E-commerce

Success in 2023
and Beyond

October 27, 2022

© 2022 Nielsen Consumer LLC. All Rights Reserved.

Meet your presenters

Vaughan Ryan Cansu Sever Brandy Niu Didem Sekerel Erdogan

MD, E-commerce, APAC E-commerce Director Vice President MD, Turkey and Analytics Leader AME
NielsenIQ Coca-Cola Icecek (CCI) JD.com NielsenIQ

Roberto van Taunay Prafull Babar Cindy Yang

Commercial Lead, E-commerce, Director, E-commerce, India, VP, E-commerce, China
Western Europe
NielsenIQ NielsenIQ
NielsenIQ

2
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 Acceleration of
e-commerce
Vaughan Ryan
Managing Director, E-commerce,
Asia Pacific

3
© 2022 Nielsen Consumer LLC. All Rights Reserved.
E-commerce has been the indisputable winner during Covid
E-com Value Split in FMCG Sales (%)

2020 2021
S. Korea 31,6% 34,8%
China 31,1% 31,6%
USA* 9,0% 15,0%
UK 11,5% 13,4%
Mexico* 3,0% 12,0%
Taiwan 8,1% 9,8%
France 7,8% 8,3%
Brazil* 4,0% 8,0%
Turkey 4,0% 5,7%
Sweden 4,6% 5,7%
Russia 3,3% 5,4%
Netherlands 3,5% 5,3%
Spain 2,5% 2,9%
India 2.3% 2.4%
Portugal 1,7% 2,4%
Italy 1,9% 2,3%
Germany 1,0% 1,4%
Hungary 1,0% 1,1%
Switzerland 0,6% 0,8%

Source:: NielsenIQ Retail & Consumer Panels

*USA, Mexico and Brazil data belongs to 2020 prepandemic & postpandemic periods 4
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Everything is pointing to e-commerce continued acceleration

Top factors when buying online Inflation driving further growth

CPI Q1 2022 (%)
Pricing 0,58

Discounts/Promotions 0,51 Brazil 10.7

Delivery time 0,42 United States 8.0
Availability 0.40
OECD Total 7.9
Ratings/text reviews from user 0,39
German 5.8
Assurance of product delivery 0,37

Product Description 0,36 United Kingdom 5.5

Trusted Online Vendor 0,36 India 5.4

Product Ingredients / Specs 0,34 Australia 5.1
Return Policy 0,33
Indonesia 2.3
Description of the product’s benefit 0,32
China 1.2
Opinions from friends/Family 0,24

Opinions from experts/Influencers 0.20 Japan 0.9

Source: NielsenIQ APAC BASES Survey, February 2022 Source: OECD CPI results Total Q1 2022
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Heavily impacted by lockdowns, On Premise rebound
Grocery Convenience
as restrictions
Drug
are lifted, but eCommerce continues to grow,
Traditional
On Premise
Trade Discounters eCommerce
40.0%

FMCG channel performance 35.0%

%Growth vs YA

30.0%
26.4%
25.0%

20.0%
9.6%
15.0%
7.5%
10.0% 6.5%
6.3%
5.0% 3.8%
3.3%
0.0%
Q3 2021 Q4 2021 Q1 2022 Q2 2022

Grocery Convenience Drug

Traditional Trade Discounters eCommerce
40.0% On Premise

35.0%
Source: NielsenIQ RMS FMCG MAT and quarterly Q2 2022, Hypermarkets 29 markets, Supermarkets 34 markets, Small Superettes 28 markets,Convenience 33 markets,Drug 39 markets,Traditional Trade 41 markets, Discounters 16 markets, Ecommerce 12 markets, On Premise 13 markets.
*Fact: Value % growth vs YA (unweighted)
Note: Italy excluded from Global and Regional benchmarks
Note: Ukraine data sourced from Scantrack from Q1'22 30.0% 6
© 2022 Nielsen Consumer LLC. All Rights Reserved. 26.4%
...And after the rapid increases of the pandemic, e-commerce continues
to grow over most regions

