《麦肯锡(McKinsey):2022年东盟地区食杂市场报告-平衡增长与盈利(英文版)(11页).pdf》由会员分享,可在线阅读,更多相关《麦肯锡(McKinsey):2022年东盟地区食杂市场报告-平衡增长与盈利(英文版)(11页).pdf(11页珍藏版)》请在三个皮匠报告上搜索。
1、Retail Practice ASEAN grocery:Balancing growth with profitability The race is on to capture market share amid fierce competition.Retailers need to reinvent themselves while retaining a focus on sustainable growth.November 2022 FangXiaNuo/Getty Imagesby Matthieu Francois,Clarence Lew,An T.Nguyen,and
2、Hai-Ly Nguyen2State of Grocery Southeast AsiaThe nature of the grocery industry across the Association of Southeast Asian Nations(ASEAN)has evolved significantly.While traditional trade still dominates most markets,ongoing revenue growth of 7 to 10 percent a year is mostly fueled by the rising penet
3、ration of relatively newer,modern formats,especially convenience stores and supermarkets(Exhibit 1).Its tantalizing to chase such growth,but pursuing scale without considering the bottom Exhibit 1Modern retail formats are driving the growth of the grocery industry in Southeast Asia.ASEAN1 market sha
4、re by store format and country in 2021,%Note:Figures may not sum to 100%,because of rounding.1Association of Southeast Asian Nations.2Brunei,Cambodia,and Laos.Source:Euromonitor Southeast Asia.0554045778952950976$76.5 billionConvenience stores$53.2 billion
5、$50.2 billion$22.4 billion$15.2 billion$9.3 billion$6.6 billion$7.5 billion1538150IndonesiaVietnamThailandPhilippinesMalaysiaMyanmarSingaporeOther556065707580859095100111SupermarketsHypermarketsOther mass grocery retailTraditional grocery retail3State of Grocery Southeast Asialine may place retailer
6、s at a competitive disadvantage,especially when compared with those who instead balance growth and profitability while retaining the ability to reinvent their business models as they grow.Two themes guiding growthThe top-line numbers are impressive:revenue growth among grocery retailers is projected
7、 to be 10 to 12 percent annually in Indonesia and Malaysia,with Vietnam and Thailand each growing around 7 percent annually in the next decade.The Philippines and Singapore are expected to grow less rapidly because the penetration of modern store formats in those markets is relatively higher.So what
8、 is driving this expansion?Two common themes have emerged across all markets.First,the convergence of formats between traditional and modern trade has resulted in the disproportionate growth of small modern formats.Second,consolidation and localization are prevalent across markets.At this stage,regi
9、onal(cross-border)expansion has been limited,likely because most strong players have found enough headroom in their own markets.1.Stronger tailwinds for small modern formatsAcross the region,convenience stores and neighborhood supermarkets have become more popular,while family grocers are increasing
10、ly locating their stores in residential areas,moving away from the earlier growth model that prioritized dense,high-traffic urban centers.Both chains and independently owned outlets have adopted some of the elements of modern trade.Yet revenue growth is not homogeneous across formats.Overall,we expe
11、ct a more rapid expansion of small modern formats,which more effectively meet consumer needs.ASEAN shoppers have lower rates of car ownership than their counterparts in the United States or Europe,as well as less disposable income for large-basket purchases.For both of these reasons,ASEAN shoppers t
12、end to favor stores near their homes that offer a wide and reliable product assortment for daily needs,and they also tend to make more frequent visits for smaller individual purchases.For example,in the past few years,the likes of Bch Ha Xanh in Vietnam and Alfamart and Indomaret in Indonesia have o
13、utpaced market growth.This overall trend within modern trade encompasses two models:On-the-go retailers in dense urban areas.Convenience stores tend to cater to urban shoppers and rely heavily on high-traffic locations,on-the-go consumption,ready-to-eat food,and a small selection of packaged food an
14、d drinks(with more limited fresh-food offerings).In Malaysia,for instance,convenience stores have evolved into three competing concepts:lifestyle retailers,such as FamilyMart and KK Super Mart;minimarts,such as 99 Speedmart;and stores linked to gas stations,such as Shell Select.While we believe more
15、 formats will emerge to address other potential consumer needs,all of the above formats have 1 Euromonitor.4State of Grocery Southeast Asiacommon features:they are typically located in dense urban areas,achieve elevated sales productivity,and can generate relatively high gross margins(which is neces
16、sary to cover their significant fixed costs,especially rent and staffing).Core daily needs in residential areas.Small supermarkets and minimarts have become popular in Southeast Asia,especially in Indonesia and Vietnam.They represent a different value proposition.These stores are typically 150 to 50
17、0 square meters in size,catering to most of the core daily needs of householdsincluding fresh foodwith product assortments totaling 2,000 to 5,000 SKUs.Companies such as CJ in Thailand and 99 Speedmart in Malaysia,for example,have sought to pivot to this concept when expanding beyond dense urban are
