KPMG - Consumer Currents-09-dec-2010

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Unformatted text preview: Consumer Currents Issue No. 9 / December 2010 Issues that are driving consumer organizations worldwide In this issue: • Fonterra: The Challenge of Being Different • Get Ready for India’s Consumption Boom • Getting to Grips with Illicit Trading • Carrefour: The Evolution of an International Brand Image • Mobile Commerce is Here, Now • Prepare Now for the New Revenue Standard 2 ConsumerCurrents 09 Introduction Welcome to the ninth issue of ConsumerCurrents, KPMG’s monitor of key issues affecting decision-makers in retail and consumer businesses around the world. Our intent for this magazine is to provide our readers with insights on new research and commentary related to the trends that are driving and shaping the consumer markets industry. It’s an uncertain world. The old reliable drivers of the global consumer industry have gone, yet the new patterns of global consumption have not quite taken shape. This means that consumer companies are having to plan and build for a new kind of consumer economy, without knowing for sure what that new economy will look like. In the mature economies, consumption growth is slow. In these markets where strong sales can no longer be counted on to drive the bottom line, focus has shifted to reducing costs, increasing efficiency in production and supply chains, and of course, competition. The fight for market share in the mature consumer economies is fiercer than ever. In most cases, the winners are big have strong balance sheets – those large enough to benefit from economies of scale in manufacturing, distribution and procurement, and with the powerful brands that have proven their worth in tough times. Willy Kruh Global Chair, Consumer Markets wkruh@kpmg.ca Increasingly, opportunities lie beyond North American and developed country borders. The GDP growth of emerging nations like China and India (projected to be 9.6 and 8.4 percent respectively in 20111), not to mention that of Latin American countries, are part of a new global economic order. These emerging economies are faced with their own uncertainties. Development to date has been largely investmentdriven. Consumer markets companies are fragmented, the share of private 1 T  he Conference Board, Global Economic Outlook 2011, Global Outlook for Growth of Real Gross Domestic Product, 2000-2011 (November 2010). © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 3 consumption in the economy remains small, and profits are modest. Will China and India turn into consumerdriven economies? With a billion new consumers over the next 15 years, that’s what consumer companies hope, but they also realize that change is, of course, constant, and the future is still unsure. This edition of ConsumerCurrents looks in detail at some of these realities shaping today’s consumer economy. Special features include exclusive interviews with two of the largest consumer businesses in the world. New Zealand’s Fonterra is the world’s biggest dairy products company, a cooperative business with its sights set firmly on emerging market growth. But making investment decisions that will generate real profits from China and India is no easy matter, as Fonterra’s CEO tells us on page 4. In this edition we also talk to leading global retailer, Carrefour, of France. Carrefour is another company that has built a large emerging markets business, and who is now turning to the challenge of re-energizing its retail formats in mature European markets. See page 16. The potential of consumer markets in the BRIC (Brazil, Russia, India and China) countries and other emerging economies is universally recognized – but when and how will that potential be released? One the most challenging of the big emerging markets is India, a billion-citizen country where wealth is growing rapidly – but where consumer spending patterns remain very conservative. Yet, there are already signs that this is the past, not the future: on page 8 we look at how far and how fast the Indian consumer is changing. One factor that is certain to influence consumer businesses in both emerging and mature markets is technology. The emergence of a new generation of smart mobile devices is driving major changes in the way that consumers and companies interact. The effects of mobile and internet convergence have long been debated, and now the evidence that convergence has finally arrived on main street is compelling. See page 20. But main street is not the only arena of change. One of the biggest internal challenges that consumer businesses will face in the coming period is a change in how revenue is accounted for, a development that would potentially affect many of the relationships and contracts that consumer companies have with their customers, suppliers, and shareholders. The proposed new approach to revenue recognition has implications for all consumer businesses: on page 24 we discuss what companies can do to prepare. New technologies, more open borders, and more international trade. These are recipes for consumer market growth – yet they are also drivers of illicit trade. The trade in counterfeit, pirated and ‘grey market’ goods is growing, and consumer companies are the losers. Why do so many large businesses seem to lack a coordinated, proactive response to the real threats of damage from what is usually an illegal trade? See page 12. Contents 04 Fonterra: The Challenge of Being Different 08 Get Ready for India’s Consumption Boom 12 Getting to Grips with Illicit Trading 16 Carrefour: The Evolution of an International Brand Image 20 Mobile Commerce is Here, Now 24 Prepare Now for the New Revenue Standard © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 4 ConsumerCurrents 09 Fonterra: The Challenge of Being Different Fonterra is an unusual business. The world’s largest dairy exporter, it remains an unlisted cooperative, and firmly rooted in its home economy of New Zealand – where its sales of US$12 billion account for over a quarter of the country’s exports, and at least seven percent of the country’s total GDP ConsumerCurrents asked Fonterra’s CEO, . Andrew Ferrier, to outline some of the challenges of running one of the world’s largest – yet least visible – food businesses. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 5 We began by asking about the special responsibilities that come with being a very large commodities and consumer business in a rather small economy. Fonterra is the single largest business in a country where the population is less than four and half million, and GDP is only half the size of Hong Kong’s. Andrew Ferrier Chief Executive Officer Fonterra “It’s both a help and a hindrance, says ” Mr. Ferrier. “Being a big fish in a small pond means that you have to operate with a very broad domestic agenda. That can be a distraction when you are essentially a global business – bear in mind that today around 95 percent of our focus is outside New Zealand. But on the other hand, there is nothing like having a real engagement with a sovereign government when you have global trading aspirations. ” As a cooperative owned by its 10,500 milk-farming members in New Zealand, trading milk and milk products is at the heart of what Fonterra does. Yet Andrew Ferrier readily concedes that being a pure commodity trader is not where the company sees its future. He says that for Fonterra to grow its profits, it has to focus on technology-driven, value-added products for business customers and end-consumers. “It’s