ASEANs limited time offer:

One hundred million new consumers

to win and a $770 billion reason to
move now.

Contents

Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03
Sizing and Seizing $770 Billion in New Money. . . . . . . . . . 05
Dispersed, Dynamic and Competitive. . . . . . . . . . . . . . . . . . . 11
Strategies for Success. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Executive Summary
One hundred million new ASEAN consumers will add $770 billion in new
spending to the economy over the next few years. Those consumers are
choosing brands and products right now and their loyalty could last a lifetime.
Companies that act fast will elevate growth and lock in a sustainable advantage.

ASEAN markets are changing quickly. Consider

that by 2020 just five years from now
ASEAN1 will have a $3 trillion economy
and a population of close to 600 million
people.2 3 Consumer spending is expected
to double to $2.3 trillion a year, with over
$770 billion of new money coming from
the nearly 100 million people joining the
consuming class for the first time or moving
into more affluent consumer segments.4
This is one of the largest opportunities on
the planet, making ASEAN the must-win
battleground for global CPG companies. Over
the next few years alone, the industry is
expected to grow by 9 percent annually and
will be worth $220 billion in 2017.5 The ASEAN
Economic Community (AEC), due to come into
effect at the end of 2015, will further enhance
the regions appeal as one of the worlds
most attractive consumer markets by making
it easier to do business across its borders.
Our advice to companies can be distilled in
four words: be aggressive, and move now.
To gain insights into the opportunities,
Accenture conducted in-depth research and
surveyed 1,800 consumers across Indonesia,
Malaysia, the Philippines, Singapore, Thailand
and Vietnam. We found that while CPG
companies have a singular opportunity to
turn millions of new ASEAN consumers into
loyal customers over the next few years,
they must also overcome several obstacles.

Accenture sees three major challenges to

winning in the rapidly evolving ASEAN market.
The first is finding and reaching these new
consumers in a highly fragmented landscape
characterized by capital cities and emerging
urban areas, multi-tiered distribution systems
with minimal reliable data to guide market
entry, and a diverse range of cultures.
The second is winning and maintaining
customer loyalty. Accenture research
also shows only 34 percent of ASEAN
consumers are loyal to specific brands.
Thus there is the potential for a consumer
to switch to a competitors product in
two-thirds of all purchase situations.
The last challenge is standing out among
ever fiercer competition. Local brands have
the advantage of understanding and serving
ASEAN segments, and are planning to
leverage the ASEAN economic integration
to expand in the region. In addition, both
existing ASEAN-based multinationals and
global CPG leaders have been expanding
their regional footprints, ratcheting up the
competition for share of consumer wallets.
How do you succeed in this must-win
consumer market? The ASEAN market is as
complex as it is promising, making it difficult
to prioritize possible tactics. We propose three
areas of focus: locking in the new consumer,
ensuring product availability is only fingertips
away, and putting in place the operating
model to execute with agility and speed.
Creating awareness of your product and
locking in future demand by building
loyalty requires engaging the new
consumer early, often and with precision.
Gaining deep customer insight through
the use of digital technology and
analytics will be critical to success.

Ensuring availability is only fingertips away

means getting supply right and making your
product available everywhere a consumer
is. This will require improving salesforce
reach and productivity as well as superb
logistics management to ensure coverage
across complex, multi-layered distribution
channels. It will almost certainly require
strategic partnering in local markets.
Building an effective operating model
tailored to ASEAN will deliver advantages
that impact both consumer reach and
product availability. This operating
model will need to be regional to
benefit from scale efficiencies and
critical mass while also reflecting
distinctive local insights and action.
Innovation is required across all of these
levers given the unique nature of ASEAN.
Companies that demonstrate the flexibility
to rethink demand generation, supply chain
management and operating models will win
market share, and capture once-in-a-lifetime
consumer and revenue opportunities.
To make the most of this moment,
companies must get smarter about
ASEAN consumers current and new
and quickly. The leading companies that
reach and connect with consumers before
competitors will earn their attention and
a chance at winning their loyalty.

The ASEAN opportunity

ASEAN by 2020

$3

TRILLION
USD ECONOMY

6th

LARGEST ECONOMY
WORLDWIDE

580
+50%
2.3
x2

A once-in-a-lifetime
opportunity to win loyalty
in new growth areas.

60 million
NEW CONSUMERS

ABLE TO PURCHASE ITEMS

BEYOND THEIR SUBSISTENCE
FOR FIRST TIME

MILLION PEOPLE
LIVING IN CITIES

37 million
NEWLY AFFLUENT
TRILLION USD ANNUAL
CONSUMER SPENDING

MOVING TO HIGHER-INCOME
TIERS AND EXPANDING ACCESS
TO PREMIUM PRODUCT CATEGORIES.

CONSUMER SPENDING TO
DOUBLE BY END DECADE

$770 BILLION IN NEW SPEND

GREATER NUMBERS OF WEALTHIER

CONSUMERS EMERGING IN

NEW TARGET CITIES

OUTSIDE ASEANS TIER 1 CITIES

Sources: Accenture analysis based on data from Euromonitor International 2013 and Global Insights 2013

Sizing and seizing a $770 billion opportunity

With so many of the worlds economies characterized by slow growth, ASEAN represents
one of the largest opportunities today for CPG companies. Robust consumption is driven
by favourable demographics, rising incomes, rapid urbanization and ongoing economic
growth across the region.
Promising macro-economic
and demographic trends
Across ASEAN consumer spending is
expected to nearly double to $2.3 trillion
by 2020 (see Figure 1). Growth will be
highest in Vietnam and in the Philippines,
while Indonesia will remain the largest
market with total forecasted consumer
spending of over $800 billion.