18、as.Compared with convenience stores,small supermarkets and minimarts are scaling faster because they offer a path to growth beyond high-traffic locations in megacities and benefit from lower structural costs,which enables them to achieve profitability.In Indonesia and Vietnam,for instance,industry e
19、xperts expect small semi-urban minimart formats to be closer to profitability than pure convenience stores.Interestingly,the industry is starting to see a convergence between traditional and modern retail in which some mom-and-pop stores grow into large family grocers to complement market stalls and
20、 other niche outlets.These stores feature a broader product assortment,fixed prices,and a shopping experience closer to that of modern retail,in which people enter the store to shop.Family grocers in rural and suburban areas have the same appeal as a minimart,featuring an acceptable assortment,cashi
21、ers,shelves organized by product category,shopping assistance,and transparent pricing.They are also well supported by consumer goods manufacturers and their distributors,receiving a fair share of trade spending,access to consumer promotions,and regular visits by merchandisers.Corporate retail player
22、s have spotted this opportunity and are developing business models to help modernize traditional trade by extending their loyalty programs and distribution networks to family grocers.For example,VinShop-affiliated grocery stores in Vietnam receive sourcing assistance and can offer the VinID loyalty
23、program to shoppers.And the countrys Co.opSmile modern grocery stores by Saigon Co.op are a hybrid format of modern minimarts and traditional grocers.2.Consolidation and localization within countries but with limited regional expansionAnother distinctive feature in recent years among the markets we
24、analyzed has been industry consolidation.In most markets,we observed strong national champions leading the growth of modern retail by expanding their footprints,adapting their formats,making strategic acquisitions,and localizing offerings to cater to their core shoppers.Some forays by nonlocal playe
25、rs have been observed,such as in convenience stores in Vietnam and the Philippines and hypermarkets in Indonesia,yet the bulk of the market share and 5State of Grocery Southeast Asiagrowth seems to reside with established local companies.Several factors have contributed to the success of domestic pl
26、ayers in ASEAN countries.First,the regulatory environment may have encouraged foreign players to focus their investments on larger stores.For example,Vietnam requires investors to apply for an“economic needs test”for each individual store opened,while Indonesia and Malaysia have explicit constraints
27、 on the ownership of smaller stores.Second,local players have been consistently better at directly addressing local shopper needs,reinventing formats,and rapidly tailoring their assortments.Finally,local insights and on-the-ground decision making have been critical,allowing retailers to identify and
28、 capture the best locations.These capabilities are even more important as some local retailers begin to own parallel business units that develop commercial real estate.Going forward,these national champions may look for cross-border growth opportunities.Some Southeast Asian retailerssuch as Central
29、in Vietnam and Alfamart in the Philippineshave already invested across markets.However,companies are likely to continue relying on local strategic partners and acquisitions to enable true cross-country growth.For example,Central in Vietnam partnered with local retailer Lan Chi Mart to expand its foo
30、tprint in smaller cities,while Alfamart joined forces with SM in the Philippines.Meanwhile,as core players experience some degree of consolidation,the expectations of the growing local middle class are evolving,leading to more polarization(for example,rising demand for premium fresh products on one
31、end of the spectrum and demand for economically competitive offerings on the other).Paradoxically,this consolidation also leads to more niche opportunities and a fragmentation of the value propositions in the long tail,2 with the rise of more specialized offerings by premium grocers and category spe
32、cialists(for example,butcher shops,dairy stores,and cuisine specialists),as well as the possible emergence of discounters.2 A strategy in which retailers generate significant profits by selling low volumes of hard-to-find items to many customers.As core players experience some degree of consolidatio
33、n,the expectations of the growing local middle class are evolving,leading to more polarization.6State of Grocery Southeast AsiaSix ways disruption will further shape the industryThe grocery retail market will continue to evolve considerably in the years ahead in response to changing consumer behavio
34、r and preferences,with incumbents seeking to adapt their strategies and new market entrants altering the competitive landscape.We have identified six fundamental trends and disruptions that could help reshape the industry across Southeast Asia(Exhibit 2):1.The rise of small formats.The rise of small
35、 formats has consistently fueled growth in local markets,especially in Indonesia and Vietnam.This redistribution of the revenue pool can attract new entrants seeking to capture market share from established retailers.For example,CJ Express in Thailand,99 Speedmart in Malaysia,and Bch Ha Xanh in Viet