both a help and a hindrance, ” says Mr. Ferrier. “Being a big fish in a small pond means that you have to operate with a very broad domestic agenda. ” “We have been characterised as a big commodity machine but that is not really fair, he says. “Already a third of ” our output is consumer products. And we have been investing continuously to move upmarket in our main markets, to increase the amount of technology in our consumer products, and to bundle products and services together in our ingredients business. ” The push to add value is reflected in the cooperative’s growth strategy – and Mr. Ferrier says that he is more focused on growing bottom-line profitability than on sales growth for its own sake. “That is why we made the strategic decision in our consumer businesses to stay regional, he says. “Our regions ” are Australasia, Asia, Africa, Middle East and Latin America – those are the regions where we have very established consumer brands and where we have seen over 20 percent compound profit growth over the last few years. ” The fastest growing market for consumer products is Asia, and the fastest growing national market is China. But does that mean that consumer companies should automatically concentrate investment on building consumer brands in China? Mr. Ferrier believes not. “Asian consumers are looking for healthier foods, and dairy products are in the ‘sweet spot’ in such a market, ” the CEO says. “But China is a very expensive market to do business in. Supporting consumer brands is very costly. Competition for prime advertising space is huge. Launching a brand costs hundreds of millions of dollars, and the result is usually a very small share of the market – albeit a large market. ” For these reasons, Fonterra prefers to concentrate on its consumer brands businesses in Asian markets where it has a leading brand position, such as Indonesia, Malaysia, Thailand, and Sri Lanka, while building its Chinese business as a dairy ingredient supplier. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 6 ConsumerCurrents 09 Not that being an upstream supplier is without its risks. In 2008, Fonterra’s joint venture partner in China, Sanlu, was found to be implicated in the supply of tainted milk that resulted in the deaths of at least six people. For Fonterra, which had built a business reputation largely on the quality of their milk, it was a big blow not to only the balance sheet, but also to the cooperative’s reputation, particularly in New Zealand, and to some extent, globally. “What did we learn?” asks Mr. Ferrier. “We learned the limitations of the producttesting technology. We learned that the long-term solution is to farm all your own milk in certain parts of the world. ” “What did we learn?” asks Mr. Ferrier. “We learned the limitations of the product-testing technology. We learned that the long-term solution is to farm all your own milk in certain parts of the world. Our competitive advantage is going to be guaranteed safe milk – and as it happens we are very close to commercializing a technology that measures the total chemical footprint of milk, a new generation of testing. But you have to invest in your supply chain to be safe. So the value proposition is safe, reliable, New Zealand milk now, together with safe, reliable, Chinese milk in the near future. ” Fonterra believes that India, like China, with its similarly enormous and growing population, is another market with considerable potential for individual consumption of dairy products to grow fast. However, clearly cautious about reliance on third parties in extended supply chains, Mr. Ferrier says that the India business is likely to grow using the same model of rigorous control of the supply chain as in China. “India has the largest dairy industry in the world, © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 7 “In New Zealand we are unique. It’s true that you can’t sell a brand just because it is a New Zealand brand, but there are a lot of advantages to being anchored in a supply chain where you are assured access to the highest quality milk. ” but the country is also tremendously fragmented, he says. “We did have a ” joint venture in branded dairy products in India but we sold our interest – and that was only because we did not feel we had sufficient control of the supply chain. ” Meanwhile, Mr. Ferrier believes that there are large bottom-line gains to be made by optimising the supply chain on a global level, beginning with New Zealand. “In New Zealand we are still finding ways to improve our footprint, he ” says. “We have 23 factories in New Zealand, and in the past a factory would have multiple product streams. We have changed that by investing in more specialization, and we have moved logistics from road to rail, and to selected ports, to give us better leverage with suppliers. We are doing the same globally as well – remember we have very significant production facilities in Australia and Latin America, among others. ” But Fonterra remains a New Zealand cooperative, and to Mr. Ferrier that is an advantage. “In New Zealand we are unique. It’s true that you can’t sell a brand just because its a New Zealand brand, but there are a lot of advantages to being anchored in a supply chain where you are assured access to the highest quality milk. There is advantage in being vertically integrated, and of course there is the advantage of your customers knowing that you are not going to suddenly disappear. Our customers know we are going to be there – we are not just another producer. ” © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 8 ConsumerCurrents 09 Get Ready for India’s Consumption Boom India has the world’s second largest population and its economy is growing fast. Yet, unlike China – India’s emerging market rival in terms of growth and size – the country’s middle-class consumption has, until now, grown painfully slowly. What has been holding this growth back, and is this a trend about to change? © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 9 Nandini Chopra +91 22 30 902603 nandinichopra@kpmg.com Nandini Chopra is the Executive Director and Practice Head, Consumer and Retail and Corporate Finance, for KPMG in India. The middle-market economy in India has certainly been growing – just at a rate much slower than one would expect in what is, after all, an extremely fast-growing segment of the population. A visit to Khan Market – the most sought-after and costly retail space in India’s capital, New Delhi – tells the whole story. The street is dusty and only partly paved. Grocery shops and pharmacies compete with fashion outlets and newspaper stalls for space. More goods are stacked high in cardboard boxes than are displayed in windows. Where every Chinese city of size has air-conditioned malls and local versions of Bond Street or Fifth Avenue, India has a jumble of shops, stalls and kiosks that have hardly changed in twenty years. The middle-class economy in India has certainly been growing – just at a rate much slower than one would expect in what is, after all, an extremely fastgrowing segment of the population. This relatively slow pace of growth can be attributed to several dynamics. One, is that India is a very conservative society, characterized by tradition and reluctance to change. Many middle-class families have ingrained buying habits, often shopping for generations for their clothes, jewelry and household goods with the same set of family retailers–many who may not even have a physical store at all. Another factor is the relatively slow growth of Indian