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July 23, 2014

White Paper: China Overtakes the USA as the World's Largest Economy

250_chinaVsUS-v1.0An economic milestone is expected to occur in 2014 with China likely to overtake the USA to become the world’s largest economy in Purchasing Power Parity or PPP terms.

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China and the USA may be economic rivals but beyond the headlines divergent trends in both countries are apparent. Everything from living standards, consumption patterns, the business environment, productivity, retail and travel markets differ in China from the USA.  Similarities are there with income inequality an issue in both countries and both are leaders in the development of renewable energy technologies, manufacturing production and, less auspiciously, pollution.

Our analysts have identified the key weaknesses and strengths of the two superpowers across a wide range of industry sectors and in terms of economics, demographics, consumer trends and the business environment.

 

 

 

Key Facts:

  • As the world’s two largest manufacturers, China and the USA lead in global energy consumption and pollution, with China overtaking the USA in 2010 to become the world’s biggest energy consumer.
  • China is set to overtake the USA in 2014 in terms of international travel and knock Germany off the top spot in 2017 to become the largest outbound source market with 105 million outbound trips.
  • By 2018, USA’s beauty per capita spending is expected to increase to US$240, approximately five times higher than China’s projected per capita spending of US$50. The success of local beauty and personal care players in China has led to brands such as Garnier and Revlon pulling out of the country.
  • In 2002, China overtook the USA to become the leading beer market in terms of volume sales. However, China still has some way to go before it can claim to be the world’s biggest beer market by value.

 

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Champagne and Problems Bubbling Beneath the Surface: Post-Recession Sales Decline and Growth in Sparkling Wine

Spiros_MalandrakisAnalyst Insight by Spiros Malandrakis - Senior Alcoholic Drinks Analyst

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According to Pierre-Emmanuel Taittinger, outspoken president of the eponymous champagne house, "Champagne's stiffest competition comes not from other sparkling wines but from Viagra". If there ever was a sentence encapsulating the category’s inherent contradictions, emotional gravitas and effervescent overconfidence, that would be it.

Reality is unfortunately less lyrical. According to Euromonitor International’s latest research, global champagne volumes declined by more than 1% in 2013 – a relative improvement compared to the moribund performance of 2012 but still nowhere near the heady heights of pre-recessionary exuberance. And while an inverse correlation between Viagra sales and champagne is yet to be established, other sparkling wine’s seemingly unstoppable advance is highlighting the dangers of competition coming from Cava and Prosecco rather than pharmaceutical companies.

Continue reading "Champagne and Problems Bubbling Beneath the Surface: Post-Recession Sales Decline and Growth in Sparkling Wine" »

July 22, 2014

National Automotive Industry Development Plan (NAIDP) Drives Car Sales to Record Levels in Nigeria

Neil-KingAnalyst Insight by Neil King - Automotive Analyst

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In October 2013, the Federal Government of Nigeria announced its National Automotive Industry Development Plan (NAIDP). In order to stimulate investment in local vehicle production and thereby bolster Nigeria’s economy instead of revenues heading abroad, a core component of the plan is an increase in import duties for passenger cars from 20% to 70% (35% duty and 35% levy) and to 35% for commercial vehicles. However, the duty applied to vehicles which are assembled locally is set at 10% for SKD (semi-knockdown) Part 2 kits, 5% for SKD Part 1 kits and 0% for CKD (complete knock-down) kits. Also, manufacturers that assemble vehicles locally can import up to twice as many FBU (fully built units) as they do kits at the reduced import duty rate of 35% for passenger cars and 20% for commercial vehicles.

The plan was fully implemented on July 1 and, not surprisingly, new car sales soared as consumers took advantage of the lower duty rates while they still could. The Executive Director of the Nigerian Automobile Manufacturers Association (NAMA), Mr Arthur Madueke, was quoted on July 8 on This Day Live that “between January and December 2013, about 52,000 new vehicles were imported, while by May this year, 37,000 cars have been imported.” With CBU imported vehicles paying the old rate of duty until the end of June, sales are likely to have boomed in the month and a 30% growth rate for the first half of 2014 is therefore not out of the question.

