Insight & Data Compilation on Covid-19 the NEW NORMALl in indonesia

1. !1 Welcome Home Economy The New Normal: Data & Insight compilation

2. !2 Coronavirus The Current Landscape

3. !3 From This To This Per 18April 2020

4. Per 26 April

5. !5 $ 63 63 bilion to $ 113 billion AIRLINES Source: IATA, Mar 9 $ 3,5 bilion (US only, 3-month) $ 225 bilion (US only, 3-month) $ 24 bilion (US only) $ 430 bilion (US only, 3-month) RETAIL HOSPITALITY RESTAURANT LUXURY Source: Financial Times/National Federations of Retaliers, Mar 30 $ 66 bilion to $ 77 billion LUXURY Source: Bain & Company, Mar 26 Source: American Hotel & Lodging Association, Mar 25 Source: NATIONAL RESTAURANT Association, Mar 18 Source: CNBC/Tourism Economics, Mar 11 In this report, we look at companies in two categories which have been hardest hit by COVID-19. Here are some estimates of how much the pandemic will be costing some of the most impacted industries in 2020*. Amounts are in USD. Global Marketers Hardest Hit by COVID-19

6. !6 Covid-19? Bagaimana saat pandemi mempengaruhi merek/produk?

7. Kasus pertama virus Corona di luar China Kasus pertama virus Corona di Malaysia Kasus pertama virus Corona di Singapura PRODUK KESEHATAN PALING DICARI (HOT ITEM) Antusisme pada produk kesehatan untuk pencegahan virus Corona Antiseptik Masker mulut Sabun Cuci Tangan Chart: iPrice Insight - Source Google Trends - Created with Datawrapper 03/01/2020 07/01/2020 11/01/2020 15/01/2020 19/01/2020 23/01/2020 27/01/2020 31/01/2020 0 10 20 30 40 50 60 70 80 90 100 !7

8. Tren Minat Belanja Online Produk Kesehatan selama Musim Covid-19 di Indonesia 1007% Termometer 167% Masker Mulut 1986%Blackmores Vit. C 1395% Dettol 5585%Pembersih Tangan Source: iPriceGroup melacak minat belanja online orang Indonesia terhadap sejumlah produk selama masa COVID-19. Instrumen yang dipakai untuk mengetahui ketertarikan konsumen adalah data impression di Google Analityc. Diambil dari 1-29 Feb dan 1-29 Maret 2020

9. Tren Minat Belanja Online Produk Kesehatan selama Musim Covid-19 di Indonesia Source: iPriceGroup melacak minat belanja online orang Indonesia terhadap sejumlah produk selama masa COVID-19. Instrumen yang dipakai untuk mengetahui ketertarikan konsumen adalah data impression di Google Analityc. Diambil dari 1-29 Feb dan 1-29 Maret 2020 1572%Webcam414% Aloevera 377% Kertas Folio 1036%Sepeda Polygon159% Nintendo 156% Mie Goreng Anggur Merah 78%

10. !10 Source: NIELSEN Race Against The Virus Indonesia Consumer’s Report AS INDONESIA CONFIRMED ITS FIRST CASE, COOKING AND PHARMA PRODUCTS INCREASED MOST IN GROWTH

11. !11 Source: NIELSEN Race Against The Virus Indonesia Consumer’s Report HYGIENE-RELATED CATEGORIES AND SHELF-STABLE FOOD HAD HIGHEST GROWTH GAP IN COVID-19 LOCAL STAGE

12. !12 Behaviour What Would be Consumer Behaviour Threshold

13. !13 TRY THE “NEW WAYS” Online consultation Online education courses Telecommuting Software Pay for online entertainment Watch live broadcast through mobile phone Social e-commerce/ Community groups Buy indoor ﬁtness equipment Try online banking Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands

14. After the Pandemic, Huge Potential for Rebound and Some Behaviour Will Stay Out-of-home dining and gathering Travel Out-of-home entertainment Basic epidemic prevention products Food & beverage Medical/ life insurance Clothing & accessories Advanced epidemic prevention products Nutrition & health products Household cleaning products Personal care products Medicine Fitness group classes Financial management/ stock Hairdressing/ manicure Beauty products Still buy masks & disinfectant for storage at home Turn wearing masks into a daily habit Pay more to the sterilization & disinfection Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands SPENDING INCREASED

15. !15 Lesson from China and Implication for Indonesia PAY ATTENTION to the changes of consumer mindsets, consumption behaviour and lifestyles ACCELERATE digital transformation and bring digital initiatives into the real business STRENGTHEN brand-owned digital platform and embrace social commerce including community-based eCommerce PROACTIVELY ADOPT new digital commerce tools Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands

16. !16 1. Is FMCG growth negatively impacted by COVID-19? 2. Are Indonesians panic buying? 3. What does panic buying mean? Are people expanding their basket size? 4. Are germ-killing categories the only ones beneﬁting from COVID-19? 5. Is category growth only temporary? 6. Is Online the only channel that is growing? Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands BUSTING THE MYTHS

17. !17 Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands One Big week (bought more in a single week than at any point during last 8 weeks in comparison to average of 4 weeks   Pre COVID-19) Identifying Changes in Purchase Behaviour on A Week-by-Week Period

18. !18 Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands Are Indonesians Panic Buying? An extended uplift after pay-week is seen in the 1st week after the outbreak only in Jakarta Greater. We can expect similar pattern rolling out in other regions as they apply quarantine.

19. !19 Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands Is Online the Only Channel That is Growing? Despite fastest growth coming from Online, a majority of consumers still shop in Traditional Trade and Modern Trade.

20. !20 Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands Direct Manufacturer Selling Order via whatsapp directly to manufacturer’s representative. Customers can get Sido Muncul’s product by WA in their area/ region. Food Hall (MT Supermarket) Whatsapp number of store manager shared to consumers for quicker order with direct access on product availability PD Pasar Jaya (Wet Market) Order via phone, delivered via ojek Looking Ahead, Creativity Kicks in for Retailers and Manufacturers to Experiment Alternative Ways to Reach Their Shoppers

21. !21 BUSTING THE MYTHS+ Implications 1 2 3 4 5 6 Is FMCG growth negatively impacted by COVID-19? Myth / Fact? Fact (Partial) FMCG growth is still seen for Upper-Mid SES, but slowing down for Lower SES What’s Next? Lower SES will be most impacted in the long run if quarantine continues to limit daily income. Are Indonesians panic buying? Fact (Partial) So far only Jakarta Greater shows different behaviour, with additional uplift after pay day. Expect to see similar pattern in other regions as and when they apply quarantine What does panic buying mean? Are people expanding their basket size? Fact Shoppers are opting for bigger volume and expanding their category repertoire. Ensure availability of big packs in store to cater needs of shoppers seeking to upsize Are germ-killing categories the only ones benefiting from COVID-19? Myth Personal Care is not the only sector growing! Consumers are also stocking up other categories to accompany more activities at home. Less Out of Home, more In Home with positive outlook for categories catering specific purpose: Protect (germ- kill), Prevent (nutrition), Comfort Eating (ready to eat / easy to cook). Is category growth only temporary? Myth (to be proven) Some categories see a bounce back entering April, but too soon to conclude as pandemic has not reached its peak. Dairy, Packaged Food and Beverages expected to grow as we enter Ramadhan with more time spent at home, though possibly at a slower rate than last year Is Online the only channel that is growing? Myth Online is the fastest growing channel but not the only one growing! Modern Trade and Gifting. Be creative in expanding different types of distribution channels that give a solution to barriers for consumers to have access to your product. Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands

22. !22Source: KANTAR COVID19 Impact on Indonesian Attitudes & Behaviour Learning for Brands Spend most of my time at home Watch a lot more TV Reduces eating out, cooking more Switched to more online shopping Increased online education Consuming more vitamins/ jamu Started worrying about job/ income Reduced spending to save more Thinking not to mudik % who have changed following behaviour because of COVID 79% 31% 43% 10% 16% 56% 38% 26% 20% Total Kota besar Kota kecil Staying at Home Impact Changing Online Behaviour Nutrition Financial Concerns Festive Changes Nearly 80% Indonesians spending most of their time at home ! Online behaviour see a rise bit no major swings Lifestyle choices impacted higher in big cities Financial stress cuts across cities Behavioural & Attitudinal Changes Owing to COVID-19

23. !23 #1 PROACTIVE HEALTH MINDED BUYING #2 REACTIVE HEALTH MANAGEMENT #3 PANTRY PREPARATION Prioritize product essentials to virus containment, health and public safety. E.g. face mask First local transmission with no link to other location + first COVID-19 related death/s Interest rises in products that support overall maintenance of healt and wellness. Minimal localized cases of COVID-19 generally linked to an arrival from another infected country CONSUMER BEHAVIOUR SHIFTS Pantry stockpilling of shelf-stable foods & a broader assortment of health-safety products; spike in store visits; growing basket size Multiple cases of local transmission & multiple deaths linked to COVID-19 COVID-19 EVENT MARKERS Source:; NIELSEN Race Against the Virus; Indonesia Customers’ Response Towards COVID-19 2020 #4 QUARANTINED LIVING PREPARATION #5 RESTRICTION LIVING #6 LIVING A NEW NORMAL Severely restricted shopping, trips, online fulfillment is limited, price concerns rise as limited stock availability impacts pricing in some cases. Mass cases of COVID-19 communities ordered into lockdown. Increased online shopping, a decline in store visits, rising out- of-stock, strains on supply chain. Localized COVID-19 emergency actions. Percentage of people diagnosed continues to increase. People return to daily routines (work, school, etc) but opearate with a renewed cautiousness about health. Permanent shifts in supply chain, the use of e-commerce & hygine practices. COVID-19 quarantines lift beyond region/ country’s most affected hotspot & life starts to return to normal. NIELSEN SIX CONSUMER BEHAVIOUR THRESHOLDS OF COVID-19 CONCERN