disposable income. In 1950, China was poorer than India, with per capita GDP in today’s US dollars of $439, compared to US$619 for India1. Today, however, China has leaped far ahead: according to The Economist, per capita GDP in China 1 2 3 is likely to be US$3,600 in 2010, compared to only US$1,190 for India2. India, where the World Bank estimates 70 percent of the population still lives in rural areas3, is also much less urbanized than China. Urbanization is a powerful driver of personal consumption, as middle- and highincome consumers stock their new homes with all the trappings of urban living, and a lack of urbanization means that an essential driver of the consumer economy is missing. Lastly, Indian foreign direct investment restrictions have restrained the development of consumer culture. Although investment regulations have been lifted in many sectors of the economy, retail investment is still regulated. Recent changes have made it possible for foreign retailers to bring ‘single-brand’ stores to India, however multi-brand retail is still off-limits. This means that supermarket retailers – who increase competition and drive middlemarket consumption in much of the world – are still unable to operate there. Yet, middle-class consumption does seem to be picking up in India – in fact, somewhat faster than expected only a couple of years ago. Modern retail locations such as supermarkets and malls are still conspicuous by their absence in the large cities, however there is plenty of evidence of middleclass spending – as any journey on an Indian train will reveal, the vast majority of people who can afford to travel second class own at least one mobile phone, and often several. ‘ India and China: An Essay in Comparative Political Economy’, IMF, 2003. ‘ The World in 2010’, The Economist. W  orld Bank Indicators at http://data.worldbank.org/. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 10 ConsumerCurrents 09 Confidence is high in India, which sees itself as having weathered the financial storm of recent years exceptionally well. In addition to growth of the economy and rising disposable incomes, the rate of growth of the middle-market also depends on several factors: the development of the retail sector, the level of consumer confidence, the availability of credit, and the size of the working population. As we have seen, organized retail in India is still in its infancy, and is unlikely to have much influence on driving consumption until the sector is liberalized further. The other driving factors, however, are positive. Confidence is high in India, which sees itself as having weathered the financial storm of recent years exceptionally well. Although the Bombay Sensex share index (which strongly influences Indian consumer sentiment) fell sharply following global financial turmoil in 2009, it has recovered equally sharply, and Indian stocks have outperformed stocks such as China’s. The Bombay Sensex is now approximately 15 percent 4 higher than a year ago, in contrast to the Shanghai Composite, currently almost 15 percent lower. And while a recent study4, which looked at middle-class consumer sentiment worldwide between March 2009 and 2010, showed that Indian consumers feel more anxious about their job security and their financial prospects than consumers in any other large country, Indian consumers were most likely to increase their personal consumption in the next year – a result that clearly reflects India’s unique mix of conservatism and optimism. Availability of credit in India is also improving. The Reserve Bank of India reports that credit card growth has been very rapid in the last five years, with outstanding balances rising fivefold over the same period. However, since almost 60 percent of middle- and upperclass chief earners still do not own a credit card (and the levels of A New World Order Of Consumption, Boston Consulting Group, 2010. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 11 outstanding balances for those that do own cards are far below those of comparable emerging economies), this suggests that credit availability has immense scope for growth. Perhaps the most important driver of middle-class consumption growth is India’s demographics. Young working populations drive consumption, and in India, unlike China, the number of workers is rising. According to the Asian Development Bank, India’s working age population is set to grow for the next two decades5, while China’s is set to decline from 20156. This has led analysts to forecast rapid growth of the Indian middle-class and middle-class consumption in Young working populations drive consumption, and in India, unlike China, the number of workers is rising. 5 6 7 the near future. The Indian middle class numbered around 274 million people in 2005, but is forecasted to grow to 600 million by 2020, and to over one billion by 2030.7 India has been slower than China to fulfill its economic potential. Lack of infrastructure, excessive bureaucracy and a long history of resistance to foreign investment have all helped to hinder the growth of a consumer economy. But change is on the horizon–this year the latest smartphones are de rigeur in the posh bars and restaurants of New Delhi and Bombay. So it may not be long before they are de rigeur in the second class carriage too. ‘Key Indicators of Developing Asian and Pacific Countries’, Asian Development Bank, Jan 2002. The Socioeconomic Implications of Population Aging in the People’s Republic of China’, Asian Development Bank, October 2010. Key Indicators for Asia and the Pacific, 2010, Asian Development Bank. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 12 ConsumerCurrents 09 Getting to Grips with Illicit Trading The cost to companies of illicit trading is growing. Whether the costs of counterfeiting, piracy and parallel trading show up directly as reduced profits, or indirectly as loss of reputation, or loss of strategic control of a business, the costs are real and eventually appear on the bottom line. Yet, it seems that many large consumer companies still lack a coordinated and pro-active response to the threats that illicit trade presents. One reason for this lack of focus is that illicit trading embraces many different things. There is counterfeiting – the trade in fake goods. There is unlicensed manufacturing, a specialized form of counterfeiting, typically where a contract manufacturer over-produces goods identical to authentic production, and sells them through unlicensed channels. There is piracy, where mainly digital products are copied and sold without authorization. And there is parallel trade, where authentic goods are sold without the trademark owner’s permission in markets they were not intended for – a trade which in most jurisdictions is not necessarily illegal in itself, although in practice it frequently involves illegality. One thing is certain: illicit trading is growing. According to the most wideranging authoritative survey of illicit trade, the OECD (Organisation for Economic Cooperation and Development)’s continuing study of global counterfeit and pirated goods trade1, the total value of crossborder trade in such goods had reached Figure 1: Counterfeit & piracy more than doubled in seven years US$ 300 bn US$ 250 bn US$ 200 bn US$ 150 bn US$ 100 bn US$ 50 bn US$ 0 bn 2000 2001 2002 2003 2004 2005 2006 2007 Source: Magnitude of Counterfeiting and Piracy of Tangible Products: An Update, November 2009, OECD. 1 Magnitude of Counterfeiting and Piracy of Tangible Products: An Update, November 2009, OECD. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 13 US$250 billion by 2007 more than , doubling since the beginning of the decade (Figure 1). And this figure did not include either domestically produced and consumed products or non-tangible pirated digital products. Counterfeit industrial goods are not unknown, but counterfeit, pirated and parallel traded consumer goods account for most of the trade. The rate of growth in illicit trade appears to have taken consumer companies by surprise – and the great majority of illicit trade does involve the consumer markets industry. Counterfeit industrial goods are not unknown, but counterfeit, pirated and parallel traded consumer goods account for most of the trade. Such consumer goods can range from packs of cigarettes to high-end luxury goods, including goods of considerable technological complexity – several counterfeit Ferrari sports cars, most of them made in Thailand and China, have already been recorded. Why has illicit trade grown so fast in recent years? One reason is that global trade has grown, largely facilitated by the opening of international borders. According to the OECD, the value of world trade doubled between 2000 and 2007 , and the share of counterfeit and pirated goods in world trade also increased in that period. In Europe, the European Union (EU) has grown from 15 to 27 members, opening up trade with economies where intellectual property controls and traditions are weaker than in the western European economies. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 14 ConsumerCurrents 09 Globally, industrial investment in emerging economies in East Asia has increased greatly, creating opportunities for lowcost manufacturers to copy and trade counterfeit branded goods. According to the OECD, during 2000–2007 Asia emerged as the largest producing region for counterfeit and pirated goods. Government regulation also plays a part: one of the unintended consequences of increased regulation of consumer businesses is that every new restriction on legitimate trade offers illicit traders an opportunity. Government regulation also plays a part: one of the unintended consequences of increased regulation of consumer businesses is that every new restriction on legitimate trade offers illicit traders an opportunity. Take the case of tobacco, by value the largest single illicitly traded product type: although tobacco manufacturers do not in general oppose incremental tax increases designed to limit consumption, regulatory controls such as large tax increases and plain packaging rules have the effect of expanding the market for illicit trade. Counterfeit products cut sales for legitimate producers, and can also cause indirect damage through disrupting brand management and through effects on reputation. Further, policymakers do not always recognize that regulation of consumer markets can itself generate illicit trade, while corruption in some jurisdictions means that officials who should be combating illicit trade are actually profiting from it. According to Robin Cartwright, Partner, Strategic and Commercial Intelligence, KPMG in the UK, the costs in lost tax revenues implied by the growth in illicit trade are high and rising. “With estimates of lost government revenue of US$31 billion in the tobacco sector alone, the issue of combating illicit trade should be getting a great deal more attention, he says. ” “Governments need to think harder about regulation, adds Mr. Cartwright. ” “They are losing millions in revenue, not just in the tobacco industry but also on alcohol and indeed any consumer goods that are subject to VAT (Value Added Tax). With these levels of loss, governments should be working much more closely with the consumer industry to eliminate the problem. ” © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 15 With so many issues to contend with, how can consumer companies act to limit the damage that illicit trading may inflict? Robin believes that companies should take a workflow approach, analyzing issues and acting on them in at least three distinct stages. Robin Cartwright +44 20 7311 4592 robin.cartwright@kpmg.co.uk Robin Cartwright of KPMG in the UK, is a Partner, Strategic and Commercial Intelligence. Robin is involved with a number of industry initiatives to address illicit trade, including Project Star, an assessment of the level of counterfeit and contraband cigarettes across the European Union. The results showed that there was indeed a significant mismatch between policy and practice, demonstrating to senior management that the company’s focus on growth was at the cost of compliance with internal standards, with a correspondingly high level of fraud risk. First, the illicit trading issue needs to be identified and quantified: this is the stage where the scale and the impact of the problem are assessed. The starting point for many companies is not certainty that a problem exists, but rather suspicion that it might exist. For example, KPMG firms recently worked with a global tobacco group that needed a way of measuring the scale and impact of illicit cigarette trading. In the absence of any reliable data on the trade, KPMG devised a new methodology designed to picture the scale of the problem across each of the 27 European Union markets, combining market research, econometric modeling, market analysis and expert interview programs. The impact analysis of this data included assessments of reputational as well as financial risk, a review of the regulatory environment, and an assessment of how stakeholder interests are affected by the issue. And finally, companies need to find and implement solutions. When it comes to combating illicit trade, solutions will often have to be collaborative: in recent projects KPMG firms have worked with external agencies such as the EU Commission’s Anti-Fraud Office, as well as police and customs authorities. Companies may also have to explore solutions in collaboration with suppliers and distributors. Secondly, companies need to review their current position on meeting the problem. In one recent example, KPMG worked with a global consumer products company to review whether the company’s own processes were contributing to fraud in procurement, sales and marketing, and thus helping to generate illicit trade. KPMG member firms reviewed all these functions to assess adherence to internal standards: the project involved meetings with management teams and operational staff to discover whether sales and procurement were actually being run in line with policy, as well as detailed testing for selected suppliers and distributors. And as so often is in business, challenges can be turned into opportunities. In another recent example, KPMG firms worked with one of the world’s largest consumer products groups to create a ‘track and trace’ system that would allow any individual product to be authenticated anywhere in the production and distribution system, reducing the levels of counterfeit products in world markets. In the second phase of the project, a JV (joint venture) partner was identified to take this solution to market and commercialize it for other brand companies facing similar challenges. These approaches are designed to help companies confront a business challenge that is growing much faster than anyone could have forecast only a few short years ago. For consumer companies this is one of the many dimensions of globalization – globalization that has greatly expanded consumer markets and created enormous opportunities for investment and trade, but which has also brought with it a dark side of organized illegality that stretches around the world. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 16 ConsumerCurrents 09 Carrefour: The Evolution of an International Brand Image With 475,000 employees, more than 15,000 stores and four main retail formats – hypermarkets, supermarkets, hard discount and convenience stores – Carrefour Group (the Group) is among the largest retailers in the world. After its continuous global expansion in the 1990s, the Group is now focusing on the transformation of its European operations and on strengthening its position in growth markets. “We are very successful in South America and China, says Alexandre Falck, Executive Director, Supermarkets ” France, for Carrefour, and a member of the company’s Executive Committee. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 17 In France, the Group has achieved, in the past 18 months, a spectacular conversion of 1,000 supermarkets to the ‘Carrefour Market’ brand, while increasing its revenues by 10 percent. This banner change is part of an operation that aims to group different brands under the Carrefour brand name. This ‘convergence policy’ goes beyond harmonizing catalogs, private label products and advertising campaigns. The aim is to regroup all brands under the roof of the historic ‘Carrefour’ brand name and create a resurged form of the current brand image. Alexandre Falck Executive Director, Supermarkets France, Carrefour Group Brands carry with them timelessness, love, passion, and sometimes, contempt. For Mr. Falck, “Everything starts with the brand. In the past, the few letters that were displayed above the entrance of a shop were not considered to be a differentiation tool. Location, store access, knowledgeable staff, variety of products, price positioning, and how quickly a store can bring new innovations to the shelves, all remain key elements of the success of a store, however, are no longer enough. We have progressively realized that the name above the store entrance means more than just a name to the consumer, and that brands carry with them timelessness, love, passion, and sometimes, contempt. We discovered that the emotional content of a brand was capable of triggering a reaction such as, ‘I want to go shopping!’” The French Example The Carrefour Group has grown mainly by acquisition and as Mr. Falck recalls, “at the beginning, changing brand names was simply for administrative reasons. ” The discovery of the importance of the brand name was therefore mainly empirical. Forty years after its creation, “Carrefour continues to work on the warmth that was intentionally brought to its brand name to maintain and develop its popularity, says Mr. Falck. ” For example, the Champion supermarket stores that were acquired by the Group had a neutral proximity brand image. Their transformation was exemplary. “We started three years ago with seven stores located in a highly competitive area in the West of France. We changed the brand name, the uniforms, the store layout, and the product lines. We brought in Carrefour products and, most importantly, quality professionals. Then we listened and acted upon what our clients had to say. This resulted in remarkable success. We gained, on average, a one percent market share in every area—a significant increase for the French market. ” “Of course, this was only made possible by our team of engaged professionals. People are still the heart and engine of the success of a corporation of our size and reach” says Mr. Falck. , The Group continues to reinforce brand format and convergence. Carrefour has now started to transform the concepts and brands of its convenience stores. Different Carrefour banners will cover different customer needs: ‘Carrefour City’, for urban neighborhoods, ‘Carrefour Contact’ for rural areas, and ‘Carrefour Montagne’ for ski resorts. Carrefour is also working on a new concept that may be a French version of coffee, snack, and basic necessities stores existing in other countries. Looking at the 300 stores already transformed, this conversion of its convenience business is on track to be a success. “This brand convergence will end with ‘Carrefour Planet’ which will ultimately represent the new form of hypermarkets in the decade to come” , stresses Mr. Falck. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 18 ConsumerCurrents 09 Brand image is a reality in constant evolution. The Future Carrefour hypermarkets have traditionally based their success on price. Alexandre Falck mentions ‘loaded carts’, which occurs when consumers ‘go to a hypermarket to buy food, and, because it is not expensive, stock up for later’. This price-based model is set to evolve because proximity-based stores are becoming more competitive. “The strength of a brand in our job is established through the feeling of customer proximity. The brand has to talk to people’s hearts. It is the foundation on which we build something strong. When we have consolidated this foundation, we start doing business, and set the stage for diversification and convergence. Meanwhile, we have to be very careful not to confuse our clients by delivering an unclear message. By wanting to accompany the consumer through all his needs and moments of his life, by offering hypermarkets, supermarkets, hard discount stores and Internet shopping, you can end up confusing the consumer and changing the way he relates to and recognizes himself in a given brand, Mr. Falck says. ” Therefore, a modern brand and image has to be regularly steered. Built on a solid base where the consumer recognizes himself, the brand has to constantly adapt to the changes of his consumption patterns. “For example, explains Mr. ” Falck, “the evolution of families in the past 30 years has reshaped consumption patterns. From a very structured family model built around a mother, father and two to three children, we are shifting to a different type of family model that revolves around a mother and father who live together but barely see each other, and eat meals separately. The multiple consequences of this transformation go from an increase in snacking to the proliferation of male-only or womenonly social networks. These changes of consumption patterns are monitored regularly by our professionals because, after all, our job is to feed people. ” Thanks to the high percentage (80 percent) of sales generated by loyalty card holders (17 million members), the Group has access to a large pool of information that helps them better understand the behavior of their customers. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 19 “ ...two tendencies define the distribution sector – the Latin versus the Anglo-Saxon... says ” Mr. Falck. “Success will go to the one who knows how to bridge both. ” The post-modern brand name In addition to the new issues that are surfacing today, Internet shopping now offers new capabilities such as price comparison tools and consumer forums. This is an example of a shift to multi-channel distribution. These new applications indirectly influence the notoriety of a group. “When your cell phone not only tells you where the nearest store is located, but also how much your pre-saved shopping list will cost, competition becomes acute. When the consumer realizes that his shopping list is three dollars cheaper in a store located just down the road, less performing stakeholders can be eliminated from the market. ” The Group also realizes how fragile a brand name has become. With the speed and multiplicity of communication methods, the reputation of a brand can be made or broken very rapidly. A company’s reputation as an employer, as a conservationist or as a polluter now plays an accrued role. “Today, nothing can be taken for granted” says Mr. Falck. , Twenty years ago, marketing was all about building catalogs and planning advertising campaigns. But today, Carrefour has had to bring in the best marketing experts to help us face the increasing complexity of the market. According to Mr. Falck, today, two tendencies define the distribution sector – the Latin versus the AngloSaxon. The Latin tendency, led by decentralized groups such as Carrefour or Casino, is based on the experience acquired within the store. There, stakeholders are merchants rather than managers, and creators rather than engineers. The Anglo-Saxon tendency, led by companies like Wal-Mart and Tesco, brings a more science-based model with a much stronger back-office that expertly applies data-mining and consumer analysis techniques. “ “It is actually the process-driven model versus the field-based model, explains ” Mr. Falck. “Players of the future will combine both approaches to make the transition from mass distribution to massively personalized distribution using new technologies. They will have to remain close to the field and to the experience of the consumers it brings. At the same time, they will have to develop technologies and processes to improve efficiency and their ability to adapt. This is why the Group has chosen to recruit experts from the ‘Anglo-Saxon’ model. The best distributor in the world does not exist yet. The title will go to the one who knows how to bridge both tendencies. ” © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 20 ConsumerCurrents 09 Mobile Commerce is Here, Now The convergence of consumer technologies is often seen as the great unfulfilled promise of the Internet age. Expectations have run high that computing and mobile telephony, together with the Internet, will create a new class of interconnected consumers and companies – but until now those expectations have mostly not been realized. Technologies have failed to deliver convincing services, and some consumers have proved resistant to the technological attractions of the new world. But there are signs that all this may be changing. Based on the results of KPMG’s latest Consumers and Convergence Survey1, consumer take-up of mobile commerce is now undoubtedly on the rise. 1 Consumers and Convergence IV, KPMG International, 2010. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 21 The acceptability of mobile commerce is growing, but it is also accompanied by a high level of consumer resistance. Mark Larson +1 502 562 5680 mlarson@kpmg.com Mark Larson, KPMG in the US, is the Global and US Head of Retail. He has over 25 years of experience working with US and international retailers, and regularly advises clients on how they can address current issues such as changing consumer behavior and the evolving retail landscape. The threat of unauthorized parties accessing personally identifiable information 73% 79% The potential for credit card information to be intercepted by an unauthorized party 69% 75% Receiving unsolicited promotional material 44% 52% I have no data privacy/security concerns 8% 6% 20 2008 40 60 2010 Source: KPMG, Consumers & Convergence IV, 2010 An overall finding of the survey was that consumers’ willingness to make purchases, share personal information or receive advertising through their mobile devices appears to have turned a significant corner since the previous survey in 2008. Although the take-up of these services is far from uniform – it differs greatly by region, and to a lesser extent, by demographic – a growth in mobile commerce is clearly marked. The trend is also somewhat paradoxical. The acceptability of mobile commerce is growing, but it is also accompanied by a high level of consumer resistance. In emerging economies for example, where consumers show the greatest propensity to engage in mobile commerce, they are also the most concerned over privacy and security issues. Indeed, just as adoption of new mobile and online technologies and services increases across the board, so does concern over the associated risks that consumers may be exposed to as a result (see Figure 1). Figure 1: What concerns do you have about privacy and security? 0 The 2010 Consumers and Convergence survey polled over 5,600 consumers in 22 countries. Consumers were asked about a range of their online activity preferences and habits. 80 Perhaps the most important finding of the survey to consumer markets companies is that risk in mobilemediated consumption is being commoditized. Consumers are, in many cases, willing to share their personal information – as long as they believe the transaction makes the risk worthwhile. “As consumers become more willing to use their mobile devices for purchasing and banking, they will soon come to expect retailers to offer more mobile-friendly options, says ” Mark Larson, Global and US Head of Retail, KPMG in the US. “Further, the personal information that consumers are willing to share can enable consumer companies to better target them for advertising or brand-loyalty programs. The trick for retailers and consumer goods manufacturers alike will be in providing the right balance of service, value, privacy and security. ” The 2010 survey results, when compared to the previous results from 2008, show a clear acceleration in the use of mobile devices for both banking transactions and e-commerce. For example, almost half of the global consumers surveyed (46 percent) used mobile devices to conduct banking transactions in 2010 – a 27 percentage point increase on 2008 (see Figure 2). More than a quarter of consumers (28 percent) said they used mobile devices to shop at retail sites, sharply up from only 10 percent in 2008. Both financial and retail transactions are most likely to be conducted by younger consumers, yet adoption is also increasing noticeably among older consumers. Eighteen percent of consumers aged 55 or older say they © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 22 ConsumerCurrents 09 are using mobile devices for banking, an eight percentage point rise on 2008, and 15 percent of those older consumers are buying from retailers online, up from 11 percent in 2008 (see Figure 3). So while it seems that older consumers are likely to become significant participants in mobile-enabled commerce, it is clear that something has also held them back. Several explanations for this are possible, but the most likely factor is not so much the propensity of older consumers to adopt new behaviours, but the changing nature of mobile devices themselves. After a long period during which mobile devices tended to get smaller, they are now getting larger again, hence more user-friendly for all ages. Figure 2: How often do you use your phone for mobile banking? Almost daily 1% 5% About once a week 4% 12% About once a month 13% A few times in the last six months 5% 8% Once in the last six months 4% 4% Over six months ago 0% 4% 4 2008 8 There can be little doubt that the prevalence of mobile devices in AsPac and the historic lack of fixed line infrastructure throughout the emerging markets are factors that are shaping the mobile mindset. Not only are emerging market consumers engaging in much more mobile-enabled commerce than other regions, they are also more likely to access content and to pay for it. However, age is not the most significant differentiator when it comes to mobile-enabled commerce. Regional differences are more apparent: consumers in emerging markets, particularly Asia-Pacific (AsPac), are much more likely to use mobile devices for more than just communicating. They are more likely to use them for retail purchases, to perform financial transactions, or to download mobile content. 