1、When winter comes, prepare for spring Post COVID-19 global consumer market outlook and supply chain reshaping May 2020 2 Consumer market outlook Reshaping future supply chain trend and strategy 12 3 1. Consumer market outlook 4 Before COVID-19: World consumption growth was mostly driven by the US an

2、d China, followed by India and Japan 1 Global consumer trend before COVID-19 How key markets consumption moves post COVID-19 will shape future global consumption trend 1Year on year retail sales growth over total top 10 retail sales growth (%) Sources: EIU, IMF; Kearney analysis Retail sales of top

3、10 consumption countries (20042019E, $ billion) YoY retail sales growth contribution1 (%) 3,500 500 0 1,000 2,500 2,000 1,500 3,000 4,000 4,500 2011 2018 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2019E US China Brazil Japan UK India Germany France Russia Italy 40 28 19 22 57 1

4、8 30 27 33 52 54 11 19 40 18 15 1 22 -1 0 2 5 2 4 -14 4 -7 7 -2 20182008 5 5 2 -2 2016 -5 3 -2 0 5 5 9 2017 5 7 -6 -6 3 2 2019E2005 5 6 US China Japan Germany India France UK Italy 5 5 Before COVID- 19： What we are used to A. Trading online B. Trading globally C. Individual centric 1 Global consumer

5、 trend before COVID-19 Source: Kearney: The Consumer Goods Forum Global Summit report 2017 6 6 A. Moving online E-commerce as % of total retail sales (20142019) 1 Global consumer trend before COVID-19 0% 5% 10% 15% 20% 25% 30% 2001720182019 Western Europe Japan World South Korea China Ger

6、many UK Eastern Europe Australasia Asia Pacific Latin America France MEA1 US 1Middle East and Africa Sources: Passport; Kearney analysis China, South Korea, Japan, and Asia lead in the online trend The US and Western Europe are moving at a slower pace Much of the rest of the world is still in nascen

7、t stages 2% 5% 7% 9% 10% 10% 11% 12% 13% 15% 18% 18% 28%28% 7 7 B. Trading globally 1 Global consumer trend before COVID-19 38% 61% 59% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 1985 2003 1989 1986 2014 1998 1987 2012 1988 52% 1992 1990 1991 2013 1993 2010 199

8、7 2006 1995 1996 1999 2000 2001 2002 2004 2005 2007 2016 2008 2009 2011 2015 2017 2018 1994 Sources: World Bank; Kearney analysis Global trade % of global GDP (19852018) There has been a long globalization movement since the 1980s But the world globalization trend has been stagnant since 2008 8 C. I

9、ndividual- centric influence model is becoming the global trend SeductionScaleAffluence 1 Global consumer trend before COVID-19 Source: Kearney: The Consumer Goods Forum Global Summit report 2017 Trust Authenticity Efficiency Social conscience Responsibility Self-expression 1 2 3 4 5 6Individual- ce

10、ntric influence model Core values of consumers 9 9 The impact of COVID-19 on the economy is still uncertain Recovery scenarios V V-shape: Quick recovery Uor W U- or W-shape: Severe 2020 impact, 2021 recovery L L-shape: 18-month downturn, prolonged global recession Experience of SARs 2003 2 Global ma

11、croeconomic outlook Experience of financial crisis 2008 Experience of economic recession 1930s Source: Kearney global study 1010 Low international cooperation High international cooperation High social cohesion Low social cohesion Scenario 4: “To have and have not” High international cooperation Low

12、 social cohesion Scenario 1: “A moveable feast” High international cooperation High social cohesion Scenario 2: “The sun also rises” Low international cooperation High social cohesion Scenario 3: “For whom the belltolls” Low international cooperation Low social cohesion 2 Global macroeconomic outloo

13、k How the world works on it will shape the future of the world Sources: Oxford Economics, Kearney analysis 1111 Average 2.0% Look forward, prepare for difficulties and uncertainties Global economic output, 20072022 (YoY percentage growth) 2 Global macroeconomic outlook Sources: IMF; Kearney analysis

14、 -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% -1.1% 4.4% 200820092007 2.2% 4.2% 2010 3.5% 2011 2.8% 2012 3.1% 2.8% -3.5% 2013 3.2% 20142015 2.7% 2016 3.3% 2017 3.2% 2018 2.6% 20192020E 6.4% 2021E 3.8% 2022E Forecasts are continually changing 12 Two new trendsFour accelerated trend

15、s Source: Kearney global study 3 Global consumer trend post COVID-19 Post COVID-19: What are long- term impacts on consumers? C. Health and wellness 2.0 D. More differentiated consumers B. Purpose-driven consumption A. E-commerceE. In-home becomes the new out-of-home F. Value focus 1313 A. Consumers

16、 will be more open to e- commerce post COVID-19 Would you do more e-commerce vs. in-shop purchasing? (% of respondents) 3 Global consumer trend post COVID-19 Sources: Ipsos; Kearney analysis 13 17 22 10 1414 12 16 434343 30 33 30 2727 AustraliaRussiaFranceUKItalyUSCanadaJapan +30+26+21 +20 +19 +16 +

