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  • Shift in the Indian Shopping LandscapeThe dramatic shifts in Indias retail landscape have created an unprecedented view of what the future shapeof consumption in India will look like. Driven by a surge in the number of Indian shoppers experimenting withnew formats, Modern Trade has firmly taken its place in the Indian marketplace. However, the opportunity togrow even further is tremendous. A simple comparison with other developed and emerging economies in Asiaindicates room for a manifold increase in Modern Trade density. With a modest six Modern Trade stores permillion consumers, even matching the pace of countries like Thailand and Indonesia points to an inflectionpoint that is yet to occur. Contrasted with the density for Traditional Trade outlets (at approximately 7000stores per million), the lower density of Modern Trade is poised to change.

    Understanding IndiasNew Breed of Shoppers

    By: Adrian Terron, Executive Director, Retail & Shopper Manoj Kulkarni, Director, Retail & Shopper

    Nielsen Featured InsightsDelivering consumer clarity

    Copyright c 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The NielsenCompany.

    n A fifth of urban Indian shoppers now shop regularly at Modern Traden Uptick in deal-seeking behaviour, over half of shoppers now seeking promotionsn A third of shoppers choosing bulk packs as a strategy to beat price rise

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  • Modern Trade in Urban India poised for rapid growthA closer look at the more relevant markets that possess Modern Trade, are an interesting laboratory toobserve the continued rise of the Modern Trade shopper. In the 17 key markets that account for three-fourth of Indias Modern Trade sales, each citys Modern Trade presence has been witnessing high double-digit growth rates, with the share of modern retails contribution to sales exceeding a fifth of total sales onan average.

    Footfalls to Modern Trade outlets spikeIndias shoppers are clearly headed towards the next super or hypermarket. A comparison of long termtrends and a study of shopper behaviour reveals that the number of shoppers who visit Modern Trade on aregular basis, has doubled over a five year period. And they are not simply strolling through the air-conditioned aisles they are purchasing more than ever before as well. Today, over a fifth of shoppers(21%) claim that they spend more at Modern Trade than traditional trade compared to just 12 percent fiveyears ago.

    Copyright c 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The NielsenCompany.

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  • Copyright c 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The NielsenCompany.

    MT dominates the share of walletWith 18 percent of urban shoppers now regularly shopping at Modern Trade according to NielsensShopperTrends study, the longest running study of the Indian shoppers evolution, this signals astabilization of shoppers who spend a majority of their money within Modern Trade. These visits havebecome a part of the regular buying cycle for Indias new breed of urban shoppers who have nowhabituated to the modern trade environment and will continue to drive its adoption through thedemonstration effect. This is clearly seen by the proportion of shoppers who claim to shop at ModernTrade occasionally, growing over the last year from 54 percent in 2011 to 66 percent in 2012.

    The Deal-seeking ShopperOne of the key attitudinal and behavioural changes noticed is more deal-seeking behaviour amongst theemerging Indian shopper. The proportion of shoppers actively seeking offers in the stores they frequent hasshot up from 39 percent to 54 percent marking a sudden affinity for promotions at a time when shoppersare price sensitive and retailers and have succeeded in creating deal-weeks as annual events that cater toa growing breed of bargain seekers.

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  • Copyright c 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The NielsenCompany.

    Deals are now a Big DealThis shopping behaviour is also manifest in a macro-analysis of branded packaged FMCG sales across thecountry. Today, an estimated one in six rupees spent on FMCG products is spent on items that are on offer.These offers may vary in nature and entice shoppers with additional volume for the same price, pricediscounts, kind offers such as free gifts or a combination of these promotional tactics. Marketers nowhave the opportunity to see how this varies by category and more importantly, by geography to developstrategies specific to varying and heterogeneous shopper segments.

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    Bulk buying to beat inflationDeal seeking is now combined with a growing preference for bulk packs acting as an important strategy toneutralize the impact of rising prices. 35 percent of Modern Trade shoppers today cite buying bulk as theirresponse to rising food prices. The percentage of those adopting this within Traditional Trade issignificantly lower at 29 percent. This also highlights the ability of organized retail to drive growth of themonthly purchase basket and a shift towards larger quantities.

    The Impulse & In-store stimuli factorThe underlying change occurring amongst shoppers is where the real opportunity lies. Analyzing shopper-speak tells us that while a majority of purchases are planned, a significant proportion is based onreminders at the point of sale and based on in-store stimulus and impulse. Extrapolate these numbers toFMCG spends and it draws up a hypothetical opportunity of nearly USD seven billion of sales that havethe opportunity to be influenced in store. Even for the most successful brands in their categories, this canrepresent an opportunity to win over competitors and signal a vulnerability that can be exploited by morenimble competitors.

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    SEC C Shoppers Increasingly Adopting MTThe allure of modern retail and its ability to offer a vast variety of options is not restricted to the upperSEC anymore. Mapped over a half a decade, while upper SECs have stabilized in terms of the proportionvisiting Modern Trade, so too has the number of shoppers from SEC C. Juxtaposed with the fact that thereare a growing number of occasional shoppers walking into modern retail, this explains the crowdedshopping aisles across the country.

    Copyright c 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The NielsenCompany.

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  • 7Copyright c 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The NielsenCompany.

    About Nielsen

    Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leadingmarket positions in marketing and consumer information, television and other media measurement,online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence inapproximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. Formore information, visit www.nielsen.com

    Emergence of a Cross-Over ShopperAll these factors have led to a sizeable proportion of Crossover Shoppers shoppers who flit betweenmodern and traditional formats. When the spends of these shoppers are analyzed by looking at how theyclaim they split their spending across formats, even a single percentage of spending transferred to modernretail across meta categories such as packaged foods, home care and personal care, translates into aquarter of a million dollars that Indias modern retail could gain.

    The implications of these changes and opportunities are clear for marketers who want to reenergize theirstrategies. Merely understanding consumers in a generic manner will no longer be a complete method ofconverting insight into marketable opportunity. Developing a thorough and ongoing appreciation of theshopper decision journey along the path to purchase and all the extrinsic and intrinsic factors influencingit, will be a critical element in the marketing mix. Mapping the present and prospective shoppers for yourbrand across various retailing environments will be a necessary precursor to converting demand into sales.

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    an uncommon senseof the consumer.TM

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