Channel performance
% value growth vs YA
Europe WE EE APAC & CN NA

46.4%

14.5%

0.8%
-2.9%
-5.8%

Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022

Source: NielsenIQ RMS FMCG MAT and quarterly Q2 2022 - Ecommerce 12 markets considered
Asia Pacific n=3, North America n=1, East Europe n=2, West Europe n=5
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FMCG Channel performance across regions

6.9% North America -0.2% West Europe 11.6% East Europe

Grocery -0.9% Grocery 12.3%
Grocery 6.0% Convenience Convenience
1.8% 11.9%
Convenience 3.2% Drug 6.6% Drug 12.4%
Drug 8.5% Traditional Trade -2.3% Traditional Trade 8.0%
eCommerce 15.0% Discounters -0.4% Discounters 13.2%
eCommerce 3.0% eCommerce 69.3%

14.1% Latin America 20.7% Africa Middle East 1.6% Asia Pacific and China
Grocery 0.7%
Grocery 12.2% Grocery 13.2%
Convenience 5.0%
Drug 11.8% Convenience 11.8%
Drug 7.5%
Traditional Trade 19.3% Drug 5.5%
Traditional Trade 3.5%
On Premise 10.4% Traditional Trade 28.3%
Discounters -1.8%
On Premise 45.5%
eCommerce 0.9%
Source: NielsenIQ RMS FMCG MAT Q2 2022
Fact: Value % growth vs YA (unweighted)
Note: Grocery is Modern Trade, Hypermarket, Supermarket, and Small Superettes (AME Hypers/Supers incl Grocery)
Note: for Global and regional aggregates; WE excludes Italy, EE excludes Serbia
On Premise 20.8%
Note: Ukraine data sourced from Scantrack from Q1'22
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What is the ceiling on e-commerce?

■ South Korea is the world’s largest

Share of online sales, South Korea vs US in % online FMCG market by value
share
■ SK’s e-commerce trend is
typically about 10 years ahead of
80% the rest of the world
■ The global pandemic
72%
fueled online sales in SK which
relies partly on COVID, partly on
60% 61% convenience.
■ Currently, online projections are
expected to surpass traditional
channels
■ A most likely scenario will be that
the rest of world will follow the
30%
28% South Korean e-commerce
23% growth trend - see U.S. example.
15% ■ Two valuable lessons for FMCG
players and brands: Invest in e-
commerce now but be prepared
to be flexible to the changing
market dynamics to continue
South Korea 2010 South Korea 2020 U.S. 2020 U.S. 2030 Est. a growth trajectory in the future
Beauty Baby ■ As Apple founder Steve Jobs once
said: “You can’t just ask a
customer what they want. By
the time you build it, it’s too
late.”

Source: + NIQ e-commerce sales & forecast 9

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It's not online or offline but OMNI
50% of global E-Commerce sales comes from Asia & continuing to grow even with slower pace vs the start of
the pandemic, it is clearly the 2nd biggest channel in Asia behind Traditional Trade

Value share of trade in Asia Pacific Online

importance MAT 2YA MAT LY MAT TY Trend

3,6% 3,4% 3,1% South Korea 31 ,0% 36,0% 38,0%

5,3% 5,4% 5,1%

12,3% 11,8% 12,0%

China 27,5% 29,8% 30,2%

15,9% 14,8%
17,7%
Singapore 1 0,4% 1 4,7% 1 6,9%

18,4% 18,4%
16,2%
Australia 7,3% 1 0,5% 1 2,2%

Drugstores/Pharma/Cosmetics Taiwan 7,0% 8,7% 1 0,1 %

Other
44,9% 45,2% 46,5%
CVS/Minimarket
Hong Kong 2,9% 4,9% 5,0%
Hyper/Super

Online
India 1 ,7% 2,3% 2,3%
MAT 2YA MAT LY MAT TY Traditional Trade

Source: NielsenIQ RMS and CPS data to June 2022. Other includes mom & baby stores, department stores, schools, HORECA etc where tracked 10
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 Accelerating growth
with essential data
Roberto van Taunay
Commercial Leader, E-Commerce,
Western Europe

