Jeffrey Bahar, Deputy CEO of Spire Research and Consulting, presented the growth and opportunity in Franchising Business Industry in SEA Asia 2015. Presented as 1st opening plenary session at Franchise International Malaysia 2015 by Malaysia Franchise Association, Kuala Lumpur 18 May 2015

1. GROWTH AND OPPORTUNITY IN
FRANCHISING BUSINESS INDUSTRY
MARKET FOCUS: ASEAN ECONOMIC COMMUNITY (AEC)
By Jeffrey Bahar, Deputy CEO Spire Research and Consulting
June 2015

2. AGENDA
• Economy and Market Overview
• Growth and Opportunities of Franchise Sector in AEC
• Current and Forecast Trends of Sector
• Leading Players in the Industry
• Market Attractiveness for Malaysian Franchises
and Regional Challenges

3. Economy and Market Overview

4. THE COUNTRIES: FACTS AND FIGURES 2013 (1)
Source: World Bank, Spire Analysis
+250
MILLION
1.2%
868 B
USD
3,475
INDONESIA MALAYSIA THAILAND VIETNAM SINGAPORE
+30
MILLION
1.6%
313 B
USD
10,538
+67
MILLION
0.3%
387 B
USD
5,779
+90
MILLION
1.0%
171 B
USD
1,910
+5.5
MILLION
1.6%
298 B
USD
55,182
Population Population Growth GDP GDP per Capita

5. THE COUNTRIES: FACTS AND FIGURES 2013 (2)
Source: World Bank, Indonesian Bureau Statistic, Singapore Department of Statistics, Malaysian Ministry of Finance, General Statistics Office of Vietnam, Central Intelligence Agency, Spire Analysis

6. The Growth and Opportunities of Franchise Sector in
AEC

7. US$ 3.8 Trillion
Global FRANCHISE
Industry Value, 2014
ASIA
US$0.6
Trillion
(2014)
USA
US$2.4
Trillion
(2014)
Franchise
establishments
Revenue
Output, $
+1.5%
+4.9%
2014
+1.6%
+5.4%
2015
± 30%
± 25%
2014
± 15%
± 20%
2015
Source: International Franchise Association (IFA) 2015 Outlook Report, Spire Analysis
GROWTH OUTLOOK
FRANCHISE INDUSTRY OUTLOOK & TRENDS:
2014 - 2015

8. FRANCHISE INDUSTRY OUTLOOK & TRENDS:
2014 - 2015
FOOD
Quick Serves
Source: International Franchise Association (IFA) 2015 Outlook Report, Spire Analysis
FRANCHISE
COMPOSITION
Total establishments
PERSONAL
SERVICES
Education, Health Care,
Laundry, Entertainment, etc.
RETAIL
Products & Services
Groceries (MGR), Clothing,
Footwear, Other Non-Food
Products
FOOD
Restaurants
#1
20%
#8
4.8%
#2
15%
#3
13%
#3
20%
#1
35%
#9
3%
#2
25%

9. Current and Future Trends in Food and Beverages

10. INDONESIA: CURRENT AND FORECAST TREND IN FOOD
& BEVERAGE
High Level,
1%
Medium
Level, 37%
Low Level,
62%
Bali, 11.5%
Central Java,
3.7%
East Java,
6.8%
Jakarta,
28%
North
Sulawesi, 2% North Sumatra,
13.2%
Others, 7.1%
Riau, 2.7%
South
Sulawesi, 5.1%
West Java,
11.8%
Yogyakarta,
8.1%
Other,
27.7%
RESTAURANT Based on GEOGRAPHICAL SPREAD
RESTAURANT Based on LEVEL
246,405241,337
171,028160,892
2013 2016
+2%
+6%
FOOD Restaurant Outlet
FOOD Quick Serves Outlet
48.7 Bn US$
53.3 Bn US$
+9.4%
Industry Revenue

11. VIETNAM: CURRENT AND FORECAST TREND IN FOOD &
BEVERAGE
% of Urban Population
32%
How Often Vietnamese People go eating out?
40% 37%
13% 6%
5%
Eating out
everyday
Eating out
weekly
Eating out
monthly
Eating out
more than a
month
never
114,440111,706
457,762446,824
+2%
+2%
2013 2016
FOOD Quick Serves Outlet
FOOD Restaurant Outlet
33.1 Bn US$ 37.9 Bn US$+14.1%
Industry Revenue

12. THAILAND: CURRENT AND FORECAST TREND IN FOOD
& BEVERAGE
12%
24%
19%
15%
30%
everyday
1-2 times a week
2-3 times a week
3-6 times a week
seldomly eat out
Bangkok South East Central North West Northeast
45%
22%
16%
6% 5% 3% 3%
Thai consumer Eating out Behavior Restaurant Establishment
13,85613,413
124,712120,721
+3%
+3%
FOOD Restaurant Outlet
FOOD Quick Serves Outlet
22.8 Bn US$
26.1 Bn US$+14.4%
Industry Revenue

13. SINGAPORE: CURRENT AND FORECAST TREND IN
FOOD & BEVERAGE
5,0074,815
22,399
21,333
+4%
+5%FOOD Quick Serves Outlet
FOOD Restaurant Outlet
8.3 Bn US$
8.7 Bn US$+4.6%
Industry Revenue
Street Stalls, hawker foods,
Fast food outlets
81%
Restaurants/cafes
67%
Friend’s House
6%
Other 2%
Where do you most
Commonly eat
Food when you are
not at home?
30%
3 times a week or more
less than a month
22%
10%
a few times a month
once or twice a week
37%
How often do you dine out?