17、15+11 March 1214April 1619 Consumers acceptance of e- commerce has increased substantially in the past two months 1414 A. but at a different pace 1United Arab Emirates 2Middle East and Africa Sources: Passport; Kearney analysis E-commerce as a % of total retail sales (2019) 28.2%28.2% 18.0% 15.2% 13

18、.2% 11.7% 10.7% 10.5% 9.8% 9.1% 7.0% 4.6%4.9% 1.7% China Asia Pacific South Korea UK Western Europe World UAE1 US Germany Australasia France Japan East Europe Latin America MEA2 18.3% -26.5% 3 Global consumer trend post COVID-19 Asian countries such as China will move from Internet 2.0 to Internet 3

19、.0 (for example, explore online/offline integration and new business model) Europe and America may move from Internet 1.0 to Internet 2.0 (getting used to more e-commerce) Other underdeveloped countries may enter Internet 1.0 (more acceptance of e- commerce) Selected country Region Internet 3.0 Inte

20、rnet 2.0 Internet 1.0 1515 A. “Touchless” and unmanned service has gained more opportunities 3 Global consumer trend post COVID-19 Perfect Diarys makeup artists all turned into anchors during the pandemic, and they sent live messages to customers through the community. In February, the number of vie

21、wers increased by 310 x compared to January. In Wuhan, Ele.me (a leading food delivery platform) cooperated with community convenience stores to set up a fresh convenience store to encourage self-collection in the community. Starbucks members can use the Coffee Express function to order online. Afte

22、r receiving the pick-up notification on their mobile phone, customers go to the store, present their “fetch number,” and pick up their order from the “Coffee Express” dining counter. Hemas daily sales in mature markets doubled year-on-year, even in some market segments the premium fresh food model h

23、as been verified. Perfect Diary Ele.me Starbucks Hema China example Sources: Public information; Kearney analysis 16 B. Purpose-driven consumption is accelerating globally Note: April 2020, N=1,006 participants Source: Kearney Proprietary Survey 3 Global consumer trend post COVID-19 Who do you curre

24、ntly trust when making decisions about products? Respondents indicated they trusted brands and companies more than government authorities or the news RankDescription% of respondents 1Recommendations from friends and family46% 2Your doctor/personal medical professional44% 3Doctors/medical professiona

25、ls (for example, on TV, online)37% 4Scientists30% 5Brands and companies30% 6Government authorities (for example, CDC)24% 7Your pharmacist22% 8Social media you visit/use14% 9Your governor14% 10The president13% 11Newscaster/news reporting that you listen to11% 12Social media influencers10% 13Your mayo

26、r5% 17 B. Consumers are recognizing brands for their contributions to society During this crisis, what are characteristics of brands that have distinguished themselves in a positive way? RankDescription% of respondents 1Manufacturing/researching needed products (masks, ventilators)15% 2Availability

27、of goods13% 3Making a difference/giving back to society13% 4Safety measures13% 5Customer care13% 6Quality of goods/service11% 7It is an essential good/service11% 8Deferring payments/offering free or discounted services9% 9Educating the public/providing accurate information7% 10Treating employees wel

28、l/hiring extra workers7% 11Delivery/online presence7% 12Good reputation/reliable6% Notes: April 2020, N=853 participants. Not shown: Characteristics with response rates under 5%, including Open for business, Affordability, Helping people stay connected/entertained, Popularity, Proximity/ease of use,

29、 Authenticity Source: Kearney Proprietary Survey 3 Global consumer trend post COVID-19 18 B. though social responsibility could mean different focus in different countries Accelerating behaviors in different countries UN Sustainable Development Goals (SDG) Index (2019) Developed countries are more i

30、nterested in recycling and resource sustainability (for example, meat- free) 3 Global consumer trend post COVID-19 Developing countries will focus more on wild animal protection and environmental protections Sources: United Nations SDG index 2019; Kearney analysis 81.581.1 79.478.9 75.8 74.5 73.2 70

31、.9 70.6 61.1 China US Brazil Germany France Japan UK Russia Italy India Retail sales rank 65831012794 SDG index rank 46557115 Common gap in life on land, life below water, health, and responsible consumption Common gap in responsible consumption 1919 C. Health and wellness 2.0: consumers

32、will look for healthier products 3 Global consumer trend post COVID-19 Sources: Ipsos; Kearney analysis Will you seek out products that are healthier? % Strongly agree + Somewhatagree 91%91% 86% 85%85% 83% 80% 79% 76% 75% 72% 70%70%70% 65% Worldwide Switzerland Mexico Russia Brazil India Italy Spain

33、 France Canada Japan Australia UK US Germany 2020 C. Hygiene and immunity are becoming consumption priorities 3 Global consumer trend post COVID-19 Rapid growth in all markets, especially in the affected countries +162% Multivitamin +582% Liquid antiseptic +145% Wet wipes Italy Vietnam Singapore +78

