Copyright © 2020 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.

THE DELIVERY ECONOMYCOVID AS A CATALYST

Patrick.cua@nielsen.com

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PRE-COVID DELIVERY LIFESTYLE

MEET THE NEW CONSUMER & RETAIL

CRITICAL QUESTIONS TO ASK

AGENDA

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MEGATRENDS SHAPING CONSUMER NEEDS

Urbanization Spending power Young population Shifting demographics

Mobile First

Smaller households Evolving Gender

Roles

TrafficMall

expansion

New economy - Varying time zones and meal times among other family members (e.g. those who work in BPOs, TNVS drivers, online business people)

Online food apps

Well traveled

PRE-COVID

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CONVENIENCE LIFESTYLE WAS THE BUZZ WORDBusier lifestyle are making convenient options very relevant

Apps for everything

Types of services we use

PRE-COVID

Accessibility of store and speed of

service matter

Extended hours of operation

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TRIPS ONLINE & SMALL STORES TOP UP SHOPS

LOYALTY STOCK UPS LARGE STORES

GLOBAL SHIFTS IN GROCERY SHOPPING BEHAVIOR REFLECT NEEDS FOR CONVENIENCE, TECHNOLOGY & CHOICE

FRESH FOODEATING OUT

FOOD & DRINK GROCERY SPENDING

PRE-COVID

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• Eating out spend has risen by 9.5% overall but could be more apparent for ABC

• Demand for wider assortment and reasonably priced RTE offerings

EATING OUT WAS ON THE RISEPRE-COVID

97%-INCIDENCE OF OOH-

-DINING IN PAST 3 MONTHS-

2019 PRIOR TO COVID-19 OUTBREAK

7 outlets-AVERAGE NUMBER OF-EATING-

-OUT-CHANNELS IN PAST 3 MONTHS-

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2019 Foodies syndicated report

PRE-COVID

QSR Delivery

Pizza Delivery

Food Aggregators/Apps

79% awareness34% tried once26% often

Pizza brands60% awareness11% ever tried4% often

89% Aware in MMA19% Ever tried14% often

Delivery Awareness and Usage - Metro Manila

FOOD DELIVERY EVOLVING OVER TIME7 out of 10 patrons choose a restaurant for its Delivery Availability and Speed of Delivery

79%34%26%

Pizza Delivery

60%11%4%

89%19%14%

OFTEN

TRIED

AWARE

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Thresholds are determined by the total number of reported COVID-19 cases, the increase in cases, government and market news including quarantine measures such as school closures, transportation restrictions, commercial closures, health campaigns and reports of death. Last Updated: Tue. Mar. 30, 2020

MAJORITY OF MARKETS STILL IN RESTRICTED LIVING INCLUDING THE PHILIPPINES

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● Heightened health awareness● Focused on quality and safety

assurance● Renewed desire to “Stay at

Home”● Less loyal, more experimental● Tighter budgets for the masses

MEET THE NEW CONSUMER

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Source: Nielsen COVID-19 online study – March 2020

THE NEW CONSUMER:

RENEWED DESIRE TO “STAY AT HOME”

“Given the extended period Asian markets have endured COVID-19 escalation, the prolonged time people have had to spend in their homes in lockdown across a number of markets clearly forcing a rethink in consumer behavior. The desire to spend more time at home appears to be a likely side effect that will extend over time.”

VAUGHAN RYANNielsen Southeast Asia, Managing Director

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● Shoppers will likely buy more per trip● Promote to encourage upsize or multi-pack● Spend less time in store to essential items must

be at key locations in store, higher visibility

IMPLICATIONS:

BASKET TO CART ONE TO MANY SMALL TO BIG

THE NEW CONSUMER:

RENEWED DESIRE TO “STAY AT HOME”

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92%households cooked their meals daily 27% cooked more often

than before ECQ

ONLINE FOOD DELIVERIES

12% households used food delivery apps during ECQ

46% ordered food via apps less than once a week

33% were first time users

1 Grabfood 58%

2 Food Panda 27%

3 Restaurant delivery 21%

4 Facebook 13%

5 Lalafood 11%

Total Household Panel | Total Philippines | Purchase Behaviour Survey: ECQ Edition | April 2020