11
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COVID-19 has resulted in an acceleration in e-
commerce usage
While for some countries 1H 2022 showed a slowdown vs. 2021, acceleration
visible across all countries in 2H

Source: NielsenIQ Foxintelligence e-commerce consumer panel of >1.3 million panelists

12
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The oldest and youngest generation have shown the strongest
increase in their online spending compared to January 2020

Generation Z: ≤ 27 years

Generation Y: 28 - 42 years

Generation X: 43 – 62 years

Generation B: ≥ 63 years

Source: NielsenIQ Foxintelligence e-commerce consumer panel of >1.3 million panelists 13

© 2022 Nielsen Consumer LLC. All Rights Reserved.
Due to the 24/7 model, the key shopping
moments have changed
Important to understand when consumer activation is most impactful

#1 % of categories #2 % of categories

France Monday 40% Friday 16%

Germany Monday 42% Tuesday 27%

Italy Monday 31% Tuesday 29%

Spain Monday 32% Tuesday 23%

UK Monday 32% Friday 21%

Source: NielsenIQ Foxintelligence e-commerce consumer panel of >1.3 million panelists

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Zoom in to optimize your consumer activations to ensure to be top of
mind when consumers make their purchase decisions
Example: salty snacks in France. While Friday and Thursday are the days where consumers spend most, there
are other important timeslots to be top of mind

Source: NielsenIQ Foxintelligence e-commerce consumer panel of >1.3 million panelists 15

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Quick commerce / rapid delivery: what to expect?

16
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Consumer demand is clear: rapid deliveries is
relevant however behind in Southern EU
Share of quick commerce within number of orders in 2022 comparing total
country versus capital city

Source: NielsenIQ Foxintelligence e-commerce consumer panel of >1.3 million panelists * Note: Getir is excluded in the UK 17
© 2022 Nielsen Consumer LLC. All Rights Reserved.
…and there is more potential
Quick commerce is currently used more often for specific categories

▪ Alcoholic beverages
▪ Baby food ▪ Bread spreads
▪ Health care ▪ Confectionary ▪ Fruit & vegetables
▪ Home care ▪ Dairy ▪ Pasta, rice, sauces.
▪ Personal care ▪ Meat, fish, vegetarian, vegan ▪ Pizza, salads, RTE meals
▪ Pet food ▪ Non-alcoholic beverages ▪ Salty snacks

Source: NielsenIQ Foxintelligence e-commerce consumer panel of >1.3 million panelists 18

© 2022 Nielsen Consumer LLC. All Rights Reserved.
…another trend with potential:
direct to consumer
Available data shows D2C importance especially in coffee, cosmetics,
nappies, perfumes, personal care, pet food, and vitamins, minerals &
supplement

1 out of 18 orders 1 out of 71 orders 1 out of 59 orders

DTC/All merchants
▪ DE: 33/159
▪ ES: 23/108
▪ FR: 81/200
▪ IT: 10/105
▪ UK: 43/166
1 out of 52 orders 1 out of 31 orders

Source: NielsenIQ Foxintelligence e-commerce consumer panel of >1.3 million panelists

19
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Top 10 fastest growing brands in e-commerce per country
Scope: FMCG top 100 brands (excl. private label) in value sales, YTD Oct 2022 vs. 2021

* Note: first selection criteria is size, and following growth. Above doesn’t imply that these brands are always the fastest growing brands in their respective categories

Next to known brick & mortar brands, several examples of direct to consumer and e-com exclusive brands within the fastest
growing biggest online brands

Source: NielsenIQ Foxintelligence e-commerce consumer panel of >1.3 million panelists 20

© 2022 Nielsen Consumer LLC. All Rights Reserved.
 What lies ahead for
e-commerce
Cindy Yang
Vice President, E-commerce, China

Prafull Babar
Director, E-commerce, India

21
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2022 Nielsen
NielsenConsumer
Consumer LLC.
LLC. AllAll Rights
Rights Reserved.
Reserved.
Consumers start to look for products from Omni channels All METRO INDIA

FMCG Online & Offline share and growth FMCG Value contribution%
COVID I COVID
II
6,5 8,4 8,6 7,4 7,1 8,5 7,5 7,8 7,1 7,7