14. Current and Future Trends in Wholesale and Retail

15. INDONESIA: CURRENT AND FORECAST TREND IN WHOLESALE &
RETAIL
Types and Number of Retail Stores in Indonesia (2014)
2.5 mio STORES
Traditional Retail Modern Retail (Minimarket) Modern Retail (Supermarket)
13,000 STORES 11,000 STORES
Number of Modern Retail
Stores(2004-2014)“In average, the
amount of modern
retail stores has
17.57% annual
growth in the last
10 years.”
+40%
468,809
20162013
335,024
RetailsalesinMnUS$

16. VIETNAM: CURRENT AND FORECAST TREND IN
WHOLESALE & RETAIL
97
85
76
67
20142013 2015 2016
RetailSalesinBnUS$ +13%
125
700
8,600
Total Establishment
Traditional markets
Supermarket
Shopping Centres
29%
71%
local-owned
foreign-owned

17. THAILAND: CURRENT AND FORECAST TREND IN
WHOLESALE & RETAIL
129,414
119,811114,692118,471
2013 2014
RetailsalesinMnUS$
+3%
2015 2016
-3%
40%
60%
Traditional Trade
Modern Trade
Retail Business
Modern Trade
Hypermarket
Supermarket
Convenience
Department
Store
Category Killer
Specialty
Store
Traditional
Trade
The first retail business was not established in
Thailand until 1955
Until that time 100% of economic activity occurred
within ad hoc market/trading environment
dominated by small traders and highly inefficient.
This still persists in many area.
Modern Retail is the term officially given to the organized,
scalable and professionally managed retail industry.
By 1998, 35% of the value of goods sold in Thailand was
claimed by Modern Retail. This growth trajectory has
continued with Modern Retail expected to capture 65% by
2015

18. SINGAPORE: CURRENT AND FORECAST TREND IN
WHOLESALE & RETAIL 49,769
40,760
+22%
RetailsalesinMnUS$
20162013
In 2014
Year
Growth (%)
Prime Orchard Prime Suburban
2015 -3% to -5 % 0% - -3%
2016 0% 0%
Singapore’s economic growth is
forecasted to be at a moderate
pace, ranging between 2.0%
and 4.0% in 2015, while the International Monetary Fund (IMF) has
lowered its global economic growth projections to 3.5%. Hence,
slower retail sales (excluding motor
vehicles) may continue to loom due
to weaker tourism and economic
development.
Rental Growth Forecast

19. Leading Players for F&B, Retail, and Personal Services

20. FRANCHISE INDUSTRY PLAYERS: FOOD SERVICE
1. Top Food Indonesia
2. Kebab Turki Baba Rafi
Source: Franchise Information Manual Slideshare, Agriculture and Agrifood Canada, Spire Analysis
1. Secret Recipes Cakes & Recipe
2. Old Town White Coffee
1. Vie Thai Int. Thai Stock
2. Nam An Group
1. MK Restaurants
2. 5 Stars Grilled Chicken
1. Tung Lok Restaurants
2. Crystal Jade Culinary
Concepts

21. FRANCHISE INDUSTRY PLAYERS: RETAIL
1. Indomaret
2. K-24
1. Clara International
2. Focus Point
1. Metro Cash & Carry
2. Parkson
1. Petland
2. Ziebart
1. Laundrymart
2. TTQ Massage

22. Market Attractiveness for Malaysian Franchise

23. MARKET ATTRACTIVENESS FOR MALAYSIAN
FRANCHISE AND REGIONAL CHALLENGES
Population GDP
PPP
Urbanization
Population
Growth
Slight CLM Market Overview
Population GDP
PPP
Urbanization
Population
Growth
Myanmar
Cambodia
Laos

24. Automotive
Commercial &
Residential
Services
Lodging
Business
Service
Quick
Service
Restaurants
Real Estate
Personal
Services
Retail
Products &
Services
Table/Full
Service
Restaurant
Retail
Food
MARKET ATTRACTIVENESS FOR MALAYSIAN
FRANCHISE AND REGIONAL CHALLENGES

25. Tel: (62-21) 5794 5800
Fax: (62-21 5794 5808
Wisma 46 Kota BNI, 25th Floor, Unit 07 & 09
Jalan Sudirman Kav. 1, Jakarta 10220
INDONESIA
id.info@spireresearch.com
www.spireresearch.com
DID: (62-21) 5794 5801
M: (62-812) 1005 940
jeffrey.bahar@spireresearch.com