Few standalone mature markets, can match

the opportunity ASEAN represents for CPG
companies. By 2017, ASEANs consumer
goods market will be worth more than $220
billion, underpinned by demand for packaged
food and beverages, tobacco, and home
and personal care products (see Figure 2).
For the first time, tens of millions of
entrants to the emerging middle class will
have disposable income, while wealthier
consumers will be able to trade up to premium

or luxury products that offer benefits in

terms of convenience, status and quality.
For example, the skin care category in ASEAN
is growing much faster in dollar value than in
units, reflecting consumers interest in buying
better, premium products. Similarly, higher
growth in frozen processed food and readyto-eat meals reflects a shift by consumers
who are opting for convenience products.

Figure 1: Consumer spending growth in ASEAN, 20122020 (USD billion)

84%

$1236
$2271
ASEAN

6.9%

7.5%

8.6%

$375

$363

7.6%

14.0%

6.1%

$822

$481

$290
$210

$188

$246

$161

$110

$86
Indonesia
2012

Thailand
2020F

Philippines

Malaysia

CAGR

Vietnam

$176

Singapore

Source: Accenture analysis based on data from Euromonitor International, 2013.

Figure 2: Growth of the ASEAN consumer goods market (USD billion)

54%

$146
$226
Total

10%

10%

8%

9%

7%

6%

9%

$95

$60
$50

$30

$27
$18

Packaged Food
2012

Tobacco
2017F

Soft Drinks
CAGR

$23
$15
Beauty &
Personal Care

$14

$19

Alcoholic Drinks

$5

$7

Home Care

$3

$5

Tissues & Hygiene

Source: Accenture analysis based on data from Euromonitor International, 2013.

$770 billion in additional

consumer spending up for grabs
Consumers in ASEAN are on the move at
least financially (see Figure 3). By 2020,
nearly 100 million consumers will either
enter the ranks of ASEANs consuming class
(about 60 million) or become more affluent
(37 million). These changes will expand the
regions consuming class to 177 million people
with spending power of $1.5 trillion. The
collective buying power of the consuming
class will drive 80 percent of spending.
Two waves of consumer spending growth
are expected to inject $770B a year of
incremental sales into the market by 2020.

Over the next five years, the change in

ASEANs consuming class will be tremendous.
There will be first-time entrants as well
as consumers who become more affluent
and graduate into higher income tiers.

income grows, many of these consumers

will upgrade to premium products. So each
income segment is experiencing both rapid
growth and significant turnover, creating
new opportunity for savvy CPG companies.

There are many scenarios that could be run to

predict the shifts in incoming and upgrading
and consumers. The most conservative scenario
is where all new consumers directly join the
consuming class at the entry levels. Based
on analysis of working population growth
and shrinkage in low income segments, we
estimate that 37 million new consumers will
become employed or move from subsistence
levels and enter the Common Mass segment,
while another 23 million will enter directly
into the Mass segment. These 60 million
new entrants to the consuming class with
a potential spending pool of $278 billion
represent new territory and first time
buyers for CPG companies to win over.

In the Mass segment alone, for example,

more than 10 million consumers will move
up. Close to 20 percent of current consumers
will become more affluent and will be looking
to upgrade to more premium categories.
At the same time, the Mass segment will
continue to expand at a quick pace with more
than 47 million new entrants, representing
50% of the total consumers in 2020.

At the same time, ASEAN will see a wave of 37

million consumers growing their incomes and
graduating into higher customer segments.
The increasing wealth of those already in
the consuming class and moving up creates
an interesting dynamic. As their disposable

This pace of financial mobility and change

in ASEAN is rapid, taking place in less
than a generation. Accordingly, the region
requires quicker adjustments and more
sophisticated responses than some CPG
companies are accustomed to making. CPG
companies need new strategies to attract,
engage and maintain the loyalty of the 100
million new and upgrading consumers who
collectively present a $770B opportunity.

Figure 3: Growth in ASEANs consuming class (population, million)

Consuming class

Segment

Avg annual
income (USD)

Affluent

> $50,000

Upper mass

$15,000 - $50,000

Mass

$5,000 - $15,000

Common Mass

$3,500 - $5,000

Population
(million)

2.7
4.4
1.7
12 10 22
59

36

42

14 56
116

Total
Potential additional
spending pool (USD billion)
2012
Source: Accenture analysis based on data from Euromonitor International, 2013.

95

61

177

New
consumers (M)*

Upgrading
consumers (M)*

Change

63%

11

82%

23

24

61%

37

33%

60

37

53%

278

493

2020 Forecast Growth

*Scenario-based.

Who are these new

consumers, and what
matters to them both
today and tomorrow?
What emerging needs do
CPG companies satisfy to
cement their relationship
with this new population?
Answering those questions
and winning the loyalty of
new consumers requires
looking at three distinct
pockets of growth across
ASEAN: new consumers,
the newly affluent classes,
and new opportunities
outside of capital cities.