93,5 91,6 91,4 92,6 92,9 91,5 92,5 92,2 92,9 92,3

40,55
39,63

29,90

26,85
24,78
25,35
25,19

23,34
22,65
20,88

23,13
20,95

20,72

20,55
21,87

21,04
21,06

21,26
19,92

19,65
18,72

17,89

17,26
16,92
15,55

Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22
Online Offline
TT+MT Ecom

• MAT March 22 value growth for e-commerce at 14.4%. Online FMCG

penetration grew from 15% pre – COVID to 25% Post COVID^

• Headroom for e-com growth in a market dominated by traditional

trade
• Increasing smartphone penetration
•
Jan21

Mar21
Jul20

Sep20

Jul21

Mar22
Sep21
Oct20

Dec20

Feb21

May21

Oct21

Dec21
Jan22
Feb22

Apr22
May22
Nov20

Apr21

Nov21
Aug20

Aug21

Jun22
Jul 22
Jun21

Faster and economical delivery infrastructure

• Greater adoption in Tier II and Tier II towns
• Simpler payment options

* Source: Nielsen IQ e-track index ^: Nielsen Consumer Intelligence (Consumer Panel) | Period: Nov’19 to Nov’21, Post Cancellations/ returns |
Source: NIQ Ecom tracking FMCG
22
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Personal care/ Necessities drove online migration trend in China,
while Beauty & Fashion gained momentum in India e-commerce

FMCG growth trend Total e-commerce sales value contribution

Online Growth
Necessities/ Personal Care + 7% 7%
Food & Beverage
Others
11% 13%
FMCG and Personal Care
5% 5%
33% 22% 7% 7% Kitchen & Home
Categories
Categories 13% Large appliances
14%
Electronics and Accessories
15% Fashion
22%
Mobile

Offline Growth
- 0 +
42%
32%

2020 2021

Food Categories ▪ Non foods FMCG categories^ growing at 37% vs YA

- Non Food Categories ▪ Beauty & Hair, Personal & Home hygiene expected to gain further
momentum

Source: NielsenIQ India Consumer Panel, Jan 2020 – Dec 2021

Source: NIQ Ecom tracking 2022 Jun. MAT *^Source: Nielsen IQ e-track index ^ MAT NOV 21
23
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Emerging channels, such as Quick Commerce (O2O) and Social
Commerce surge to meet different consumption scenario
Product Variety
2021 Ecom Channel GMV Share & Growth Price Comparison
Convenience

Appealing Contents
‘Quick commerce’ and ‘Brick & Click’
Social/Content Ecom retailers promising deliveries as early
Livestream Commerce with
Mainstream EC
as 10 minutes
Persuasive Host
6% 73%
+322%
+13%
Wechat
Delivery Speed O2O New Retail mini-program
Fresh and Quality product 2% 17%
Detailed Product Information +88%

Vertiaal EC
2%

Social/Content Ecom : Tiktok, Kuaishou, Dewu, XHS ； O2O New Retail : Meituan, ELM, JDDJ, HEMA, Others Wechat miniprogram : mainly brand/retailer owned

Source: 2021 Financial statement of relevant company 24

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Key festivals take important part of online sales

Key online festival sales performance Online consumers are deal crazy

Contribute ~40% sales of the whole year FMCG Monthly Order contribution% First 5 days of the month

6th- 15th day

Growth in orders in the sale week vs. rest of the month 16th-25th day

Last 5 Days of the month

40%

61% 58%
35%
36%
30%

25%

20%

Y2020
15%
Y2021
10%

CNY 618 Festival Double 11 Festival 5%

0%
vs. non-peak Aug'21 Sept'21 Oct'21 Nov'21 Dec'21 Jan'22 Feb'22 Mar'22 April'22
sales
X 1.3 X 1.6 X 2.5
Indepen
dence Diwali Republic
day day

Source: NIQ Ecom tracking * Source: : Nielsen Consumer Intelligence (Consumer Panel) | Post Cancellations/ returns
25
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Focus on the fundamental and embrace the trends