36、nam are relative newcomers that have built significant momentum.2.Polarization.The growth and diversification of the consuming class in Southeast Asia has resulted in early signs of polarization.Premium retailers such as Jaya Grocer and Village Grocer in Malaysia,Annam Group in Vietnam,and Farmers M
37、arket and Ranch Market in Indonesia have enjoyed increased demand.So far,discounters have only made limited inroads given the strong presence of traditional trade among more price-sensitive consumers.Exhibit 2Disruption is influencing the shape of the grocery industry across Southeast Asia.Indonesia
38、Observed at scaleRise of small formats(minimarkets or midsize supermarkets)Polarization of the industry,with emergence of premium and discount playersDisproportionate expansion into smaller cities or nonurban areasRise of e-grocery players challenging brick and mortarEcosystems restructuring consume
39、r loyalty and expectationsRejuvenation of traditional retail through electronic B2B(eB2B)platformsPhilippinesVietnamThailandMalaysiaSingaporeSoutheast Asia.Early signs observedLimited evidence observed7State of Grocery Southeast Asia3.Rural expansion.The expanding consuming class outside of core urb
40、an areas portends faster expansion in rural areas.This demand could give rise to a new competitive set.For example,Vietnamese players Lan Chi Mart and Bch Ha Xanh built their market share outside of main city centers and helped to redistribute the markets revenue pool.In Indonesia,leading minimart r
41、etailers have captured market share in rural areas and tier-two cities.4.The growth of e-grocery.E-grocery retailers have captured a limited share of the market to date,but they could rapidly challenge established players.Retailers own websites and those of aggregators(for example,GoMart,GrabMart,Pa
42、ndamart,and Shopee Supermarket),as well as social commerce,are on the rise.Social commerce can take many forms,including platforms specializing in group buying,social-media networks integrating sales mechanisms,and smaller sellers communicating directly with customers via chat features.Many retailer
43、s are also using dark stores3 to accelerate delivery speed and support the rise of quick commerce(delivery within a couple of hours or even minutes).5.Consumer behavior strategies.Loyalty and ecosystem strategies have emerged as a powerful force in some markets and are reshaping consumer behavior.Wh
44、ile retailers continue to own their consumer databases and innovate to develop stickier relationships,consumer goods companies are also participating in retail to build their ecosystem.Direct-to-consumer strategies(both online and offline)have emerged as a clear trend.For example,TH Group and Vinami
45、lk are experimenting with physical retail in Vietnam.6.Electronic B2B(eB2B)platforms.Several Southeast Asian markets are witnessing the rise of eB2B platforms,4 which help shore up the competitiveness of mom-and-pop stores.This evolution,particularly prevalent in countries such as Indonesia,can slow
46、 the rise of modern trade,especially in rural areas.Charting a path to profitabilityThe dynamism of the grocery industry is only half the story.Retailers also need to focus on costs,margins,and operating models(Exhibit 3).From 2010 to 2019,most ASEAN retailers focused on grabbing a share of the mark
47、et and riding the tailwinds of modern trade growth.For all the momentum in ASEAN grocery,however,profitability has proved elusive and inconsistent across formats(Exhibit 4).Indeed,while championing 3 Brick-and-mortar locations that serve as distribution outlets and are not open to visitors.4 “Digita
48、l disruption:The rise of eB2B in fragmented retail,”McKinsey,January 14,2022.8State of Grocery Southeast AsiaExhibit 3A grocery stores profit-and-loss ratio varies by concept and market,driven largely by labor,logistics,and rent costs.Operating proft breakdown,%sales SalesCost of goods soldCost of i
49、nventory and materialsInfuenced by contract with suppliers(usually better with scale)The biggest components:store personnel,logistics,rent,and utilities;other costs:marketing,IT,and overheadDriven by operational efciency and the expansion planPrivate-label products usually enjoy higher gross margin;
50、a higher mix of private-label products vs a supplier-driven portfolio is better for retailersInfation and supply chain disruptionInfation and supply chain disruptionInfation and supply chain disruptionGross marginOperating expendituresOperating marginKey driversPost-COVID-19 pressurelargely by labor
51、,logistics,and rent costs.6590100different formats has accelerated the growth of retailers jockeying for position in the marketplace,they still find it difficult to turn a profit.A case in point:many hypermarkets in Indonesia and some convenience-store chains in Malaysia and Vietnam still
52、 do not break even.Recent macroeconomic developments,such as rising inflation and frequent supply chain disruptions,are putting additional pressure on formats that have yet to reach scale in specific countries,such as convenience stores in Vietnam.Among grocery retailers,the traditional single-minde
53、d pursuit of growth and scale shows signs of shifting,with some retailers bucking this trend.For example,Co.op Mart in Vietnam,AEON in Malaysia,and Puregold in the Philippines have managed to sustain annual operating profits over time.Their success is due in part to their long-standing operation in
