Analyst Insight by Sulabh Madhwal - Personal Accessories and Eyewear Analyst
As the Eurozone crisis and austerity measures hit consumer confidence and constrain demand, growth for leading luxury bag brands such as Louis Vuitton, Gucci and Prada slowed down in 2013 and 2014. In addition, accessible luxury brands are headed towards a relatively conservative year in 2015. Looking towards 2019, we make a few predictions to help determine growth strategies for the industry.
New markets come into focus
China and the US are still expected to lead global sales in 2019. However, markets such as South Korea, India and Taiwan will further their influence on global sales and serve as ideal candidates for market entry or expansion. South Korea will overtake the entire Eastern European region and edge closer to Japan’s number three position by 2019. India is likely to be among the top ten bags and luggage markets in 2019, as it overtakes Italy and Germany on the way.
Continue reading "Where Will the Future Growth for Bags and Luggage Come From?" »
Analyst Insight by Arunas Umbrasas - Industrial Analyst
Saudi Arabia’s booming automobile market powered through the global sales slump over 2009-2013 and is set to register roaring growth over 2013-2019. Surprisingly, sales expansion is being fuelled not by sales of bespoke Rolls-Royces but by low-cost vehicles, which are increasingly popular among mid-income Saudis and foreign workers. Dynamic growth has already attracted major brands from China such as Geely, which capitalised on robust growth to expand market share by catering to low-cost vehicle buyers. As leading competitors continue to launch new models and more foreign workers arrive in the Kingdom, car sales will only grow further during the forecast period.
Continue reading "Saudi Arabia: Migrant Workers and Mid-Income Group Drive Record Sales of Cheap Cars" »
Analyst Insight by Lidia Shuktomova - Research Analyst
With ongoing political and economic woes, 2015 is expected to be a challenging year for the Russian marketplace. Euromonitor International projects that in 2015 Russia’s real GDP will decrease by 3.8% and consumer expenditure will fall by 4.6%, in constant 2014 prices. As a result, many Russians are expected to trade down. In 2015, retail sales of tissue and hygiene in Russia are projected to see only 1% rise in constant value (US$ fixed 2014 exchange rate) to achieve US$4.4 billion. However, volume sales for many categories are expected to register stronger growth, reflective of weakened purchasing power and bargain shopping.
While challenging in the short term, Russia’s downturn creates a window of opportunity for domestic brands to capture consumer attention, build customer loyalty and drive domestic industry growth, helped by expanding local production and improved supply chain.
Continue reading "Russia: Current Challenges and Long Term Opportunities in Retail Tissue and Hygiene" »
Analyst Insight by Tim Barrett - Retailing Analyst
On March 25th, 2015 it was announced that Kraft Foods and HJ Heinz would merge, ultimately forming a packaged food power house called the Kraft Heinz Co. This combined company would have a 5.4% value share of the entire US packaged foods market, making it the number one company in the space with nearly US$20 billion in sales. This merger is primarily a response to a changing grocery landscape which prioritizes cost efficiencies, given the emphasis on low prices for the consumer.
Wal-Mart becomes king of grocery retailing
Within grocery retail, Wal-Mart maintains disproportionate power as the nation’s dominant grocery retailer with around 20% market share in 2014. Its second largest competitor, Kroger, only has 8%. Wal-Mart has managed to tighten its grip on the grocery market over the past ten years, growing sales from US$45.3 billion in 2004 to US$156.5 billion in 2014. Wal-Mart was able to increase its grocery sales by 245% thanks to its core strategy: lower prices.
Continue reading "Why the Changing US Grocery Retail Market Underpins the Kraft and Heinz Merger" »
Analyst Insight by Pavel Marceux - Technology, Communications and Media Specialist
With several countries globally declaring Internet to be a basic human provision and digital giants financing free-access projects, the Internet is becoming a necessity of modern society. This viewpoint will accelerate further going forward as key public segments such as education and health move into the online domain. However, with many developing countries unable to subsidise Internet infrastructure, advanced economies and international organizations will have to step in to help out.
