Understanding Australia's Business and Consumer Environment: A Guide for Successful Business Down Under

Understanding Australia's Business and Consumer Environment

How will Australia's economy, business environment and consumer trends impact the success of your business? This e-book examines the fundamentals businesses must understand to successfully expand or operate in Australia.

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Heralded as the success story among advanced economies for weathering the global economic downturn of 2008-2009, Australia’s high income levels and steady growth offer good opportunities for consumer goods and services in a wide range of sectors.

Key Findings:

• At the height of the global slowdown, advanced economies as a whole contracted by 3.5% - contrasting with Australia’s 1.4% growth.
• Whereas incomes and consumer expenditure have stagnated across many advanced economies, Australia’s per capita disposable income and expenditure have expanded by 9.8% and 3.5% respectively in real terms since 2008.
• In 2012, Australia was ranked 15 out of 183 economies on the World Bank’s Ease of Doing Business Index, meaning it is the fifteenth easiest place in the world to start and operate a local firm.
• Australia has an educated population: 99.9% of adults (those aged 15+) were literate in 2011, but suffers from skills shortages.
• In 2011, the population aged 45-49 in Australia had the highest average gross income: A$77,810 (US$80,259).

Topics include:

• Ease of doing business rating
• Corruption index
• Literacy rate
• Future challenges
• Natural resources
• Media consumption
• Consumer trends
• More

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Kimberly Clark's New Venture into Flushable Wipes

Kimberly Clark has exited the nappies / diapers business in Western Europe, but it is still developing its wipes offering in the area. Although baby hygiene products haven't performed specifically well in the past couple years, consumers have taken to buying baby wipes for other uses, such as makeup removal, and then flushing the wipes instead of throwing them away. Kimberly Clark plans to venture into the market with flushable wipes which will not clog up plumbing systems. 

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What's Next for Kimberly Clark in Western Europe?

Kimberly Clark recently announced its exit from the open nappies / diapers industry in Western Europe, focusing solely on wipes and pants offerings. While Kimberly Clark most likely won't gain many opportunities in a lower end category such as wipes, they are the market leader in disposable pants and will likely look to expand their market share in that segment. 

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Spanish Consumers Trading up in Tissue

The Spanish economy is undergoing a crisis with high unemployment rates and decreasing household incomes. Surprisingly, consumers in Spain are trading up in the toilet tissue category, partly due to companies pushing highly competitive pricing. Ian Bell, Global Head of Tissue and Hygiene Research at Euromonitor, states that not only are Spanish consumers buying more wet toilet tissue, but they are purchasing packs to take with them on the go - a category untapped by most companies.

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The New Chinese Family Structure Spells Good News for the Nappies / Diapers Industry

The traditional family structure in China is changing, with more couples moving to urban areas and farther away from their extended families. As a result, many new parents are looking after their children themselves rather than relying on the extended family. Newer parents are also juggling their work and personal lives, and as a result of the combination of these trends, the age of potty training for children is increasing, which is good news for the nappies and diapers industry.

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Opportunities In and Out of Nappies/Diapers

Although hygiene is well established and saturated across much of the developed world, ageing populations still provide a huge opportunity for the industry as a whole. While at the other end of the spectrum low birth rates would suggest nappies/diapers have perhaps had their day, there still remains scope for product development and the growth of disposable pants.

Demographics a Glacial Movement Potentially Threatened by Global Warming

Analyst Insight by Ian Bell, Head of Home Care Research at Euromonitor International

Demographics: A Glacial Movement

Rumours abound that nappies/diapers have perhaps had their day. A logical conclusion; birth rates in Western Europe, as across much of the developing world, are low and the population is steadily ageing. Allied to this manufacturer’s not inconsiderable efforts to normalise incontinence products in retail, efforts which have somewhat eye-catchingly expanded distribution from the confines of health and beauty specialist into supermarkets, the mainstream. The evidence is clear then; nappies/diapers are yesterday’s news and incontinence is now driving the hygiene market. Not true.

How are Female Consumers Driving the Tissue and Hygiene Market in Developing Economies?

Tissue and hygiene sales in developing markets were especially strong in 2012, with this positive performance directly associated with the changing role of women in these economies. With more women in the workplace, hygiene products catering to on the go female consumers are receiving a sales boost. Nappies and diapers are receiving the largest boost - with more women on the go, diapers are a convenient and time efficient product.

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PLMA SHOW 2012 RECAP

Analyst Insight by Virginia Lee, Senior Research Analyst -US at Euromonitor International

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The PLMA (Private Label Manufacturers Association) Private Label Trade Show was held in Rosemont, Illinois from 11-13 November 2012. The show hosted more than 2,000 exhibitors from the alcoholic drinks, beauty and personal care, consumer health, home care, hot drinks, packaged food, packaging, pet care, soft drinks, and tissue and hygiene industries.

Private label is big business. At the global level, private label holds a 12% value share of the US$2.2 trillion packaged foods market in 2012. Private label is especially strong in Western Europe, where it holds a 25% value share of the packaged foods market. In contrast, private label holds a lower 16% value share of the US packaged foods market, due to a more fragmented retail landscape.

Save Twinkies! Potential Buyers for Hostess

With the news that Hostess is liquidating all assets, demand for its brands will likely be high. Wonder Bread, which has seen declines recently, could be a potential acquisition for Grupo Bimbo or the Campbell Soup Company. Despite its declines, Wonder Bread remains a well-known brand, thus worthy of an acquisition. Hostess's cakes division - which is the largest worldwide - will probably see the biggest competition due its size and the iconic Twinkie brand. Groupo Bimbo may be a player here as well, along with Mckee Foods, owner of the Little Debbie brand.

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