Marketing Week 2009.

1. SE Asian Reaction to The GFC

8. The telling factors… Exports as % of GDP

9. Big variation in proportion of GDP from private consumption

10. Not all stimulus packages are equal Fiscal Stimulus plans of select G20 countries $75 b 38 of GDP United States $31 b 2.5 of GDP Canada $32.87 b 1.3 of GDP France $28.5 b over 1 of GDP Britain $102.4 b 3.25 of GDP Germany $8.85 b 0.4 of GDP Italy $62 b 5.4 of GDP Russia China a $49.28 b 5.7 of GDP South Korea $122.9 b 2 of GDP Japan $33.59 b 2 of GDP Australia $6.1 b 1.3 of GDP Indonesia $4 b 0.4 of GDP India South Africa $30 b (approx.) Argentina $0.43 b 1.5 of GDP Turkey Source - The Standard Thursday 2 nd April ? $585 billion 13.3 of GDP $6 b = 7% of GDP Vietnam

11. Vietnam

12. Vietnam inflation

13. Retail Volume index: Vietnam Total Top 37 Categories Growth % YTD'09 vs. YTD'08 Jun'09 vs. May'09 Jun'09 vs. Jun'08 Total 6 Cities 12.4 -4.2 11.2

14. Top 5 Consumer Concerns 1) Health 2) Increasing Bills 1) Increasing Food Prices 3) Increasing Bills 3) Job Security 4) Work Life Balance 2) Job Security 4) Price Increases in Petrol 5) Debt 5) Children’s Welfare Hanoi HCMC Source : Nielsen Vietnam Omnibus May 2009 $ $

15. Individualism V Collectivism Other peoples opinions do affect my actions and behaviours Hanoians It’s my decision that counts. I use other opinions for reference only Saigonese “ When I came to the store to buy an LCD, I had already decided to buy Samsung brand before going there. I just asked others’ opinions for reassurance’’ “ For example, I want to buy a new TV and if some of my neighbors tell me that the TV is not high quality, then I would be turned off that TV right away” Source : Nielsen Regional Differences Qualitative Study

18. Family recommendation a factor for all, but then much variation on sources Q: How important are each of these groups in making your purchase decisions? * Significantly higher Q 23b: Please rate those statements based on importance (1 to 5).Top 2 Boxes 94% 99% Recommendation from my family members 71% 91% Recommendatios from my friends * 52% 83% Recommendation from colleagues/ partners * 42% 94% Recommendation from my neighbors * Saigonese Hanoians

19. But why? The role of public opinion and social conformity differs between the two cities and seems to influence Hanoians more They don’t just live for themselves and they do care what others think of them. Appearance is key. They feel a responsibility to obey certain standards and disciplines Hanoians They just live for themselves and don’t care “much” about what others think. Saigonese “ When I go out with my friends, I don’t need to wear premium luxurious brands ” “ There’s a saying in the North which is: Tell me what motobike you are riding, then I would tell you who you are” Source : Nielsen Regional Differences Qualitative Study

20. To impact behavior it’s useful to understand the important touch points in each market 6% 23%* Like to watch ads and are affected by them * Significantly higher Q 32: Which statement best describe you? SA Base : All respondents Source : Nielsen Regional Differences Quantitative Study HCMC HN

21. How important are each of these factors in influencing purchase decisions? 41% 91%* Advertising 42% 83%* Newspapers/Magazines 36% 67%* Recommendations from sellers/store owners 22% 95%* Internet/other websites to compare information 22% 100%* Mfr/Distributor/Seller websites and forums * Significantly higher Q 23b: Please rate those statements based on importance (1 to 5). Top 2 Boxes Base : All respondents Source : Nielsen Regional Differences Quantitative Study HCMC HN