34、% Mouthw ash +45% Personal wash +35% Toilet paper +29% Hand soap +24% Thermo meters +112% Pharma hygiene Value sales change % vs. average (February 2019) Sources: Nielsen; Kearney analysis Selected countries 2121 D. A more differentiated consumer world： different segments react differently to COVID-

35、19 Food and beverage example 3 Global consumer trend post COVID-19 1Out-of-home Source: Kearney analysis Sarah Lancashire Gen Z, 19 years old Single Student From price-competitive supermarket to online Essential to improved diet, natural products Reduced alcohol consumption James London Zone 4 Mille

36、nnial, 35 years old Married, 1 baby Lawyer From convenience-focused to online Health consideration to immunity focus From regular visits to food markets to increased cooking at home, reduced OOH1 Peter Central London Gen Z, 25 years old Single Tech start-up From online shopping with large retailer t

37、o local supplier (fresh and vegetables) From premium products to fewer fads, focus on trusted brands Daily lunch next to office to reduce OOH consumption Jo Brighton Gen X, 43 years old Married, 2 young teens Runs design agency From premium grocery with brand focus to private label From focus on con

38、venience foods to greater attention to ingredients Buy wine online instead of at Lidl Tom Sunderland Gen X, 40 years old Married, 3 young children Car factory line manager From local Tesco to discounter From mainstream brands to private label From premium beer and pet food to reduction of non- essen

39、tials (for example, beer, snacks) Linda Surrey Baby Boomer, 65 years old Married, 2 grown children Retired From premium grocery store to online Price conscious with high mix of private label to support local retailer despite higher price New dog, new pet category spend 22 E. Traditional activities a

40、re moving to online 3 Global consumer trend post COVID-19 Work at home - Video conference at home Event at home Berkeley 2020 virtual graduation ceremony on Minecraft Concert at home WHO “One world: together at home” online charity concert Shopping at home - Live streaming shopping Sources: Public i

41、nformation; Kearney analysis 2323 E. Paradigm shift will boost unpenetrated “in-home” consumptions 3 Global consumer trend post COVID-19 Home entertainment Need for electronic equipment and accessories related to home work and home entertainment is increasing: Mobile phone and accessories Video game

42、s and accessories Home casuals Increasing work-from-home concept, stimulates the demand for comfortable dress: Casual shoes Pajamas Home cleaning Greater attention to immunity and hygiene, increasing needs for safe products: Clothing cleaning Home and kitchen cleaning Source: Kearney analysis 2424 F

43、. Consumers are more value focused and concerned about individual finances 3 Global consumer trend post COVID-19 Note: Survey conducted from March 1921, 2020; n=10,000 Sources: Ipsos; Kearney analysis 54% 55% 36% 35% 31% 45% 55% 45% 49% 32% 50% 35% 38% 45% 5% 22% 33% 21% 49% 22% 15% 28% 25% 58% 37%

44、45% 43% 37% 5% 6% 4% 4% 4% 3% 8% 11% 11% 17% 6% 19% 10% 11% 10% 7% 5%5%7% 31% 10% 15% 21% 10% 12% 19% 12% 14% 5% 4% 11%11% 10% Germany 2% Australia 2% 2% FranceCanadaItaly 2% Japan 1% 2% RussiaUKUS 4% 1% Viet nam SwitzerlandIndiaBrazil 1% Mexico 100% Primarily financialDont know or not statedLess co

45、ncernedPrimarily healthFinancial and health Consumers concern: financial, health, both, or less concerned （%, March 1921, 2020） 25 F. But that does not mean value brands will win automatically GM provided more options to respond to consumer needs Ford insisted on one- size-fits-all “T” model Low cos

46、t but no differentiation Mass production One color (black) 3 Global consumer trend post COVID-19 NecessitiesFashion product Multiple brands Different colors Different models Ford and GM example GM gained popularity by launching a series of new models, Ford lost the leading position to GM in the 1930

47、s Sources: Desktop research; Kearney analysis 2626 F. We expect to see more “mass luxury” and “decent value” brands Muji example Unique positioning as “No Brand Quality Goods” is reinforced by its quality design Best becomes enough for value consumers who want tasteful yet affordable products 3 Glob

48、al consumer trend post COVID-19 Source: Kearney analysis 2727 F. Trading down to private label Sales of private brands jumped by double digits in 2020 Q1 as US consumers stocked up on groceries and daily essentials during the initial phase of the coronavirus pandemic In Q1 private-label dollar sales

49、 climbed by 4.1% and unit sales by 2.3% across all US retail outlets -5560% -7580% -2530% -3540% +1015% -2025% YoY US category shifts (March 2020) People are buying more groceries during the crisis, and will turn to private-label products due to the relatively high share of private-label products The future growth will include other product categories as consumers gain trust of private- label brands Sources: Private Label Manufacturers Association (PLMA), Nielsen; Kearney analysis Travel Shopping Transportation Restau