24. !24 InsightsPeople & Brands, Online Shopper, Category & Purchase Behaviour

25. !25 13% 27% 12% 35% 13%Singapore Indonesia Thailand Korea Vietnam Taiwan Malaysia Philippines 33% 17%21%4%27%30% 15% 21% 5% 27% 33% 29% 4% 20% 13% 41% 40% 6% 28% 30% 10% 22% 10% 24%38%15%18% 29% 19% 6% 23% 12% 7% 17% 4% COVID-19 Crisis is An Increasing Concern for Most People in Asia The current corona virus situation concerns me hugely and… Is Impacting my day-to-day life Doesn’t impacting my day-to-day life as much Source: KANTAR; Stay Connected with Online FMCG Shoppers 2020

26. !26 It Has Pushed People to Focus More on Their Financial Security This situation demands us to be even more proactive about ﬁnancial planning and security for future The corona virus situation has no impact on how I think about ﬁnancial planning and security Source: KANTAR; Stay Connected with Online FMCG Shoppers 2020

27. !27 Concern on Scarcity of The Essentials   is Still Not an Issue for Most I often panic about running out of The essentials, and end up stocking up more than I would normally I am conﬁdent that we wont end up in a situation of scarcity. Hence, my shopping behaviour is same as be Source: KANTAR; Stay Connected with Online FMCG Shoppers 2020

28. !28 The Home Economy: More Online Shopping, Less Oﬄine Shopping Source: KANTAR; Stay Connected with Online FMCG Shoppers 2020

29. !29 Source: KANTAR; Stay Connected with Online FMCG Shoppers 2020 VT Urban Thailand Indonesia Phillipines Average Value Growth Across SEA YoY Everyone is Buying Online, Seeing the Need Now to Purchase More FMCG Online.

30. !30 Source: KANTAR; Stay Connected with Online FMCG Shoppers 2020 More People Are Shopping Online by Extending Their Shopping Basket into Smaller Sectors Like Household products, Not Only for Food & Personal Care

31. 3 Keys Take-Away Source: KANTAR; Stay Connected with Online FMCG Shoppers 2020 Impact on Consumer Behaviour Heavier baskets. SEA, panic buying likely to spread beyond key cities. With more lockdown policy’s, shopping trips will be reduced and people will focus on bigger baskets. Impact on Category Stockpiling food items. More time at home, consumers will prioritized on stockpiling food items. Products with longer shelf life or convenience will continue to gain traction. Impact on Channel Rise of E-commerce and Delivery services As consumers adapt to social distancing, online channel will fast become the safest & most convenient option during the quarantine time. C- store important for top up. Implication for Manufacturers Important for brands to have visibility and the relevant communication to win in this space and speciﬁc period.   Focus on bigger packs as well as ensure availability in online Implication for Retailers Retailers need to ensure stock availability and be careful about promotions ($ loss). Start having online platform and increase delivery capacity.

32. !32 The Next Step!

33. !33 Source: COVID-19 MARKETING BEST PRACTICE Retail / Food & Beverage An R3 White Paper. April 2020 Our review of business response in China and tracking of consumer behaviour and industry impact has led us to develop a three-pronged, action-based approach that will assist marketing recovery. ……………. ……………. ……………. ………..FUTURE-FIT-STRATEGY Develop a future-fit strategy for the NEW NORMAL As well as managing the present, now is the time to plan for the future. What is abnormal scenario has revealed is that brands that come out stronger have demonstrated the ability to pivot and adapt quickly. ……………………….……… MITIGATE Make marketing as effective as possible within each company's parameter of limitations Deciding what to keep, freeze, eliminate, and invest in will be a challenge every marketer will face. These decisions need to be based on data, but as the impact for each industry and business will depend on multiple factors including compant fiscal outlook, consumer trends, and geopolitical stability, there is no one set of rules that will apply to everyone. EDUCATE Mitigate & Prepare for the Future