HOME COOKING WITH OCCASIONAL FOOD DELIVERIES

Top 5 food delivery platforms:

HOME COOKING

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MEET THE NEW RETAIL

• Better FMCG E-commerce adoption and delivery options

• Omni-channel (O2O) emergence• Proximity retailing will rise in

importance• Technology catalysts

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E-COMMERCE

SARI-SARI STORE

MARKET STALL

DRUG STORE

GROCERY / CV

NEIGHBORHOOD STORES & E-COMMERCE TO GROW MORE RELEVANT

►►► DURING

ECQ

SUPERMARKET

►►► NEW

NORMAL

►►► NEW

NORMAL

►►► DURING

ECQ

►►► NEW

NORMAL

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CATALYST FOR FASTER E-COMMERCE GROWTH AND HABIT FORMATION DURING ECQ

17% Claim they have shopped ONLINE MORE

6% Shopped ONLINE for the FIRST TIME

+50% Will CONTINUE to shop ONLINE

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1 Facebook 49%

2 GrabMart 25%

3 LazMart 4%

4 Landers 4%

5 Bayan Mall 4%

Total Household Panel | Total Philippines | Purchase Behaviour Survey: ECQ Edition | April 2020

ONLINE PLATFORMS TAP INTO MORE HOUSEHOLDS

-3%- purchased once

-7%- of Filipino households purchased groceries online

purchased more than twice

-2%-

Top 5 online grocery platforms:

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HOW BRANDS ADJUSTED TO COVID 19FIND WAYS TO GO DIRECT TO CONSUMER

P&G MOBILE MARKET

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GROWTH OF E-PAYMENTS, MOBILE BANKING

BEHAVIOUR CHANGES MAY STICK INTO THE FUTURE CREATING NEW RETAIL

OPPORTUNITIES

NEW CHANNELS: DIRECT TO CONSUMER

SMALL BUSINESSES SELL DIRECT USING FB OR VIBER COMMUNITIES

COVID-19 RESPONSES IN ACTIONLIVE-STREAMING DRIVES

E-COMMERCE

BEHAVIOUR CHANGES MAY STICK INTO THE FUTURE CREATING NEW RETAIL

OPPORTUNITIES

In China, Alibaba’s live-streaming unit, Taobao Live,

has seen rapid growth

TECHNOLOGY CATALYSTS DRIVE BEHAVIOURAL CHANGE

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THE NEW CONSUMER

Greater health awareness

Focus on quality and safety

Desire to “Stay at Home”

Less loyal, more experimental

Tighter budgets

THE NEW BASKET THE NEW RETAIL

Better FMCG E-commerce adoption and delivery options

Omni-channel (O2O) emergence

Continued rise of neighborhood stores

+ Hygiene: rubbing alcohol, household cleaners, air freshener+ Cooking essentials and Shelf stable food- Indulgence OOH beverages and snacks- Non-essential personal care

THE NEW CONSUMER & RETAIL SHAPE THE NEW BASKET

Copyright © 2020 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.

“COVID-NIENCE”CONVENIENCE WITH SAFETY & QUALITY ASSURANCE

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RE-THINKING YOUR BUSINESS MODELSCHALLENGING OUR ASSUMPTIONS

PRE POST

Race to have the most branches Widest coverage with least amount of outlets

Available in most retail stores (quantity) Available in the right stores (quality)

Delivering to retail warehouses and outlets Direct to customers

Customer experience in store Customer experience in home

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CRITICAL QUESTIONS TO ASK

1. What are my Core Competencies and Sources of Competitive Advantage?

2. What new activity systems do I need to have?3. What new skills will I or my workforce?4. Do I build or partner?

23

“IT IS NOT THE STRONGEST OF THE SPECIES THAT SURVIVE, NOR THE MOST INTELLIGENT, BUT THE ONE MOST RESPONSIVE TO CHANGE.”CHARLES DARWIN

This artwork was created using Nielsen data.Copyright © 2020 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.

SHAPING A SMARTER MARKET™