Analyst Insight by Damian Shore, Contributing Analyst
Financial results for the third quarter of 2013 indicate that the fortunes of Colgate-Palmolive Hill’s pet care unit are being turned around, while those of Procter & Gamble continue to slide in the wake of a string of product recalls.
Procter & Gamble and Colgate-Palmolive face similar problems. Mars and Nestlé are consolidating their grip on the global dog and cat food market, largely through intensive efforts to build share in emerging markets. Moreover, these companies enjoy economies of scale that Procter & Gamble and Colgate-Palmolive can only dream of. In 2012, Mars and Nestlé accounted for almost 50% of value sales in the global dog and cat food market, up from 48% in 2008. On the other hand, a plethora of small and medium-sized players are fragmenting the premium end of the market (particularly in North America), the segment in which Procter & Gamble and Colgate-Palmolive have traditionally derived the bulk of their sales.
Continue reading "Q3 Financial Results Underline the Contrasting Fortunes of Procter & Gamble and Colgate-Palmolive in Pet Care" »
Analyst Insight by Pavel Marceux - Contibuting Analyst, Technology Communications and Media
Euromonitor has identified three emerging economies with the highest per capita consumer expenditure on communications in the developing world in 2012: the UAE, Israel and Qatar. Due to unique factors, such as demographics, infrastructure and culture, these three markets demonstrate some of the world’s strongest digital consumption, offering opportunities for high uptake in segments ranging from smartphones to social media. Interestingly, the top three markets are all located in the Middle East, demonstrating an appetite for connectivity in the region and the adoption by local consumers of digital goods as necessities. Nonetheless, these markets offer individual risks, as well as opportunities.
Consumer Expenditure on Communications in the UAE, Qatar and Israel: 2007-2020
Source: Euromonitor International from national statistics/Eurostat/UN/OECD
Note: Figures in constant 2012 prices, year-on-year exchange rates
Continue reading "Top 3 Emerging Markets Offering the Strongest Digital Consumption" »
Analyst Insight by Damien Shore - Contributing Analyst
Convenience and environmental-friendliness have been key drivers of sales growth in the global cat litter market in recent years. However, private label offerings are proliferating and their quality is improving, forcing manufacturers of branded products to innovate to maintain their margins.
Global Sales Growing by More than 3% a Year
Annual value sales in the global cat litter market are forecast to reach almost US$5 billion in 2013, up 17% in real terms since 2008 and equating to a compound annual growth rate (CAGR) of just over 3%. Growth has been particularly strong in North America, Australasia and Eastern Europe. Between them, the American and Russian markets accounted for 58% of absolute growth in cat litter value sales over the 2008-2013 period. Strong growth rates are also in evidence in such emerging markets as Brazil, China, Hungary and Ukraine, but these are from very low bases. Value sales have been much weaker in the Western European and Japanese markets, with CAGRs of less than 2% in both cases.
Continue reading "Premiumisation Versus Private Label in Cat Litter" »
Analyst Insight by Pavel Marceux - Contributing Analyst, Technology, Communications and Media
Businesses are placing their resources into the online domain more than ever before as the festive season approaches, with digital battle lines being formed across web platforms. Even markets without traditional shopping spikes in December and November are beginning to tap into the festive mentality, with China’s Singles Day on November 11th becoming the world’s largest e-commerce event. As more of the global population comes online, increasingly through mobile platforms, the myriad of ways to interact with consumers continues to expand, with trends such as social commerce and “showrooming” likely to dominate the 2013 holiday season. However, bricks-and-mortar retailers without online, and particularly mobile, strategies will struggle to pull in the holiday spenders.
Continue reading "Festive E-Commerce: How Firms Are Chasing Digital Consumers During the Holidays" »
Analyst Insight by Ashma Kunde - Analyst, Apparel
In an ironic twist of events, and a telling sign of the times, Abercrombie & Fitch has announced that it will be increasing its size range. This from the same company whose CEO once claimed that it only catered for ‘cool’ and ‘attractive’ American teenagers and had an openly exclusionary attitude.
The extension of sizes can be seen not so much as a defeat but an acceptance that the retailer’s core consumer has evolved. With social media providing the impetus for standing out rather than fitting in, it is evident that millennial consumers prefer creating their own identities. Socialising at shopping malls has been replaced by Snapchat and ‘selfies’. Cookie-cut logos have been replaced by tongue-in-cheek slogans and fashion-forward designs.
None of these changes have boded well for Abercrombie & Fitch, whose steady decline continued in its third quarter of 2013, with comparable sales dropping by 14%. The problem with the retailer is that its main distinguishing point has always been its branding. Its product is a uniform that shows allegiance to a ‘cool’ kids club that today’s American teenagers do not relate to.