34. !34Source: COVID-19 MARKETING BEST PRACTICE Retail / Food & Beverage An R3 White Paper. April 2020 EDUCATE: Keep your team informed on evolving trends and developments. Data-driven decision-making on what is essential and non-essential. What is going to empower my team and partners to work under extraordinary circumstances? What is essential now and for the future? If we need to make cuts, where do we do so efficiently and strategically? How are we measuring up to our competitors in terms of preparedness? How can we be ready to act on opportunity when the New Normal sets in? Understanding the robustness of current partnerships, process, and frameworks against your industry and business outlook for the next 18 – 24 months. Increasing efficiency in agency partnerships and media spend. Obtaining a health check of your Digital Ecosystem. Reviewing areas of your marketing and digital strategy which might not reflect anticipated changes in consumer behaviour. Revisiting your agency model against economic, industry, business, and geopolitical trends anticipated over the next 18 – 36 months. What are our strengths and vulnerabilities in an impacted local, regional, and global market? How can we move our marketing strategy towards being ready for other extraordinary events and circumstances in the future? What’s the best way to work with our agency partners? How can we increase ROI on our partnerships? Action for Marketing Recovery MITIGATE FUTURE-FIT QUESTIONS TO ASK QUESTIONS TO ASK

35. !35 01 02 03 04 • Indonesia consumers started to have concerns on COVID-19 that it will last for months. Despite the majority is thinking that the risk of spreading is low, people are keeping themselves up to date with TV and social media. • Hence the increase in TV viewing habit - approximately 2 weeks when government announced school distance learning and working from home. • Categories bought by upper SES were Food, beverage, homecare and pharmaceuticals. Among middle SES week 10 purchase hiccup happened across all FMCG groups. • Highlights on several categories in week 10 are Seasonings for cooking. Over The Counter pharmacies (OTC), and hygiene related products. Some brands that belongs to high demand FMCG categories, now pushes their ads more on TV. • The COVID-19 situation have started to impact people’s activities on travel, visiting malls, and outdoor entertainment. As for getting food through delivery services and occasional shopping, people have benn doing it relatively at the same rate as before. • As dining out is done less often, consequently home cooking is preferred choice which drive higher sales of fresh product in Modern Trade. Consuming health supplements & doing exercise to maintain health are also claimed as activities done more often,. • Benchmarking Jakarta to total Indonesia, early reaction related to pantry preparation is seen in week 10 when the President announced ﬁrst conﬁrmed cases;Even thought monthly shopping was done in the previous week after payday, indication of pantry stocking in week 10 is seen from upper SES from hypermarket/super and middle SES across Modern Trade. • Online shopping started to become an option for those who preferred to shop less in Malls & modern trade presumably to avoid crowds. Source:; NIELSEN Race Against the Virus; Indonesia Customers’ Response Towards COVID-19 2020

36. !36 • Supermarket and hypermarket are on the rise driven by mostly Upper and some Middle SES where people might look for suﬃcient stock and more product alternatives in the absence of their usually preferred items • Minimarket is also growing driven by all SES, as the relevant channel for proximity to avoid large crowds and avoid using public transportations. • Monitor stock allocation as there are risks to distribution line. • Consider Delivery services with simple ordering method and • Utilize Omni channel communication, i.e TV, Internet, Social Media, Messaging/Chat apps • Supermarket and hypermarket are on the rise driven by mostly Upper and some Middle SES where people might look for suﬃcient stock and more product alternatives in the absence of their usually preferred items • Minimarket is also growing driven by all SES, as the relevant channel for proximity to avoid large crowds and avoid using public transportations. • Monitor stock allocation as there are risks to distribution line. • Consider Delivery services with simple ordering method and • Utilizes Omni channel communication, i.e TV, Internet, Social Media, Messaging/Chat apps • Consumers are increasing spending not only on health related products but also on daily basic needs. • Find ways to make your product relevant through embracing health trends and showing empathy to win consumers heart. • Supporting consumers needs to #DiRumahAja and WFH. • Helping children and teenagers enjoy their distance learning moments. • With the restriction of going outside their home, shopping frequency is likely to decrease. Bigger packs and buy more save more is getting important. WHAT'S NEXT FOR RETAILERS? WHAT'S NEXT FOR MANUFACTURERS? Source:; NIELSEN Race Against the Virus; Indonesia Customers’ Response Towards COVID-19 2020

37. !37 Data compile and redesigned by: Seno Pramuadji All image by: UNPLASH

Insight & Data Compilation on Covid-19 the NEW NORMALl in indonesia

Insight & Data Compilation on Covid-19 the NEW NORMALl in indonesia

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Insight & Data Compilation on Covid-19 the NEW NORMALl in indonesia