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There are nearly 20 million domestic workers in Latin America, according to the International Labour Organisation, which is five times more than in the whole of Western Europe and North America combined. Mostly they are women. In fact, one in every four women earning a wage in Latin America is a domestic worker. But, what is their impact on the region’s home care market? After all, at the core of their remit is cleaning houses.
Unsurprisingly, their influence on home care sales is huge and far-reaching. It is felt not only in the work they do, but also, increasingly, in the work they do not do, or have stopped doing. Indeed, although the number of domestic workers is still very high in Latin America, the big change over recent years has been the drop in the number of domestic workers employed on a full-time basis.
Consider, for example, that salaries paid to domestic workers in Brazil have risen faster than any other profession over the last decade, reflecting hikes in the minimum wage coupled with new and more enforceable legal rights to benefits such as overtime and severance pay. One of the side-effects is that fewer middle-class Brazilians can afford to employ domestic workers (empregadas) on a full-time basis. For example, an empregada who works 12 hours a day for five days a week now has the legal right to claim 20 hours of overtime (four hours per day). This has pushed up wages dramatically.
This legislation came into effect two years ago, and at a time when middle-class confidence in Brazil was already under pressure due to a lacklustre economy. The key implication for home care manufacturers is that many middle-class Brazilians have reverted to doing more of their own household chores. This, in turn, has fuelled an increase in demand for time-saving and multi-functional home care products.
It is telling that, over the last two years, the fastest-growing home care products in Brazil have been kitchen cleaners, multi-purpose cleaners, in-cistern toilet products, window/glass cleaners and automatic dishwashing products. All these products have one thing in common: they are largely superfluous if a household employs a full-time empregada. Why? Quite simply, most domestic workers will clean windows with water and soap, toilets by hand, dishes by hand and kitchens and other surfaces using simpler products.
The empowerment of domestic workers in Brazil has therefore had an unlikely knock-on effect in terms of the home care mix, driving up sales of higher-margin convenience brands at a time when the macroeconomy is struggling. This trend is visible in other Latin American markets too. Governments in Argentina, Chile, Colombia and Uruguay have each improved the working conditions and rights of domestic workers over recent years, pushing up wages in the process. This has led growing numbers of cash-strapped middle-class households to do more of their own cleaning.
Automatic dishwashing products and in-cistern toilet cleaners were the fastest-growing home care products in Chile last year, for example. Kitchen cleaners, multi-purpose cleaners and automatic dishwashing products are outperforming the home care market in Colombia, based on 2014 sales results.
It is not only that fewer domestic workers are now employed full-time in Latin America; there is also greater labour mobility, which means young women from poorer backgrounds are eying up alternative types of employment to working as cleaners. This has further strengthened the wage bargaining power of domestic workers.
Domestic workers will be a big feature of Latin America’s workforce for some time to come, though. And they will have a big influence on the type of home care brands and products that sell. Why? For the simple reason that most domestic workers are responsible for buying and replenishing home care brands as part of their job description. Some have strict instructions on the products they should buy, but many make the purchasing decisions themselves.
Crucially, domestic workers will typically do without the more value-added cleaning products, preferring instead to use simple products such as bleach and hard hand dishwashing soaps. Many will also source their products from the informal channel, using the type of cleaning products they use in their own homes.
In Colombia, for example, there are around three quarters of a million domestic workers in the towns and cities, and most are women from low-income rural backgrounds, displaced by the long-running civil war. They will tend to do household cleaning chores with low-price, no-frills products. Economy brands like Blancox bleach and Axion hand dishwashing soap are particularly popular.
It is a measure, perhaps, of the entrenched nature of maid culture in Latin America that so many of the region’s most popular soap operas (telenovelas) feature a story line whereby a young girl from the rural countryside heads to the big city to work as a domestic worker, only to fall in love with her boss (or the boss’ son) and live happily ever after. Domestic workers often watch these soap operas while they are doing the ironing or folding the children’s clothes.
Rags-to-riches stories rarely come true like that, but there is no denying that the earning capacity of Latin America’s armies of domestic workers has improved substantially over the last decade. And it is having a big bearing on the home care market, as the region’s middle classes rein in the amount of hours they employ domestic workers and elect to do more of the household cleaning themselves.
Periods of economic crisis often throw up unexpected opportunities. And tapping into Latin America’s burgeoning demand for value-added, multi-functional and convenient home care products is one of them. It is not only the obvious categories like automatic dishwashing products and multi-purpose surface wipes that could benefit. It is categories like air care and insecticides too.
After all, with a full-time domestic worker, problems with insects or household odours are normally taken care of on a day-to-day basis without having to buy specific products. However, for growing numbers of Latin Americans, stuck in an office all day and returning to a home that is no longer being cleaned or ventilated by a full-time maid, suddenly there is an interest in home care products that they might never have thought about before. It is an opportunity in the making for home care manufacturers, and one that will get bigger over the year ahead.