1. New consumers

3. New target cities

Equipped with disposable income for the

first time, these consumers will be able to
purchase items beyond their subsistence
needs. As noted previously, in a scenario
where the majority of new entrants to the
consuming class come in at the lower levels
of income before moving up, we expect to
see the Common Mass and Mass segments
to grow by 60 million people by 2020. This
growth will be bolstered by rapid urbanization
and the push by ASEAN governments
to introduce minimum wage levels.

In the near future, greater numbers of

wealthier consumers as well as new consumers
will reside outside ASEANs Tier 1 cities. New
consumers with low-skilled jobs may live on
the fringes of Tier 1 cities such as Bangkok
or Jakarta, traditional economic centers.
However, by 2020, due to population growth,
consumers in provinces such as Java Barat,
Java Timur, Banten, Riau, Sumatra Selatan
and Jambi might account for more than 60
percent of Indonesias commodity spending.6

These new consumers will have incomes

above $3,500 and their first experience
with technology is likely to be with a mobile
phone rather than a computer. They will
also generally shop at traditional grocers
close to home and pick up basic consumer
goods that fit within their budgets.

2. New affluence
Increasing wealth across ASEAN is creating
the newly affluent consumer segment.
As stated earlier, an estimated 40 million
people will move to higher income tiers
by 2020, which will enhance their ability
to purchase premium products.
These consumers have high expectations for
product quality and convenience. They are
also highly diverse, with different preferences.
One example is the value seeker consumer
who earns between $5,000 and $15,000, and
aims to better themselves and their families
through education and skilled jobs. While
they tend to spend conservatively, these
consumers also want affordable luxuries.
Even within the middle class tier, subgroupings are quickly evolving. For example,
across the region there are growing pools of
wealthy retirees, urban dwellers that desire
more convenience and lifestyle products
that fit their fast-paced work and leisure
lives, as well as young working adults
with a taste for high-quality and trendy
products. All these segments will need to
be understood and specifically catered to
with targeted products and campaigns.

Similar patterns are seen in Thailand,7

where the government is taking an active
role in expanding opportunities and growth
outside the Greater Bangkok area through
the development of gateway cities such
as Chiang Rai, Tak, Sa Kaeo and Songkhla.
In the Philippines, continued expansion of
the IT business process outsourcing (IT-BPO)
industry is fuelling job creation and higher
incomes among the Next Wave Cities (NWC)
of Baguio, Davao, Laguna and Naga.8

These consumers represent vast opportunities

for CPG companies, as dispersed and
diverse as they are exciting. Capturing a
piece of the burgeoning multibillion-dollar
market will require companies to think
about gaining an in-depth understanding
of the new demographics and consumer
mindsets, as well as consider how to
structure their supply chains and operating
models to reach the new geographies.

10

Dispersed, Dynamic and Competitive

CPG companies seeking a stronger foothold in the ASEAN region face distinct challenges,
from delivering products across a physically fragmented landscape, to winning the loyalty
of rapidly changing consumers. Added to these factors, companies need to distinguish
their brands and products in a highly competitive and diversified environment. All in all,
succeeding in the region will require new approaches to clear these hurdles.
Delivering products across the
physical diaspora
The route-to-market design required to
address the geographic structure of ASEAN
and its physical layout make it challenging to
reach consumers efficiently. CPG companies
must build distribution ecosystems of partners
of vastly different sizes and maturity to
reach and build a loyal following. Tier 1
cities have networks of retail outlets, knit
together by convenience stores, supermarkets
and hypermarkets. The strength of each
format differs by market and each tends to
be dominated by large domestic players.
As these retailers expand aggressively,
CPG companies will need to keep pace and
maintain control over in-store execution,
even as their ability to do so is often
hindered by limited access to retailer data.
Outside Tier 1 cities, the network looks very
different and is dominated by small traditional
retailers. In fact, 75% of all grocery sales
in ASEAN take place through the 5 million
small mom and pop operators across the
region.9 This fragmentation forces CPG
companies to develop and manage multilayered distribution networks that cover
all stores to ensure products reach target
consumers. Reaching consumers who live
beyond Tier 1 city borders is possible but
requires a complex system of direct deliveries,
distributors, sub-distributors and wholesale
outlets. Most of these distributors are
home-grown businesses and lack the ability
to effectively track transactions. This lack of
visibility can lead to stockouts and with it
the sales and consumer connection desired.
Making efficient distribution even more
difficult is the relatively poor state of transport
infrastructure outside key cities. Moving
goods across more than 25,000 islands within
the Indonesian and Philippine archipelagos,
for instance, can be particularly costly. Few
islands have deep ports that can host large
container ships, so goods need to shift among

11

several transport modes ships and trucks

of all sizes before reaching their ultimate
point of sale destination. In fact, the Indonesia
Port Corporation II reported that the cost of
shipping one 20 foot container from Jakarta
to Hamburg, Germany (11,000 km) is less than
shipping from Jakarta to Padang (1,000km).10
And Jakarta is one port on just one of the
17,000 islands that CPG companies will need
to navigate to reach Indonesias consumer.
The need to select, test and maintain vast,
multi-modal distribution networks is one
reason why CPG companies have no time to
waste if they are to capture the opportunity
presented by ASEANs new consumer classes.

