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Franchise International Malaysia: SEA Franchsie Industry Trends 2015

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

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Franchise International Malaysia: SEA Franchsie Industry Trends 2015

  1. 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. 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. 3. Economy and Market Overview
  4. 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. 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. 6. The Growth and Opportunities of Franchise Sector in AEC
  7. 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. 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. 9. Current and Future Trends in Food and Beverages
  10. 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. 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$+14.1% Industry Revenue
  12. 12. THAILAND: CURRENT AND FORECAST TREND IN FOOD & BEVERAGE 12% 24% 19% 15% 30% everyday 1-2 times a week 2-3 times a week 3-6 times a week seldomly eat out Bangkok South East Central North West Northeast 45% 22% 16% 6% 5% 3% 3% Thai consumer Eating out Behavior Restaurant Establishment 13,85613,413 124,712120,721 +3% +3% FOOD Restaurant Outlet FOOD Quick Serves Outlet 22.8 Bn US$ 26.1 Bn US$+14.4% Industry Revenue
  13. 13. SINGAPORE: CURRENT AND FORECAST TREND IN FOOD & BEVERAGE 5,0074,815 22,399 21,333 +4% +5%FOOD Quick Serves Outlet FOOD Restaurant Outlet 8.3 Bn US$ 8.7 Bn US$+4.6% Industry Revenue Street Stalls, hawker foods, Fast food outlets 81% Restaurants/cafes 67% Friend’s House 6% Other 2% Where do you most Commonly eat Food when you are not at home? 30% 3 times a week or more less than a month 22% 10% a few times a month once or twice a week 37% How often do you dine out?
  14. 14. Current and Future Trends in Wholesale and Retail
  15. 15. INDONESIA: CURRENT AND FORECAST TREND IN WHOLESALE & RETAIL Types and Number of Retail Stores in Indonesia (2014) 2.5 mio STORES Traditional Retail Modern Retail (Minimarket) Modern Retail (Supermarket) 13,000 STORES 11,000 STORES Number of Modern Retail Stores(2004-2014)“In average, the amount of modern retail stores has 17.57% annual growth in the last 10 years.” +40% 468,809 20162013 335,024 RetailsalesinMnUS$
  16. 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. 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. 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. 19. Leading Players for F&B, Retail, and Personal Services
  20. 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. 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. 22. Market Attractiveness for Malaysian Franchise
  23. 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. 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. 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

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