Global Internet Users and Population: 2009-2030
Source: Euromonitor International from International Telecommunications Union/OECD/national statistics
Note: 2015-2030 figures are forecast
Continue reading "Has Internet Access Become a Basic Human Right?" »
Analyst Insight by Povilas Sugintas - Research Analyst
Health and wellness is one of the most discussed trends in all Lithuanian FMCG industries and soft drinks products are usually recognized as one of the most impacted areas. Consumers, the argument goes, should avoid drinks perceived as unhealthy and either reduce their intake, abandon them altogether or seek a compromise by looking for healthier versions of the same drinks. However, in looking at Euromonitor International’s soft drinks data in Lithuania over the period of 2009 to 2014 (specifically, CAGRs – compounded annual growth rates) a rather different picture emerges. In fact, the best results were achieved by the same categories which have faced the most scrutiny. At the same time, categories appearing to be well-positioned to benefit from current healthy lifestyle trends were stagnating and even declining in some cases. Large marketing budgets and powerful branding have proven to be better indicators of growth than wellness positioning.
Continue reading "Despite healthier rhetoric, better branding and marketing drive Lithuanian soft drinks" »
Analyst Insight by Daphne Kasriel-Alexander - Consumer Trends Consultant
The consumer desire to be thrifty, kick-started by the ‘Great Recession’, has not dissolved as the financial health of many consumers slowly improves. An interesting and growing trend sees the development of more real world and online brands meeting the consumer interest in substantial savings on essentials, whether this is expressed via interest in ‘substandard’ just-past its sell-by date produce, “ugly food”, or in welcoming ‘pre-loved’ branded goods resold by the company that originally made them, or by other consumers.
Continue reading "Consumers Sense Frugal Beauty in Imperfection" »
Analyst Insight by Oru Mohiuddin - Senior Beauty and Personal Care Analyst
The process of developing white spaces to drive growth in the beauty industry, particularly in mature countries challenged by the economic slowdown, increasingly involves incorporating claims from other categories in order to introduce new groups of products with added benefits. Sun protection is a claim increasingly used by products in categories other than sun care. Sun protection claims are most widely used for anti-agers but are also visible to a lesser extent in facial foundations. An interesting question is, with overlapping claims, how are these categories juxtaposed?
Sun protection in anti-agers and facial foundation impacts sun care in developed countries
The increasing incorporation of sun protection benefits in anti-ageing facial moisturisers and facial foundations is impacting growth for sun care as a separate category in developed countries. From 2012 to 2014, sun care growth declined from 3% annually to 1% annually, while anti-agers' growth slowed from just over 3% to 2.5%. Both product areas are seeing sales growth slow but sun care slowed at a faster rate in comparison to anti-agers. Sun care is finding it more difficult to cope with competition from anti-agers due to anti-agers offering both sun protection and more specialised anti-ageing solutions such as lifting, firming and regenerating. In contrast, the anti-ageing benefits offered by sun care primarily include protecting skin from sun damage, which in turn helps to delay the ageing process. Anti-ageing sun care thus focuses more on the preventive side rather than addressing consumers' current ageing concerns. In facial foundations, BB/CC creams meanwhile also claim to provide sun protection as part of a total skin care solution, thus offering convenience and a time- and money-saving option.
Continue reading "Turning Around Sun Protection Growth with Added Benefits" »
Analyst Insight by Lianne van den Bos - Food Analyst
Over the last few years Internet retailing for baby food has soared in China after several baby food scares caused parents to turn to the online channel to order “trusted” European brands that were sold out in-store. One of the latest threats in New Zealand could boost Internet retailing even more.
New Zealand’s largest dairy producer, Fonterra, as well as Federated Farmers, are making efforts to reassure consumers that their products are safe after a blackmail threat was received to poison both companies’ infant formula. The letters threatened to contaminate infant formula with a poison known as 1080, used in pest control, as a protest to stop the country from using it. Biodegradable 1080 poison is the only toxin currently registered for use on mainland New Zealand as suitable for aerial targeting of possums - a major conservation and agricultural pest.
Continue reading "E-Commerce in China Could Boom after New Zealand Infant Formula Poison Threat" »
Insight by Erika Sirimane - Business Development Consultant
On March 10th 2015, the New Zealand Police and the Ministry for Primary Industries held a joint press conference to announce that Fonterra Co-operative Group Ltd and the Federated Farmers advocacy organisation received letters in November 2014 threatening to contaminate infant formula and other products if New Zealand did not stop using the pesticide 1080 by the end of March 2015. 1080, a pest control chemical compound commonly used by the Department of Conservation to control possum and rodent populations, represents a contentious issue in New Zealand, with the use often supported by conservationists and livestock farmers, but typically opposed by residents living in 1080 aerial-drop zones.
Continue reading "Threat on New Zealand Dairy as 1080 Infant Formula Contamination Scare Revealed" »