Continue reading "National Automotive Industry Development Plan (NAIDP) Drives Car Sales to Record Levels in Nigeria" »

Men's Grooming Habits in Emerging and Developed Markets

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When it comes to beauty and personal appearances, women report spending the most time and money perfecting their looks. Yet, over the last decade, the range of beauty and personal care (BPC) products regarded as socially acceptable for men has widened, and men are paying increasingly more attention to their personal appearances. One third of men spend more than thirty minutes a day grooming, opening up a number of opportunities for BPC companies to develop products targeted to the unique needs of this especially appearance-minded segment of men. Furthermore, as more men become interested in improving their appearance by extending their grooming habits and product usage, it will be essential for brands to create male-specific products that enable men to feel more comfortable in the beauty and personal care aisle.

Daily Time Spent on Personal Appearance and Grooming, by Gender

Source: Euromonitor International Personal Appearance Survey, 2014

Note:  Showing percent of respondents spending the indicated amount of each day cleaning and caring for appearance (e.g., brushing teeth, bathing, styling hair, applying make-up, etc.). Includes all time spent grooming during the day – morning, evening, and in between. Does not include time spent selecting or changing clothing.

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The Next Big Thing in Consumer Electronics is Already Here

Weeteck_looAnalyst Insight by Wee Teck Loo - Head of Consumer Electronics

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Smartphones and tablets have dominated the headlines of consumer electronics for the past few years and will continue to be the key growth driver for both retail volume and value sales over the forecast period. At the same time, manufacturers and retailers are also on the search for the next big thing, like wearable electronics. Beyond looking at new products, there are still opportunities aplenty in “old” product categories like laptops and LCD TVs, as the latest Euromonitor International’s Consumer Electronics research can attest. 

Retail Sales of Key Electronic Products: 2013-2018

Retail sales of key electronic products

Source: Euromonitor International

Continue reading "The Next Big Thing in Consumer Electronics is Already Here" »

July 21, 2014

Beauty Players’ Fit Response to World Cup-Stirred Opportunities

Ildiko-SzalaiAnalyst Insight by Ildiko Szalai - Senior Beauty and Personal Care Analyst

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The Brazil 2014 World Cup has undoubtedly captured the attention of a truly global audience, and most fmcg players have been on the ball about capitalising on the event. Many of them have aligned their global brands to Brazilian or football-themed product launches. In the beauty and personal care industry, colour cosmetics players have been especially quick to respond, but many other product categories have adjusted their advertising campaigns to benefit from the attention of the many millions of spectators watching the games. The response to the heightened interest in Brazilian/World Cup-themed products from beauty companies has not lacked speed, volume or creativity. Although the event has created an unmissable brand-building opportunity for most players, it is not likely to have a lasting impact on category growth forecasts in beauty and personal care.

FIFA has released a number of statistics indicating the size of the global audience. On the last night of the tournament, the World Cup final game between Germany and Argentina was watched by a staggering record global audience of one billion. The opening game between Brazil and Croatia on 12 June was watched by 42.9 million people on Brazilian network TV Globo, FIFA said, making it the most watched sporting event of the year in Brazil. Another record was broken in Japan; the national team’s game against Ivory Coast was seen by 34.1 million on Japanese TV channel NHK, double the size of the audience watching its next biggest sports broadcast this year.

Continue reading "Beauty Players’ Fit Response to World Cup-Stirred Opportunities" »

What Next for the BRIC Economies in 2014?

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The outlook for the BRIC for the second half of the year is as diverse as the grouping itself. Russia is set to suffer the worst performance of the BRICs, followed by Brazil. All four countries have seen their growth forecasts revised down since January, but for widely differing reasons.

Real GDP Growth Forecasts: 2014

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Source: Euromonitor International from national statistics/Eurostat/OECD/UN/IMF

Continue reading "What Next for the BRIC Economies in 2014?" »

Shopper Insights in Action Conference 2014 – IIR – Event Recap

Howard TelfordAnalyst Insight by Howard Telford - Beverages Analyst

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This past Wednesday, the 14th annual Shopper Insights in Action conference concluded in Chicago, Illinois. As always, the event focused on strategies to improve shopper activation across all kinds of consumer retail categories and channels, providing the shopper side of consumer marketing (and its research suppliers) an engaging forum to share ideas and success stories.