Continue reading "Apparel Retailer Abercrombie & Fitch Turns to Product to Appeal to the Hashtag Generation" »
Analyst Insight by Daphne Kasriel
While in many peoples’ minds, it is synonymous with Hello Kitty merchandise and a quintessentially Japanese predilection for sugary appeal based on child-like design sensibilities, Kawaii culture is a trend that is manifesting itself globally. According to Teri J.Silvio, an academic at the Institute of Ethnology in Taipei City-based Academia Sinica: “Cute objects provide a respite from the struggles of daily life”.
A Japanese Speciality
In Japanese, Kawaii means cute or adorable. Kawaii has gradually gone from a small subculture in Japan to an important part of Japanese modern culture as a whole. Many bloggers feel that aspects of kawaii culture such as cosplay (where people dress up as characters from comic books or cartoons), maid cafés and computer games are drawing people closer to Japan. Japanese companies are skilled at transforming products and services not traditionally thought of as adorable or cuddly into the latest kawaii must-have trend. This includes anything from USB keys to police stations which have their own cartoon mascots to Nippon Airlines aeroplanes decorated with colourful anime characters, and even government safety signs featuring cute characters to convey serious messages. Mark Silato, a blogger on one of the many kawaii websites writes: “Regarding public notices in Japan, they sure beat Western ‘getting yelled at’ any day.”
Continue reading "Kawaii Culture: Don’t Underestimate the Power of Cuteness" »
Analyst Insight by Hilary Walsh - Economy, Finance and Trade Manager
As South Africa and the world mourn the loss of Nelson Mandela we take a look at the economic legacy of South Africa’s first black president and liberator. Imprisoned in 1963 and sentenced to life, accused of trying to overthrow the government, Mandela was released in 1990 following years of international campaigns. Having led the negotiations to abolish apartheid, Mandela went on to lead South Africa’s first democratic, multi-racial government. Mandela made it his life’s work to eradicate the institutionalised racism, poverty and inequality that ravaged South Africa and in doing so, changed the lives of South Africans forever, becoming the “father of democracy”. Between his election as the country’s first black president in 1994 and 2013, real GDP will have grown by 82.2% while exports will have grown by 265% in US$ terms. South Africa is the largest economy in Sub-Saharan Africa but despite his best efforts, the country still faces serious economic and social problems.
Continue reading "Nelson Mandela’s Economic Legacy" »
Analyst Insight by Loo Wee Teck - Head of Consumer Electronics
Acer Inc’s Chairman and CEO, JT Wang, tendered his resignation on 5 November 2013 after the company reported a net loss of US$446 million for the third quarter of the year and announced plans to reduce its number of staff globally by 7%. Just a week earlier, Dell Inc had announced the completion of its acquisition by Michael Dell (founder and CEO) to take the embattled company private. With the exception of Lenovo Group, all other PC manufacturers are struggling financially or are reporting declining sales every quarter. Retail sales of tablets are forecast to exceed 140 million units by the end of 2013, overtaking laptops as the most popular computer for consumers. The naysayers have started to declare the death of personal computers (PCs) – desktops and laptops - running on the Windows operating system.
Continue reading "Laptops and Desktops Still Relevant Moving Forward" »
Analyst Insight by Daniel Grimsey - Research Analyst
Air pollution is a major problem across the Asia Pacific region, responsible for over a million premature deaths each year. Consumers are understandably highly concerned and looking for solutions, with Vitamin C and Vitamin E pills increasingly being embraced for the purpose.
Where Breathing Is Hazardous To Your Health
The economies of Asia may have boomed in recent years, but this has not come without a price tag. Much of the cost is being paid by the Asian environment, with pollution becoming a key issue across Asia. Studies now indicate that the ubiquitous smog of Beijing and elsewhere across northern China is cutting over half a decade from the average life expectancy in the region, with other studies claiming air pollution was linked to 1.2 million deaths in China in 2010 alone. Other studies meanwhile suggest that the “Asian Brown Cloud” is responsible for the deaths of half a million Indians each year. Air quality amongst much of China and India is now considered either “hazardous” or “very unhealthy.” Consumers across the Asia Pacific region are understandably highly concerned about pollution – according to a poll by the Pew Research Centre, 47% of Chinese consider air pollution as a “very big problem” in 2013 up from 36% in 2012 - and are searching for solutions.
Continue reading "Is there an Over-the-Counter Solution for Air Pollution?" »
Analyst Insight by Neil King - Analyst, Automotive
Of the markets that Euromonitor covers, Hong Kong has the highest retail value sales of luxury goods per household, but it is especially striking that this is four times higher than consumer expenditure per household on the purchase of motor vehicles. Even in China, luxury goods sales only amount to 66% of consumer expenditure on buying motor vehicles. However, there are two very good reasons for this phenomenon in Hong Kong; luxury-obsessed consumers and low levels of private vehicle ownership.
Continue reading "Personal Vehicles a Rarity in Hong Kong; Consumers Spend on Luxury Instead " »