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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Ditch the Drawer Part I: Laundry Care Innovation Ditches the Drawer

Analyst Insight by Emily Potts, Contributing Analyst, Euromonitor International

When it comes to HE washing machines, which compartment does the detergent go in? What about fabric softener? Washing machine drawers bring confusion to many. While some consumers research this problem online – a quick search of ‘washing machine drawers’ brings up plenty of queries, hints and instructions – plenty will rely on guesswork, and more industrious souls might read the instructions that came with the machine, if they can find them. With many of the symbols used on washing machine draws having little consistency between brands and also the labels on detergent and softener brands themselves, it is little wonder consumers get confused.

This is also an indication of the lack of connection which still exists between the software (brand) and hardware (appliance) providers in this corner of the fmcg industry. In these days of convenience-driven innovation in both consumer appliances and laundry care, there is surely opportunity for detergent manufacturers in collaboration with machine manufacturers to simplify one of the most confusing parts of the laundry process, innovation that may also herald an opportunity to do away with the mysterious drawer all together.

New Global Briefing: Toilet Care Moving to Tipping Point

Toilet care remained a small but profitable area of the home care market in 2012. While developed markets such as North America and Western Europe appear to have reached saturation, developing markets are increasingly taking a lead in value generation. This trend is likely to accelerate further with increased flush toilet penetration and wider westernisation of cleaning culture.

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Future Prospects in the Indian Dishwashing Market

Consumption in hand dishwashing in India has been growing rapidly over the last decade, thanks in part to increased usage of higher-end crockery and glassware. Indian consumers are turning to more upmarket cleaning products as a result, encouraged to switch from traditional bar soaps to more modern liquids. With task-specific products almost non-exist in India given its low per capital disposable income, products that offer multi-functionality with an accent on health and hygiene are prospering in this rapidly growing market.

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Dettol – One for All and All for One

Analyst Insight by Serena Jian, Senior Analyst - Home Care, Tissue and Hygiene, Euromonitor International

Reckitt Benckiser launched Dettol Kitchen Gel in India in February 2013, extending the country’s leading brand in surface care into hand dishwashing liquids, a category which is seeing rapid growth. Positioned as a “complete kitchen cleaner”, Reckitt Benckiser expects to capture a significant share of the Indian dishwashing category by encouraging consumers to use one product for all cleaning tasks in the kitchen. Riding on its brand equity in household antiseptics/disinfectants, Dettol’s new launch implies the importance of adding value in product development while keeping costs down in order to expand in emerging markets where consumers’ disposable incomes are still low.

Go Big or Go Home: How Menards is Bucking the Trend of Store Downsizing in the US

Analyst Insight by Jared Koerten, Senior Research Analyst, Euromonitor International

In April 2013, Home Improvement retailer Menards Inc plans to open new stores in St. Peters, Missouri and O’Fallon, Illinois – both of which are in the St. Louis area. The unique feature of these new stores is their incredible size, with each outlet expected to surpass more than 18,500 square metres of shopping space.  For reference, the average outlet size of leading Home Improvement retailers Home Depot and Lowe's were only 10,500 and 9,800 square metres, respectively, in 2012. In fact, even Walmart Supercenter – the hypermarket viewed as the epitome of a large-format retailer – averaged an outlet size of only 17,000 square metres in 2012.

These are not the first mega-stores that Menards Inc has opened. In 2011, the company reopened a store in Eden Prairie, Minnesota that measured over 21,800 square metres and stocked a range of grocery, healthcare, jewellery, toys, and apparel products. The company followed in 2012 by introducing a mammoth store in Golden Valley, Minnesota that topped 23,200 square metres.

The Bird Flu Outbreak in China and its Effects on the Home Care Industry

The H7N9 virus - or Bird Flu as it is commonly called - is again spreading in China with 126 known infections as of May 1. Serena Jian, Senior Research Analyst for Home Care, Tissue and Hygiene at Euromonitor, says that previous outbreaks in China led to a boom in the home care industry, with concerned consumers rushing to stores to purchase items such as bleach, household antiseptics and disinfectants. News coverage and education about the bird flu and its prevention will also likely add to home care sales.

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Growth and Opportunities for Lotion Pumps in Beauty and Home Care

Following her presentation at Plastic Closure Innovations 2013, Regina Maiseviciute, Senior Packaging Analyst at Euromonitor International, discusses how plastic Lotion pumps are one of the fastest growing closure types in beauty and home care products. The growth of these closures is propelled by categories such as liquid soap. Lotion pumps are also being added to categories that traditionally have other closure types. For example, anti-aging creams can usually be found with screw closures; however, pumps are being added to this category as a way to dispense this expensive product with precision.  Pumps are not as prevalent in home care; but have been added to products such as concentrated laundry detergent.

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Detergent Fragrances in Middle East and Africa: From Floral to Oriental

Analyst Insight by Anaïs Mirval, Analyst - Ingredients, Euromonitor International

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The introduction of oriental scents as ingredients in the Middle East and Africa is emerging as a major trend in home care fragrance. According to Euromonitor International fragrance in the Middle East and Africa will enjoy the strongest growth globally with volume sales increasing 30% between 2011 and 2016, albeit from a lower base.

Pod-Based Systems on the Rise in Laundry Care

Procter and Gamble recently launched a pod-type delivery system using its Ariel laundry detergent in parts of Europe. The launch followed a similar release, Persil Bio Gel Caps by Henkel. These new products mimic pod-based innovations seen in the automatic dishwashing segment. In both industries, pod-based delivery creates multi-functionality and adds value for money. For instance, laundry pods might claim usage as a detergent, stain remover and brightener. However, it may be an uphill battle for companies using pods because consumers are still leery of pods’ functionality.
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Photo Credit: Flickr - USCPSC