Fundamental Needs Upgrade with Innovation Most Valuable Consumers

Promotion & Value for money Rising of health consciousness Gen Z & the Grey/ Silver
Beauty & Fashion

26
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Value For Money - Promotion and livestream continuously
strengthen to attract consumers’ attention

71% 54% 44%

vs. 2020 +3% vs. 2020 +10% vs. Global +20%

Consumer attracted by the Consumer seek for lower Consumer prefer to choose
promotion of Ecom festival discount in livestream products “Value for money”

Tmall Promotion% in Ecom Festival Share of B2C livestream item count Economy package is welcomed
13,5%
▪ “Bundle pack”
▪ “Multi pack”
9,7%
▪ “Full box ”
7,2%
▪ ...
-12%
-13% 3,8% 3,8% 3,4%
-16% 2X~5X Growth
2021 2021 2022
vs. category total growth
618 Double 11 618
2021Q1 2021Q22 2021Q3 2021Q4 2022Q1 2022Q2

Source: NIQ online shopper trend, NIQ Ecom tracking 27

© 2022 Nielsen Consumer LLC. All Rights Reserved.
Spending per shopper grows as discounts increase

Personal Care
23%
1200 25%

21% 21%
1000

18%
20%

17% 954
800

852 865 862

787 15%

600

10%

400

Spends per shopper (INR)

Average Discounts 5%

200

0 0%

Mar'22 Apr'22 May'22 Jun'22 Jul'22

Source: Nielsen E-commerce Consumer Panel (eAnalytics), Average discounts from Digital Shelf tracking solution for select retailers in top 8 metros * Personal Care includes FMCG Personal categories such as
Soaps, Shampoo, Skin Creams, Face Washes etc 28
© 2022 Nielsen Consumer LLC. All Rights Reserved.
Upgrade opportunity - Consumers are willing to pay premium
for health-related products.

Consumer's attitude to health & wellness Top selling products with health concept -
Food & Beverage

Nutrition Management:
89% CSD Chocolate Liquid Milk
Chinese consumers put nutrition as top priority ​ 0 Sugar 0 Sugar Organic
0 Calorie Low Fat For unique needs

Weight Management: 0 Fat

32%
Chinese consumers are overweight +40% +60% +32%
Price index: 139 Price index: Price index:
289 226
Healthy lifestyle:
73%
Chinese consumers are actively seeking a better lifestyle
than ever before

Sources: World Health Organization, NIQ My Ecom MAT2206 29

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‘Looking good’ shows up in the booming Fashion and Beauty
segments

Fashion Retailers Beauty Retailers

Users for Jun 22 indexed

to June 21 1.3x 1.2x 1.9x 0.7x

Premium vs category,
Jun 22 1.6x 0.6x 1.1x 1.6x

Source: Nielsen E-commerce Consumer Panel (eAnalytics) , Premium based on spends per shopper 30
© 2022 Nielsen Consumer LLC. All Rights Reserved.
New online consumption power

Aging population
GenZ’s Shopping Attitude Factors which impact shopping The elderly population over 60 are rapidly
decision of GenZ expanding

68% Value for money

30,0
18,9 20,0
Willing to spend more for improving
life quality
Meet personal interests 2021 2025e 2035e

Provide thoughtful The Silvers

service

69%
online shopping sales increased

Delicate and with good

appearance
X 4.8 （vs. 2001-2006)
Passionate about buying new

75%
products as a pleasure in life
With good quality
Willing to spend more for products with
good quality

Source: NIQ X Bilibili Genz study report, NIQ global consumer health attitude study, JD the Silver online consumption study 31
© 2022 Nielsen Consumer LLC. All Rights Reserved.
 Play in
Omni-channel

Focus on Upgrade with Look For

Fundamental Innovation Most Valuable
Value > Money Trends Consumers

▪ Consumers seek for better • Consumers are willing to pay • GenZ pursue quality and freshness
quality with cheaper price, and premium for what they care
are enthusiastic for promotion most, either Health & Wellness or • The Silver are becoming more online-savvy
and lower discount beauty.

▪ Value for money products are

welcomed
32
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niq.com/global/en/insights/e-commerce

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