22. The role of advertising is more critical in Hanoi I watch advertising and also refer to others ideas to feel assured HCMC HN I like strange, unique and funny advertisements. It makes me laugh, feel happy and attracts my attention Advertisements are really helpful when I need to buy something I have a tendency to love meaningful implied advertisements I feel more comfortable with products which have many advertisements Preference for products will depend on the popularity of it’s advertisement 57% 81%* 44% 75%* 28% 73%* 30% 68%* 19% 49%* 17% 49%* * Significantly higher Q 33: How much would you agree on the following statements? Top 2 Boxes Base : All respondents Source : Nielsen Regional Differences Quantitative Study

23. Promotion strategies need to cater to different consumer preferences Increase volume/ quantity Attached gift Reduce price Reduce price 1 2 3 1 HCMC Saigonese consumers favor various promotion strategies HN Hanoians strongly prefer one type of promotion: PRICE Shampoo Beverage Shampoo Bouillon TV Fridge TV Food Base : All respondents Source: Nielsen Quantitative Study Q 19b: Which promotion program do you prefer the most? Q19c: Which categories would you like this promotion program to be applied?

24. Vietnam

25. What are the top concerns of manufacturers and suppliers? 1) Competitive pressure/ Activity/Growth (40%) 2) Global Economic Crisis (38%) 5) Inflation (24%) 7) Wage Growth (13%) 3) Price increases (37%) 4) Low GDP Growth (33%) 6) Labour force skill shortage (18%) 8) Foreign Investment Slowdown (12%) Source: Nielsen Business Barometer, Feb 2009, Base: All respondents Which of the following issues concern you in terms of the impact they may have on your business? Rank the top three issues that concern you where 1=most concern, 2=second most concern etc. $

27. … but the future feels bright - more optimism among own industry Total Market Your Industry Over the next 6 to 12 months, do you believe that business conditions in the total market & your industry are more likely to improve or deteriorate? 63% 59%

28. Over 70% of Vietnamese in rural; manufacturers are aware of the opportunity In the next 12 – 18 months, to what extent will you look to rural Vietnam areas to drive your company growth? 64% 64%

29. Mixed opinions on how advertising spend will move in next 6 – 12 months. Global or local forces? Over the next 6 to 12 months, how do you anticipate your company's spend on advertising to change? 39% 39%

30. Only 12% of companies plan to reduce staffing numbers Over the next 6 to 12 months, how do you anticipate your company's work force numbers to change ? 88% 91%

31. 57% of manufacturers expecting to grow at a greater rate than industry average Note: IA = Industry Average * Company versus Industry average growth rate (next 12 months)

33. Indonesia

36. FMCG value continues to increase; driven by Modern Trade and Java. Indonesia Total 6.8 4.5 4.3 Ind. MT 12.1 7.2 11.8 Ind. TT (GT) 3.8 2.9 0.1 Java Total 7.8 5.8 6.4 Sumatra Total 3.3 4.7 2.1 O. Island Total 2.1 5.3 -0.1 Total Top 50 Categories , Value: indexed to Average of 200 7 Indonesia Growth (%) Cal. YTD 0 9 Vs Cal. YTD 0 8 May 0 9 Vs Apr 0 9 May 0 9 Vs May 0 8

37. Value grows but many categories seeing volume contraction Value & Volume Growth % - Jan-May09 vs. Jan-May 08 Instant Noodles Powder Milk Branded Coffee Detergent Biscuit SCM Shampoo Toilet Soap Branded Cooking Oil Skincare Source : Retail Index Indonesia

38. Top 10 categories Indonesia Total Grocery – Top 10 FMCG Instant Noodles Powder Milk Branded Coffee Detergent Biscuits SCM Shampoo Toilet soap Branded Cooking oil Skin Care Mini Market Super Hyper Trad. Trade Source : Retail Audit Indonesia Volume Value