In fact, 75% of all grocery sales

in ASEAN take place through the
5 million small mom and pop
operators across the region.

Reaching and winning the loyalty

of rapidly changing consumers
In ASEAN, increasing disposable incomes and
the rise of digital channels are contributing
to the emergence of new consumer behaviors
and expectations, including a growing
tendency to switch brands and products.
According to our recent survey of ASEAN
consumers, only 34 percent are loyal to
specific brands, meaning two-thirds of all
consumers are ready to switch to new brands
that promise a better customer experience.
In addition, Accenture found that more
than 70 percent of consumers expected
more from companies compared with a year
earlier, and 80 percent said they evaluated
brands more closely than ever before.11
One factor underpinning changing consumer
expectations and the quest for a more personal
customer experience is the dramatic rise of
digital especially mobile communications.
ASEANs consumers are highly connected.

Smart phones are pervasive across the

region, and in rural and regional locations
the mobile phone is the preferred platform
for communication, given the lag in fixedline telecommunications infrastructure. The
hunger for digital interaction, including social
media, has grown dramatically. Bangkok and
Jakarta are home to some of the most active
Facebook users in the world.12 Across ASEAN,
consumers are relying on digital technologies
at all stages of the purchasing process, which
has evolved from a fairly predictable linear
journey into a dynamic and continuous loop
with evaluation and re-evaluation of products
and offers at the center (see Figure 4).
Because consumer communication is fluid
and continuous, CPG firms must go beyond
traditional media channels to engage
consumers and sustain their interest they
are simply not dynamic enough. After word of
mouth, Accenture found that online sources
are the most important for consumers seeking
product information with print or TV
advertising lagging substantially. Companies
will need to refine their media strategies and
lead with a digital first orientation to win the
attention of ASEANs demanding consumers.

Across ASEAN, consumers are

relying on digital technologies at all
stages of the purchasing process,
which has evolved from a fairly
predictable linear journey into a
dynamic and continuous loop with
evaluation and re-evaluation of
products and offers at the center.

Figure 4: The digital consumer experience in ASEAN

96% of consumers are using
online channels to learn about
products & services

43% are more likely to do

business with a company that
they know they can interact with
in a social media environment

77% say online channels offer

more convenience and choice

Expectation
Promise

Evaluate

sid

41% would post negative

comments online after a
negative experience

Reality
Delivery

Co

65% of them access these

sites at least half of the time,
through their mobile phone or
tablet device

Purcha
se

er
cov
Dis

er

64% read online reviews and

comments from other consumers

se

More than half of them consider

expert review sites, social media
sites and corporate websites as
important as word of mouth

86% of consumers in ASEAN use

at least one online channel for
service requests website, mobile,
online forum and text chat
Two-thirds tend to access these sites
at least half of the time, through
their mobile phone or tablet device

More than a third say they

get influenced by them
Source: Accenture Engaging the Nonstop-Customer Study, 1,859 consumers in ASEAN were surveyed via the Internet in July 2013

Fierce competition to win in a

vast and vastly diverse region
Competition comes from all directions in
ASEAN. Local brands remain strong and usually
rank in the top five in most food and beverage
product categories.13 Over the past five years,
these companies have leveraged their inherent
advantage of being locally recognized to
expand aggressively beyond their traditional
market and country borders, contributing to
27 percent of total inbound investments into
ASEAN.14 Accentures 2014 study of 200 large
local businesses on the implications of AEC
revealed that most planned to expand into one
more ASEAN country in the next three years.
Not to be out-manoeuvred and facing slowing
markets at home, foreign multinationals are
flexing their muscles as well. Total inbound
investment for the CPG and retail industries
has grown 78 percent15 over the last 5 years.16
AEON, the Japanese retailer, has aggressive
expansion plans in ASEAN. It currently has
a presence in eight out of ten countries in
ASEAN and plans to invest close to 300 billion

yen between fiscal 2014 and 2016 to open 150

stores, including small supermarkets.17 Many
multinationals have followed the if you cant
beat them, join them theory, with merger
and acquisition activity intensifying recently,
particularly from Japanese multinationals. In
2014, Japans Asahi Group acquired Malaysias
Etika Dairies Sdn Bhd for $329 million to
further expand its operations in the region.18
Whether growth comes from M&A activity
or organically, all CPG companies targeting
ASEAN must navigate both the fragmented
geographic landscape and highly diverse
cultural and business environments. The
ASEAN region comprises 10 individual markets
of varying sizes, incomes and maturity
represented on either end of the spectrum
by Singapore and Myanmar, as well as a
broad range of languages and cultures.
Companies need scale to improve efficiency
and operating margins, but some may find it
challenging to serve the melange of global,
regional and local requirements: the systems
designed for a Western, mass distribution
infrastructure will not work in ASEAN. The

region requires approaches that reflect the

state of emerging markets infrastructure
and their reliance on smaller scale, highly
manual, traditional distribution outlets.

In summary, ASEANs fragmented, dynamic

and competitive consumer market presents
both significant challenges and enormous
opportunity for CPG companies. Developing
and executing winning strategies will take
time, and a period of trial and error to
fine-tune. As discussed next, companies
need to invest now to lead in the future.