5% 0 goods online, compared to 28 percent in all regions. And 44 percent say they used mobiles for financial transactions at least once a month – far ahead of all other regions. 12 16 2010 Source: KPMG, Consumers & Convergence IV, 2010 For example, 41 percent of AsPac consumers say they have bought retail This difference is particularly striking when consumers from the BRIC countries (Brazil, Russia, India and China) are compared to consumers in the G7 economies (U.S., U.K., Canada, Germany, Japan, France and Italy). BRIC consumers are twice as likely to have downloaded a mobile application as G7 consumers, and 57 percent of BRIC consumers say they are willing to pay for site content either wholly or in part, compared to only 22 percent of G7 consumers. It is striking, although perhaps not surprising, that a higher rate of consumption through mobile devices seems to bring with it a higher level of concern about privacy and security. The Figure 3: Have you ever purchased something using a mobile phone through a retailer’s mobile site? 28% 31% 31% 19% 11% 4% 0 10 20 30 40 16–24 25–34 35–44 45–54 55–64 65 yrs or above Source: KPMG, Consumers & Convergence IV, 2010 © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 23 Figure 4: How willing are you to disclose personal information online? Very willing 14% 14% Somewhat willing 36% 44% Not at all willing 49% 42% 0 5 10 15 2008 20 25 30 35 40 45 50 2010 Source: KPMG, Consumers & Convergence IV, 2010 Figure 5: What services or content are worth receiving advertising for on a mobile device? Basic services (e.g., voice/ text/ data) 55% 78% Entertainment (e.g., games, music) 51% 70% Information services (e.g., maps, restaurant guides) 46% 66% Business applications (e.g., calendar) 25% 43% 0 10 G7 20 30 40 50 60 70 BRIC Source: KPMG, Consumers & Convergence IV, 2010 80 proportion of G7 consumers who are ‘very concerned’ about security and privacy is 46 percent and 42 percent, respectively – figures that in themselves are quite high. But for BRIC consumers this rises to 81 percent and 71 percent, respectively. Furthermore, concerns are rising year-on-year in all regions: it appears that for all consumers, commercial use of mobile devices generates anxiety (see Figure 4). Concerns about security and privacy must not be interpreted as an unwillingness to engage in mobile commerce. In fact, where mobileenabled consumption is highest there is also a greater willingness on the part of consumers to exchange personally-sensitive information. This is clear from the results that show that BRIC consumers are more ready to receive targeted advertising (which depends on disclosure of personal information) than are G7 consumers, whether it is for basic services, entertainment, information or business applications (see Figure 5). One significant conclusion that can be drawn from these results is that consumers are ready to make informed decisions on disclosure of personal information. They are increasingly ready to share details of preferences and mobile-consumption, and perhaps even the details of their current real-time location through GPS-enabled devices, as long as they believe they will receive something of value in return. But the misuse of information remains a concern, and over half of consumers worldwide agree there should be better disclosure of privacy and security measures by providers, more independent third party reviews of providers’ measures, and tougher government regulation. These results show that the longanticipated age of consumer convergence is no longer just on the horizon. When close to half of all consumers worldwide are using mobile technology for financial transactions, and well over a quarter are shopping through mobile devices, that age is already here. But as concerns about the risks of the convergent technologies rise from high to very high, consumer companies will have to work even harder than before to gain and keep the trust of their customers. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 24 ConsumerCurrents 09 Prepare Now For the New Revenue Standard Many consumer companies will likely need to change the way they account for sales if proposed new guidance on revenue recognition is implemented. The standard, currently up for discussion through an Exposure Draft (ED), could have far-reaching implications for consumer markets companies. It would impact their relationships with many customers, particularly in terms of contracts and contract negotiations, as well as affect how they report growth.1 ConsumerCurrents reports on this wide-ranging revision of the way many consumer companies account for the fundamentals of their businesses. 1 T  he implications of the Exposure Draft for FDCG companies are discussed in detail in New on the Horizon: Revenue recognition for food, drink and consumer goods companies, KPMG International, 2010. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 25 Revenue recognition is at the heart of consumer company performance– changes to revenue recognition practice have the potential to alter both reported performance and business strategies. Mark Baillache +44 20 73114716 mark.baillache@kpmg.co.uk Mark Baillache of KPMG in the UK, is KPMG’s Global Audit Sector Lead for Food, Drink and Consumer Goods, providing audit and advisory services. He led a number of IFRS implementation projects when EU-listed companies were required to transition to IFRS. Figure 1: Are companies ready? If the Boards publish a new revenue standard in June 2011 based on the ED, and require full retrospective application, when would your organization be ready to apply the new standard? Immediately 4% Accounting periods beginning in 2012 46% Accounting periods beginning in 2013 46% 35% Later 15% 0 5 10 15 20 25 30 35 40 45 50 Proposed New Guidance on Revenue Recognition webcast, KPMG International, July 2010 Key performance indicators are influenced by a company’s revenue recognition practice. These include indicators of overall sales revenues and profitability, as well as the all-important quality of growth, which is monitored closely by investment professionals and often drives a company’s share price. There are operational implications too, from sales strategy through to incentivized rewards for key staff, and implications for a company’s relationships with shareholders, banks, and other providers of capital. Today, many companies exercise a large degree of choice in how they recognize revenue throughout the business, depending on the accounting standards they adopt. Accounting for exactly what constitutes revenue, when the sale is recognized, and how related items such as discounts, rebates, fees and warranties should be accounted for requires significant judgement, and many companies apply these standards differently in practice. Under US GAAP for example, revenue , recognition is highly specified, with revenue recognition models for a wide range of industries. Under IFRS, however, revenue recognition (governed by IAS 18, Revenue) is more a matter of general principle than specific practice. This means that there can be quite wide differences in revenue recognition practices between different companies reporting under IFRS, as well as between companies reporting under IFRS and US