54、the market,which enables them to focus on controlling costs,determining a suitable profitability equation,and negotiating with suppliers from a position of strength.Emphasizing operational excellenceWe expect retailers to take further action to achieve profitability through a greater focus on operat
55、ional excellence,in which the store network is a large component.Our analysis indicates that two areas have the potential to capture net cost savings totaling around 8 to 12 percent of revenue.First,assessing end-to-end 9State of Grocery Southeast Asiastore operations can eliminate non-value-added w
56、ork,automate labor-intensive tasks,and optimize the operating modeleven in markets where the cost of labor is relatively low.Second,retailers can rationalize their store network and reduce overall real-estate costs while identifying underpenetrated areas in which to build or buy stores.For example,b
57、etween 2017 and 2019,Vietnams VinCommerce opened nearly 1,000 outlets annually,including both its supermarket and minimart formats.However,after Masan acquired the company in 2019,750 outlets were closed,and VinCommerces supply chain was revamped to break even by fourth quarter 2020.In addition,reta
58、ilers should actively review commercial terms with suppliers to design a profitable portfolio,including finding a balance for the space of their own brand in each category.Retailers have become more willing to aggressively push suppliers to offer larger discounts(including in the back margin)and mov
59、e to new vendors if their prices arent met.In addition,they have been more proactive in putting together teams of category leaders to make tough decisions on specifications,demand,and costs to drive this effort.Increasingly,leading retailers are paying even more attention to structural costs such as
60、 rent,indirect procurement,and payroll.Retailers can form creative partnerships to address these areas.For example,Alfamart collaborated with Pertamina to develop Bright Store,a Malaysia3.22.074%4.02.10228%4.02.09.085%1.0 to5.02.05.085%4.010.73.091%5.00.90100%3.06.03.37.073%4.010.00.41.099%6.0Hyperm
61、arketSupermarket and O2O1Convenience store or smaller formatVietnamIndonesiaPhilippinesThailandSingaporeMarket size 2020,$billionsProftabilityMarket growth,201620 CAGRConsolidation,%share of top 3 2%3.239.090%43.0 to5.00.418.074%5.01.33.090%0 xxxxxxxx1Ofine to online.2Growth still exists in certain
62、segments,such as premium supermarkets.3Subscale market.4The defnition of supermarkets can fuctuate over countries.For example,Vietnams defnition includes Bch Ha Xanh(BHX)and Vinmart+(small formats that could be considered minimarts).Conversely,the supermarkets in the Philippines include relatively l
63、arge formats.Source:Euromonitor(retail sales value,including tax and year-over-year exchange rate),2021Market momentum is inconsistent across store formats.Exhibit 4Market momentum is inconsistent across store formats.10State of Grocery Southeast Asiaminimart concept in gas stations that makes use o
64、f Pertaminas existing real estate.Across operational-excellence levers,digital transformation is critical to achieve profitability.Retailers need to consider how they can harness emerging technologies and rich,granular customer data to transform the in-store customer experience and the efficiency of
65、 store employees.Making progress on the digital journey can have a pronounced impact.Stores that are already profitable could double EBIT margins,with the added benefits of improved customer experience,better employee engagement,and an easier-to-run store(Exhibit 5).For stores that have yet to break
66、 even,the strategic use of technology and a thorough diagnostic can speed the journey to profitability.Source:Future of retail operations:Winning in a digital era,McKinsey,January 2020Properly implemented technology can double store proftability in grocery.Current EBIT margin24%24%12%12%59%0.51%23%L
67、abor headwinds20%increase in minimum wage and benefts increasesWarehouse-to-shelf automation,next-generation cameras,and supply chain optimizationReduction in shrink by 20%from advanced analytics10%reduction in store-management and SG&A costsUse of in-store assets to drive sales(electronic shelf tag
68、s and consultative selling tools)Each retailer will decide what portion of EBIT to reinvest in pricing and customersIncrease of 3 to 5 percentage pointsIn-store labor automation and roboticsInventory managementBack-ofce automationCustomer experienceFuture EBIT margin potentialExhibit 5Properly imple
69、mented technology can double store profitability in grocery.11State of Grocery Southeast AsiaTo achieve growth and profitability simultaneously,retailers must take a wide range of variables into account,including market dynamics,the competitive landscape,and format types.Continued disruptions will m
70、ake the task even more difficult.Yet by maintaining a laser focus on changing customer preferences in different markets and promoting operational excellence,retailers can make progress on both fronts.Matthieu Francois is a partner in McKinseys Ho Chi Minh City office,Clarence Lew is an associate partner in the Singapore office,An T.Nguyen is a consultant in the Hanoi office,and Hai-Ly Nguyen is an associate partner in the London office.Copyright 2022 McKinsey&Company.All rights reserved.