Whether growth comes from

M&A activity or organically,
all CPG companies targeting
ASEAN must navigate both the
fragmented geographic landscape
and highly diverse cultural
and business environments.

12

Strategies for Success

The first steps to tap into the full potential of ASEAN markets will require locking in
demand, ensuring supply reaches consumers across the regions markets, and putting
the right supporting operating model in place.
1. Lock in demand from new and
more affluent consumers
Succeeding in local markets will require that
companies find emerging and upgrading
consumers, understand them, and connect with
them by delivering messages and products that
speak directly to their needs and aspirations.

Move fast, spot trends and

act on opportunities first
Successful companies will match their
pace of business to the velocity of change
in ASEANs consumer landscape. New
consumers, growing affluence and new
areas of geographic growth mean that many
companies will need to invest in identifying
key consumer communities, spotting
trends and capitalizing on opportunities.
Accomplishing these goals depends upon
building a sophisticated understanding of
local markets to generate valuable insights.
Developing local teams, harnessing their
workforces (including sales agents) and using
digital channels to gain insights across the
region, including outside major cities will
help companies deliver relevant product
and service offers in near real-time.
Some companies have these building blocks in
place already. To learn more about the targeted
Malaysian man, for example, and identify their
purchase intent, Unilever created the MSN
Locker Room, a digital male hangout space
for men aged 1834. In just eight months, an
estimated 800,000 Malaysian men visited the
virtual space, surpassing user targets by 450
percent. The site continues to grow, resulting
in double-digit growth in brand consideration
and awareness for all its brands.19

Speak directly to consumers

and to their needs
Once companies identify the consumer
segments to target, they will need to craft
targeted and tailored messages in individual
markets across the region to ensure they
remain relevant to consumers. Moreover, they
will need to find ways, as Unilever has done,

13

to deliver those messages directly to each

consumer. Creating different products as well
as varying pricing, packaging, branding and
messaging will also increase brand relevance
and expand reach to different consumers.
The efforts of the Indian conglomerate
Godrej show the impact of this precision
targeting. The company created a new product
specifically for Indonesias low-income
population. The companys paper-based
mosquito repellent uses no electricity, is
smoke-free and is attractively priced. Despite
being cheaper, the product enjoys higher gross
margins than similar competitor offerings
and has room to grow through adoption
by non-users.20 A little customization is
resulting in large business gains from what
is typically cast as a commodity product.

Engage consumers through

digital channels
As ASEAN consumers become more affluent,
their expectations rise even faster than their
incomes. With high levels of mobile adoption,
consumers have integrated digital devices and
content into their lives and online channels
into their purchasing. The combination of
affluence, expectations and digitization makes
them receptive to new brands that cut through
the noise with a stronger value proposition.
Half of ASEAN consumers are already
interacting with companies on social media.21
Mobile and social media must be integral
to any engagement strategy from the start
to drive awareness, stimulate trials, and
create relevant and valuable interactions
that build brand loyalty. In Malaysia, Oreo
created an integrated campaign leveraging
both online and offline channels to reinforce
its brand awareness and positioning for its
centennial anniversary. The campaign had
extensive outreach on social media across
Facebook, Twitter and Pinterest, drawing
thousands to share their thoughts and
reminisce about Oreo moments. As a result,
the company earned the title of Most
Admired Brand by BrandLaureate and grew
sales by 10% during the campaign period.22

Messaging apps are increasingly being used

to reach consumers in ASEAN. In Thailand,
LOreal took an innovative approach to
release a new product line for its Maybelline
brand by partnering with the South Korean
mobile chat app Line. Line is used by 25%
of the Thai population (20 million users)
for flash sales. Within five minutes of
LOreals announcement of a Maybellinefocused flash sale, more than 500 units
of the new lipstick products sold out.23

Loyalty is won both in small battles and

over the course of a never-ending war
for consumers attention and interest.
Harnessing the power of digital technology,
CPG companies have an unprecedented
opportunity to turn these changing consumer
behaviours to their advantage, build loyalty
and lock in demand. Companies that build the
capabilities to learn about and reach ASEANs
diverse consumers are better positioned to
win both a majority of battles and the war.

Thanks to ASEANs high mobile

penetration rates and advanced
social media adoption, CPG
companies have the opportunity
to identify, understand and reach
100 million new target customers
individually and at unprecedented
speed. Who will be first in the
race to win their loyalty?

14

2. Ensure supply is only a

fingertip away
Getting and keeping your product on
the shelf is highly dependent upon the
right relationships with reliable retailers,
distributors and wholesalers. ASEAN is
not only fragmented geographically, it is
large. Consider that the area covering the
West Papua region in Indonesia is over a
400,000 square kilometres, the same size
as Sweden. And that is just a fragment of
one of the 10 markets within ASEAN. Smart
CPG companies need a network to reach all
markets, whatever their shape and size.