GAAP . The new exposure draft on revenue recognition (ED/2010/6, Revenue from Contracts with Customers), jointly published by the International Accounting Standards Board and the US Financial Accounting Standards Board (“The Boards”) is intended to go a long way towards reconciling these differences, by specifying exactly how and when revenue should be recognized. As the title suggests, the focus is on contracts with customers, meaning that food, drink and consumer goods companies (FDCG) that have written or implied contracts with customers will be most affected. However, companies such as retailers that also enter into contracts with customers may also be impacted. “The new standards should provide for a more reliable comparison of revenue, not only within FDCG but also between sectors, says Mark Baillache, KPMG’s ” Global Audit Sector Lead - FDCG. “The price that companies will pay is in the extra effort that will be required in accounting. ” The ‘extra effort’ would be due to the fact that all contracts with customers, whether written or not, will have to be broken down into a series of distinct ‘performance obligations’ which must be priced, and revenue allocated to each obligation when it is satisfied. The anticipated amount of extra effort required is indicated by the poll results from KPMG’s recent global webcast for over 435 consumer markets finance professionals on this topic. When asked about their readiness to implement the new standard, half of the participating accounting professionals said their companies would not be able to implement the new revenue standard before 2013 (see Figure 1). The new standard, if implemented in the form outlined in the Exposure Draft, will mean that companies will no longer be able to treat contracts as units from the revenue point of view. In many cases they will have to be treated © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 26 ConsumerCurrents 09 The new standard, if implemented in the form outlined in the Exposure Draft, will mean that companies will no longer be able to treat contracts as units from the revenue point of view. as a series of distinct obligations which may be satisfied at different times, and the transaction price, recognized when the obligation is satisfied, be estimated according to the probability of the revenue actually being received. The way that companies account for product placement costs, warranties, penalties in service level contracts, and rights of return will change, and may have a significant impact on the sales growth a company reports. For example, a proportion of product placement, or in-store promotion costs, may no longer be treated as a marketing cost, but as a reduction in revenue. Warranty obligations would be treated as a deferral of revenue rather than as an accrual of costs. Penalties under service level agreements would similarly be accounted for as a reduction in revenue, unless it can be shown that the company paying the penalty receives an identifiable good or service in return for the payment. Such changes represent a considerable increase in the accounting workload. In particular, there will be additional work for companies in estimating the probability of certain revenuereducing activities, such as the offer of discounts on future purchases or on early settlement of invoices. The amount of additional work will depend on the company’s current reporting framework. For example, companies reporting under IFRS will find the discount provisions similar to IFRIC 13 on customer loyalty programs, whereas companies reporting under US GAAP will have more work to do. But the need to analyze all contracts with customers will bring a higher accounting and disclosure burden to all companies. Says Paul Munter of KPMG’s Department of Professional Practice, KPMG in the US, “the Exposure Draft proposes a large range of disclosures, and they are considerably more detailed than current © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. ConsumerCurrents 09 27 Figure 2: Are your systems sufficient? Do you believe that your current systems for managing and controlling trade spend will provide you with sufficient information for accounting in accordance with the proposed standard? Yes, using existing systems. 8% Yes, with some modification to our systems. 31% No, significant modifications will be required. 22% I have not yet considered it. 39% 0 5 10 15 20 25 30 35 40 45 50 Proposed New Guidance on Revenue Recognition webcast, KPMG International, July 2010 requirements in both IFRS and the various US GAAP standards, so even if your recognition of revenue does not change, you will still be impacted by the new presentation and disclosure requirements. ” According to a recent poll of accounting professionals attending a KPMG webcast on the ED, over half of companies considered that their accounting information systems will need modification to meet the new standards, and less than one in ten companies believed their existing systems were adequate (see Figure 2). However, for many companies, the accounting-driven changes to revenue will be what concerns them most. These changes may require the modification of existing contracts, such as royalty agreements and debt covenants, that specify revenue targets. They could have an impact on employee remuneration driven by performance-based measures, and they may result in volatile sales trends which CEOs and CFOs will need to carefully communicate to investors. Says KPMG’s Mark Baillache, “for any consumer-facing organization, sales is a key financial measure. Not just an accounting measure but a business measure, something that attracts attention from the CEO right through the company. If the measure is going to change as a consequence of the new accounting standard, that is something that will have to be managed with all stakeholders in mind. ” © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. Global contacts Country contacts Willy Kruh Global Chair, Consumer Markets T: +1 416 777 8710 E: wkruh@kpmg.ca KPMG in Canada Patrick W. Dolan Americas and the US T: +1 312 665 2311 E: patrickdolan@kpmg.com KPMG in the US Mark Larson Global and US Head of Retail T: +1 502 562 5680 E: mlarson@kpmg.com KPMG in the US Mia Robins Global Executive, Consumer Markets T: +44 20 7694 8249 E: mia.robins@kpmg.co.uk KPMG in the UK Elaine Pratt Global Marketing, Consumer Markets T: +1 416 777 8195 E: epratt@kpmg.ca KPMG in Canada Nick Debnam AsPac T: +852 2978 8283 E: nick.debnam@kpmg.com.hk KPMG in China Ian Starkey ELLP T: +44 20 7311 8203 E: ian.starkey@kpmg.co.uk KPMG in the UK David Rogers T: +61 (2) 9335 8188 E: drogers@kpmg.com.au KPMG in Australia Carlos Pires T: +55 11 2183 3148 E: capires@kpmg.com.br KPMG in Brazil Ellen Jin T: +861 0 8508 7012 E: ellen.jin@kpmg.com.cn KPMG in China kpmg.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Designed by Evalueserve. Publication name: ConsumerCurrents 09 Publication number: 101110 Publication date: December 2010 Henrik O. Larsen T: +45 3818 3718 E: hlarsen@kpmg.dk KPMG in Denmark Eric Ropert T: +33 1 5568 7190 E: eropert@kpmg.fr KPMG in France Nandini Chopra T: +91 (22) 3090 2603 E: nandinichopra@kpmg.com KPMG in India Wah Meng Gan T: +02 6763 2445 E: wgan@kpmg.it KPMG in Italy Tatsunaga Fumikura T: +81 (3) 3266 7004 E: tatsunaga.fumikura@jp.kpmg.com KPMG in Japan Rene Aalberts T: +31 20 656 8046 E: reneaalberts@kpmg.com KPMG in The Netherlands Daryll Jackson T: +27 (11) 647 6895 E: Daryll.Jackson@kpmg.co.za KPMG in South Africa ...
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