40. How does behaviour change when people are challenged economically? Activity LOWER CLASS Change to cheaper brand More Likely Less Likely Change pack size/ Reduce usage Reduce purchase quantity Reduce frequency (luxurious items) MIDDLE CLASS Change to cheaper brand Change pack size/ Reduce usage Reduce purchase quantity Reduce frequency (luxurious items) HIGHER CLASS Change to cheaper brand Change pack size/ Reduce usage Reduce purchase quantity Reduce frequency (luxurious items) Source: Nielsen, Qualitative

41. Indonesia

42. What are the big concerns for industry in Indonesia? Total FMCG Exchange rates Cost of raw materials Government policy / regulation Lifestyle changes among consumers Pressure on trading terms Inflation Political stability Increase in promotional sales & erosion of baseline sales Lack of certainty of enforcement of regulations Economic condition of trading partners Cost Of Raw Materials Exchange Rates Pressure On Trading Terms Lifestyle Changes Among Consumers Increase In Promotional Sales & Erosion Of Baseline Sales Government Policy / Regulation Inflation Political Stability Lack Of Certainty Of Enforcement Of Regulations Retailer Supply Chain Strategies

43. Total FMCG 59% 65% How does business view Indonesian conditions (compared with last year)? Business Conditions in Indonesia (Now vs Year Ago)

44. And bright conditions forecast for Indonesia (Over next 1 – 2 years) Total FMCG 88% 87% Over the next 1 to 2 years, do you believe that business conditions in the total market & your industry are more likely to improve or deteriorate?

45. Revenue growth of 12% + for 59% of companies in 2009 (FMCG 65%) Total FMCG

46. Future View on Rural Indonesia (Next 2 Years : Y2011) Total FMCG 72% 80%

47. Future View for outside Java business (Next 2 Years : Y2011) Total FMCG 83% 91%

48. Production Capacity anticipated to expand in the 2 Years to Y2011) Total FMCG 82% 90%

49. Advertising spend expected to increase in Indonesia in 2010; 79% of FMCG coys Total FMCG 70% 79%

50. 25 top advertising spenders in H1 2009 Indonesia Top 25 Ad Spenders Decreased Ad Spend 6 Increased Ad Spend 19 Volume Positive Growth 14 Negative Growth 5 Positive Growth 2 Negative Growth 4

51. And the majority of companies expect to increase hires in the 2010 year Total FMCG 59% 63%

53. Regional Consumer Sentiment

54. Consumer Confidence Index Q1 ‘09

55. A good time to buy? Q1 ‘09

56. What do people do with spare cash? - South East Asia (Top 5)      National Foods Conference 2009 Indonesia Malaysia Philippines Singapore Thailand Vietnam Putting into savings (67%) Putting into savings (69%) Putting into savings (69%) Putting into savings (75%) Putting into savings (54%) Putting into savings (54%) Investing in shares of stock / mutual funds (44%) Paying off debts/credit cards/loans (41%) New clothes (35%) Holidays/vacations (42%) Holidays/vacation (46%)s Holidays/vacations (27%) New technology products (29%) Holidays/vacations (37%( New technology products (34%) New clothes (28%) Home improvements / decorating (27%) New technology products(25%) Paying off debts/credit cards/loan (29%)s Investing in shares of stock / mutual funds (32%) Paying off debts/credit cards/loans (32%) Paying off debts/credit cards/loans (27%) Retirement fund (27%) New clothes (23%) Holidays/vacation (25%(s New clothes (24%) Holidays/vacations (27%) Investing in shares of stock / mutual funds (26%) New technology products (24%) Home improvements / decorating (23%)

57. Compared to last year, how have consumers adjusted? Q1 ‘09

58. For Vietnam, also less on clothes, upgrading technology and OOH entertainment? Q1 ‘09

59. Moving ahead – what comes next

60. When conditions ‘improve’ consumers in Indonesia will continue to…

61. In Vietnam, when things get better, consumers will continue to …

62. Commonalities

66. Outlook and taking advantage

69. such is life in Asia…. National Foods Conference 2009