Invest in relationships
The key to faster growth is to take a more
collaborative approach with a broad and
deep network of partners. This network will
allow companies to extend their reach in both
traditional and modern trade outlets, improve
their demand planning with greater visibility,
and minimize risk when entering new markets.
Improving accessibility to markets and product
availability will require that companies invest
in joint strategies with key distributors.
In Vietnam, the Japanese retailer AEON is
partnering with the local retailers Fivimart and
Citimart to sell its private brand of foods and
daily necessities under the Topvalu label. The
partnership will result in product availability
in more than 40 retail outlets in Vietnam.24
One goal of the strategy will be to coordinate
demand forecasting in partnership with
distributors to ensure product availability in
traditional trade. Strategies such as having
joint incentives will align execution so
that products get to the right place the
proverbial last mile at the right time.
More importantly, with 75% of spend going
through the close to 5 million mom and
pop operators across ASEAN, effective
management of traditional trade distribution

15

is essential. Launching distribution

development programs to educate and equip
distributors with new technologies and to
support adoption of innovative approaches
to salesforce automation and management
will be necessary. For example, sales force
automation tools accessed via mobile devices
can deliver in-field scripts proven to support
sales execution. These tools also improve
route optimization and provide inventory
visibility to ensure all stores are covered
and shelves are well stocked at all times.

on-shelf availability. Companies that use a

strong category captain role, for example,
to attract and support retail partners will be
rewarded. One French food conglomerate was
well positioned for such a role given its market
leadership in baby food. The firm partnered
with Alfamart, Indonesias leading minimarket
chain, as the retailer expanded its presence
across the country. By using its strong
shopper and category insights, the company
provided space management support across
Alfamarts 15,000 new outlets in Indonesia.

One major global consumer products company

increased sales, boosted customer numbers
and improved the productivity and efficacy
of its regional sales network by deploying
a digital distribution management system
and salesforce automation tool to local
distributors. The company had a presence in
six countries, but most of its systems were
localized, resulting in inconsistent processes
and data. To spur growth in ASEAN, it
implemented standardized systems across
its footprint, which allowed it to improve
customer services, increase sales calls and
sales volume, reduce office administrative cost
and enhance planning and decision-making.

Further, companies should determine

how point-of-sale data can be collected,
analysed and shared to improve their sales
visibility at store level. One option is to buy
point-of-sale data from retailers and equip
distributors with the right technology to
improve visibility of sales and inventory
levels. These retail insights can help increase
the effectiveness of consumer promotions,
reduce trade spend through trade promotion
optimization and the data can be shared
with retailers to jointly increase sales.

The key to faster growth is to take

a more collaborative approach
with a broad and deep network
of partners. This network will
allow companies to extend
their reach in both traditional
and modern trade outlets.
Optimize in-store execution
Once your product gets to a retail outlet,
in-store execution is the critical last step to
drive purchases. Companies need to align sales
and supply chain capabilities as well as work
with local ASEAN retailers to jointly enhance

Use analytics to predict demand and

plan supply
Around the world CPG companies are using
big data analytics to understand consumer
segments and buying habits, optimize
on-shelf availability and generate logistics
efficiencies. However, data availability
and quality can be an issue in ASEAN.
Many firms struggle to extract relevant
and timely sales data from retailers and
distributors. Their internal operations and
supply chains are hampered by siloed
systems and they have yet to find systematic
ways to generate consumer insights.
To address this issue, some companies are
exploring ways to create or identify new
data sources to meet strategic business
objectives ahead of the competition. Gaining
actionable consumer insights depends upon

using a mix of mobile couponing, social

media, online communities and in-store
campaigns, among other tactics. For example,
Procter & Gamble used tablet computers for
an in-store marketing campaign to build a
database of shoppers in the Philippines, and
the consumer data can be segmented by store
type to run targeted campaigns in the future.25
Results were stunning, and characterized by
an industry analyst as possibly the largest
one-to-one, direct-to-consumer, in-store
marketing program in the country, with more
than 780,000 shoppers reached monthly.
P&G reportedly recorded a 32% increase
in basket size over one month due to the
regimen-selling promoted by the app.
Overall, the companies that will win more
will develop tools that generate an end-toend view of product and sales data for their
business and their wider business ecosystem.
This requires a data management system
and supporting analytic solutions designed
with these specific business objectives in
mind. This capability will enable quick access
to and automation of data across the value
chain from suppliers, retailers and consumers
and equally quick analysis by internal
teams to generate actionable insights.

Gaining actionable consumer

insights depends upon using a mix
of mobile couponing, social media,
online communities and in-store
campaigns, among other tactics.

3. Build an operating model that

balances regional efficiency with
local agility and insight
A winning ASEAN consumer products
strategy also relies upon an operating
model that both drives scale and efficiencies
and maximizes agility and local insights.
Leading CPG companies will recalibrate
these complementary components as
their reach in ASEAN expands.