From a beverages and food service perspective, the three-day event at Navy Pier left me considering the need to address three, macro-level organizational challenges in the drinks industry:

1.       Using ‘big data’ more effectively

As the event’s exhibit hall demonstrated, there are a myriad of methodologically different ways to collect, measure and interpret the in-store responses of consumers to your products and shelves. As an industry that frequently delivers and merchandises its products through a two-tier bottling system (or other independent direct delivery partners), measuring the effectiveness of in-store activity - displays and product location - is vital. How can marketing and channel management teams demonstrate that ‘soft’ information on shopper response, preference or opinion is robust and indicative of volume growth or incremental revenue? Brands and their retail partners must work harder to interpret and contextualise data and insights in order to effectively advocate for change within their businesses.

Research focused and data literate leadership certainly helps. Keynote speaker Sir Terry Leahy, former CEO of Tesco plc, spoke about the need to improve the dissemination and understanding of data within large retailers and other organizations. As research tools become more powerful and useful – from generating understanding of potentially new, developing markets, to specific, localised consumer segments and their behaviours – it remains important that these insights are clear and actionable while reaching the right pairs of eyes.   

Continue reading "Shopper Insights in Action Conference 2014 – IIR – Event Recap " »

July 20, 2014

Imperial Propelled to Top of E-cigarettes Tree With Surprise Acquisition of blu in Reynolds/Lorillard Divesture

Zora MilenkovicAnalyst Insight by Zora Milenkovic - Head of Tobacco Research

It’s not often that the tobacco industry is caught on the hop, especially with a deal that’s been on the radar for the better part of half a year, but it was gasps all around on the 15th July when it was announced that the expected Reynolds American (RAI)/Lorillard (LO) merger would result in Imperial Tobacco (IMP) acquiring not only the cigarettes brands Winston, KOOL, Salem, Maverick, but also LO’s leading e-cigarettes brand blu, which the industry assumed was part of LO’s attraction for RAI in the first place. The acquisitions propel IMP from bit-player on the US cigarettes market to number three player and, more unexpectedly, from litigious outsider in the e-cigarettes market to number one player. And not number one player in any old market, but in the world’s largest e-cigarettes market, worth US$1.7 billion in 2014. What does this mean for IMP and for the vapour industry? Who are now the main tobacco players in this US$6billion global market and what are their vapour brands?

TOBACCO PLAYERS AND THEIR VAPOUR BRANDS 580 resized.png

 

Continue reading "Imperial Propelled to Top of E-cigarettes Tree With Surprise Acquisition of blu in Reynolds/Lorillard Divesture" »

Airbnb Introduces New Branding to Support New Direction

Michelle GrantAnalyst Insight by Michelle Grant - Travel and Tourism Manager

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On 16 June 2014, Airbnb announced new branding that includes a new logo as well as a redesigned website and upgraded mobile apps. The moves were a shift from focusing on the types of lodging available on the website (typically unique structures such as treehouses and castles) to a focus on the people within the Airbnb community. The rebranding aims to position Airbnb as a lifestyle brand to enable the company to broaden its product portfolio beyond lodging services.  Given the harsh reaction to the logo, though, it remains to be seen if the new branding will be enough support the company’s new direction.

"Belonging" is the Keyword

The company’s founders and first Airbnb guest revealed the new branding in an online presentation that featured many stories about Airbnb’s community, emphasising the company’s new core tenant of “belonging.”  “Belonging is based upon four key themes of people, places, love and Airbnb, which influenced the new symbol as part of the new company logo. The new symbol is called “Bélo” and is simple so that anyone can recreate it. It is also abstract enough to allow Airbnb to use it as it moves into offering other products and services. CEO Brian Chesky envisions that the symbol may become a “universal symbol of sharing” and be displayed by many different businesses, such as restaurants.

The company launched a tool called Create that people can use to personalise the logo.  People can put their personalised logos on merchandise, such as mugs, stamps and stickers, and purchase it through Airbnb’s partnership with Zazzle, an online company that enables customisation of products.  However, critics point out that the new logo resembles risque parts of the human anatomy and the logo is also similar to one for the company, Automation Anywhere, but both companies reached an agreement whereby Automation Anywhere will use a new logo.

Continue reading "Airbnb Introduces New Branding to Support New Direction" »

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