCommerce – Yihaodian & Tmall, China Digital engagement – Jasons, Hong Kong

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Trends will vary based on market development

Source: IGD Research

Time

Re

tail

con

cen

trat

ion

TRANSACTIONAL COLLABORATIVE

Introductory advice and expertise in-store

Cooking advice

Engaging experiences

Basic range

Digital engagement

New and exciting products Provenance

Engaging displays

HK SINGAPORE

MALAYSIA

CHINA

INDONESIA

VIETNAM

CAMBODIA

TAIWAN

THAILAND PHILIPPINES

Stage 1: Race for space

Stage 2: Process Mode

Stage 3: Sweating the Assets

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• Asia’s grocery market is rapidly evolving

• Fierce competition means that retailers want to differentiate

• New middle class = huge opportunity for growth

• Vary your approach on a market by market level

• Local understanding is key to success

• Transparency and authenticity will become more important

Summary – key points to take away…

Source: IGD Research

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2

3

4

5

6

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