Adopt a regional model focusing on

capability and value
Traditionally, many consumer packaged
goods companies have operated in ASEAN
using a country-by-country approach an
expensive undertaking. Fortunately, barriers
to cross-border trade and tariff reductions
within the ASEAN Economic Community will
be reduced in the coming years, improving
both access to consumer markets and the
ability of companies to move to a regional
model across ASEAN. In addition, economic
integration will open up access to a broader
range of raw material suppliers and increase
the viability of lower-cost manufacturing
locations. Leveraging a regional model allows
companies to serve the disparate ASEAN
markets more efficiently. In total, the costs of
doing business in the region should decrease
as companies consolidate manufacturing,
build more efficient distribution networks,
and tap into a broader range of talent.
Companies are already building ASEANcentric manufacturing strategies to take
advantage of the regions opportunities. New
Zealands Fonterra sells 40 percent of its
global ingredients in ASEAN markets. Because
Fonterra Brands Indonesia projects local
demand to increase at five percent a year, it
is constructing its first blending and packing
facility in West Java to enable it to better
meet growing customer demand and expand
local capabilities.26 Similarly, in Malaysia,
Kellogg is investing over US$130 million in
a regional snacks manufacturing hub. This
new production center, targeted to be open
in mid-2015, will produce halal-certified
goods for ASEAN as well as better position
Kellogg to serve the broader Asian market.27

Companies investing in regional technology

capabilities can develop efficiencies across
local markets. In Indonesia, Coca Cola Amatil
made significant investments in technology to
drive growth and improve in-field execution.
They are investing across the supply chain
using geo-positioning technology for route
planning, delivery confirmations and asset
tracking; deploying iPad platforms that
integrate analytics data and field service
support scheduling to support sales; and
leveraging technology to support outlets, such
as digital photo recognition of cooler stock
to better connect the field to call center and
increase the efficiency of call center support.28
With the projected pace of growth,
Accentures AEC study revealed that there
is a growing concern that the demand for
highly-skilled talent in parts of ASEAN, is
outstripping supply. To address this, regional
centers of excellence are being developed by
savvy companies to ensure a stream of talent
will fill talent gaps and improve capabilities
of local teams. At least two firms are already
well down this path. In 2013, Diageo opened
its Asia Pacific Technical Center in Singapore.
The center enhances packaging development
capabilities in Asia and supports new brand
innovation initiatives to meet ASEANs growing
demand for premium brands.29 Similarly,
Unilever opened its second global leadership
development campus; Four Acres Singapore
in 2013.The facility will help increase
the supply of talented leaders in Asia.30
A number of other companies are studying this
approach closely to meet this growing need.

Barriers to cross-border trade

and tariff reductions within the
ASEAN Economic Community
will be reduced in the coming
years, improving both access
to consumer markets and the
ability of companies to move to
a regional model across ASEAN.

16

Conclusion
The ASEAN region is growing faster than any other market,
and represents a $770 billion per year prize for growthseeking companies. CPG companies will need to move
quickly to seize the enormous business opportunities
arising from the nearly 100 million new and more affluent
consumers who will inject more disposable income in the
regions economy every year. Winning their loyalty demands
fast execution of a clear plan while having the flexibility to
contend with the regions enormous diversity, fragmented
geography, and rapidly changing consumer behaviour.
All firms will face competition that is
intensifying by the quarter; both MNCs and
local companies will need to continually
invest in the right strategies, capabilities
and mindsets to expand their presence and
consumer engagement in the region.
As discussed, a preliminary roadmap
for CPG companies includes:
Taking action to gain customer insights and
contact that will enhance the customer
reach, experience and loyalty, thereby
locking them in before competitors
Ensuring the availability at every fingertip
and the smooth flow of goods through
the supply chain, increasingly by using
salesforce automation tools and logistics
optimization with an extensive network
of supply and distribution partners,
Adopting an operating model that effectively
balances regional efficiency with local agility
and insight through data and analytics.

17

These are critical first steps and a handful of

companies already have a head start on many
of them. The potential growth in consumption
expected from ASEANs new consumers
over the next five years is unprecedented.
Companies must take action now to ensure
they are positioned to win a slice of the
$770 billion that ASEANs new and upwardly
mobile consumers are poised to spend.

References
1 In this report, our analysis of ASEAN
focuses on its top 6 economies: Indonesia,
Malaysia, the Philippines, Singapore,
Thailand and Vietnam.
2 All dollar figures in this report are in US
dollars.
3 Accenture analysis based on data from
Global Insights 2013.
4 Accenture analysis based on Euromonitor
International 2013
5 Ibid
6 Accenture analysis on data from BPS
Indonesia Statistics 2013. Commodity
goods as defined by BPS are classified
into food and non-food categories and
include cereals, fish, vegetables, oil and
fats, prepared food, tobacco, housing,
education, health and durables.
7 Thailands Grand Infrastructure Ambitions,
Credit Suisse, August 2013.
https://www.credit-suisse.com/sg/en/newsand-expertise/news/economy.article.html/
article/pwp/news-and-expertise/2013/08/
en/thailand-s-grand-infrastructureambitions.html.
8 DOST pushes for more Next Wave Cities,
Philippine News Agency, January 2014.
http://www.interaksyon.com/
business/79374/dost-pushes-for-morenext-wave-cities-in-support-of-bpoindustry DOST pushes for more Next Wave
Cities
9 Accenture analysis based on data from
Euromonitor International 2013.
10 From serving to driving Indonesias growth,
R.J. Lino, President Director, PT. Pelabuhan
Indonesia II, September 2014
http://supplychainindonesia.com/new/wpcontent/files/From_Serving_to_Driving_
Indonesias_Growth_-_R.J.Lino.pdf
11 Global Consumer Pulse Research,
Accenture, 2013
http://www.accenture.com/us-en/Pages/
insight-digital-customer-play-to-winsummary.aspx
12 Facebook Statistics by Country, Social
bakers, 2014.

Euromonitor International 2013.

14 Accenture analysis based on data from fDi
Intelligence.
15 between 20042008 and 20092013
16 Accenture analysis based on data from fDi
Intelligence.
17 Japanese retailer employs unique tactic to
speed expansion, Nikkei Asian Review, 5th
December 2014.
http://asia.nikkei.com/Business/Companies/
Japanese-retailer-employs-unique-tacticto-speed-expansion
18 Japans Asahi Group buys Etika Dairies
business, The Star Online, 10 April 2014.
http://www.thestar.com.my/Business/
Business-News/2014/04/11/Asahi-tospur-competition-Brewery-buys-Etikasdairy-packaging-business-in-Asean-forRM11bil/?style=biz
19 How Unilever made inroads into the male
grooming space in Malaysia, Campaign
Asia, July 2013.
http://www.campaignasia.
com/agencyportfolio/
CaseStudyCampaign/348346,case-studyhow-unilever-made-inroads-into-themale-grooming-space-in-malaysia.aspx
20 Godrej Consumer may hit bullseye
with new product, Business Standard,
September 2013.
http://www.business-standard.com/
article/opinion/godrej-consumermay-hit-bullseye-with-newproduct-113092400664_1.html
21 Global Consumer Pulse Research,
Accenture, 2013.
22 Oreos 100th anniversary, marketinginteractive.com, 2013.
http://www.marketing-interactive.
com/features/case-study-oreos-100thanniversary/
23 Yet more proof m-commerce is hot:
Lines Maybelline flash sale sold out in 5
minutes, Tech In Asia, 20 Dec 2013.
https://www.techinasia.com/proofmcommerce-hot-lines-maybelline-flashsale-sold-5-minutes/

24 Aeon teaming with 2 Vietnam

supermarkets on products, distribution,
Nikkei Asian Review, 15 October, 2014.
http://asia.nikkei.com/Business/Deals/
Aeon-teaming-with-2-Vietnamsupermarkets-on-products-distribution
25 FOMA 2013 Finalist Best In-Store
Activation: P&G In-store Tablet Marketing
Campaign, Marketing Unwired, March
2013.
http://marketingunwired.com/1768/foma2013-finalist-best-in-store-activation-pgin-store-tablet-marketing-campaign/
26 Fonterra begins construction on new
IDR357 billion plant in Indonesia,
Fonterra, March 2014.
http://www.fonterra.com/cn/en/Hub+Sites/
News+and+Media/
Media+Releases/Fonterra+begins+con
struction+on+new+IDR357+billion+
plant+in+Indonesia
27 Kellogg Company Builds New Malaysian
Snacks Plant as Part of Project K Efficiency
and Effectiveness Initiative, Kellogg,
January 2014.
http://newsroom.kelloggcompany.com/
index.php?s=27529&item=131489
28 Coca-Cola Amatil Investor
Relations, November 2013.
http://ccamatil.com/InvestorRelations/
ASX/2013/CCA%20Indonesia%20
Investor%20Trip%20-%20Nov13.pdf
29 Diageo opens technical centre in
Singapore Singapore Economic
Development Board, July 2013.
http://www.edb.gov.sg/content/edb/en/
news-and-events/news/2013-news/
diageo-opens-technical-centre-insingapore.html
30 Unilever Opens 50m Leadership
Development Facility, Unilever, June 2013.
http://www.unilever.com.sg/aboutus/
newsandmedia/pressreleases/
Unilever_Opens_Euro50m_Leadership_
Development_Facility.aspx

13 Accenture analysis based on data from

18

About the research

About Accenture

To gain insights into new opportunities for

CPG companies and to better understand
the changing dynamics and preferences of
consumers in ASEAN, Accenture surveyed
over 1,800 consumers across six markets:
Indonesia, Malaysia, the Philippines,
Singapore, Thailand and Vietnam.

Accenture is a global management consulting,

technology services and outsourcing company,
with more than 319,000 people serving
clients in more than 120 countries. Combining
unparalleled experience, comprehensive
capabilities across all industries and
business functions, and extensive research
on the worlds most successful companies,
Accenture collaborates with clients to
help them become high-performance
businesses and governments. The company
generated net revenues of $30 billion for
the fiscal year ended August 31, 2014.
Its home page is www.accenture.com.

The team also conducted additional research

and a range of workshops with subject-matter
experts from around the region to understand
market, consumer and retail trends.
Our 2014 research into the implications
of AEC included a survey of 200
senior executives across ASEAN as
well as in-depth policy analysis.

Authors of this study

Dwight Hutchins
Managing Director
Accenture Strategy, APAC
dwight.n.hutchins@accenture.com
Rajat Agarwal
Managing Director
Consumer Goods & Services, APAC
rajat.agarwal@accenture.com
Tadashi Waki
Managing Director
Accenture Strategy, Japan
tadashi.waki@accenture.com
Arika Allen
Senior Manager
Accenture Strategy, ASEAN
arika.m.allen@accenture.com
Amy Chng
Manager
Accenture Research, ASEAN
amy.chng@accenture.com
Please contact us for further information on
the research or how Accenture can help.

Copyright 2015 Accenture

All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.

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