Overview of the Tissue and Hygiene Market
Retail tissue demonstrates modest growth in 2016
While consumer tissue products continue to face significant pricing pressure and high levels of household penetration in the developed regions, the industry generated modest positive growth throughout the review period and in 2016.
Retail Tissue Market Size and Percentage Growth
Source: Euromonitor International
Economic and political challenges in a number of markets, which led to consumer shifts in purchasing habits and preferences, were a drag on industry revenues, and contributed to the slowing rate of growth overall globally, in both value and volume terms.
Unmet potential and growth in the developing markets
Consumer tissue and disposable hygiene industries continue to see a shift in sales towards the developing markets with still significant unmet potential, while developed regions of North America, Western Europe and Australasia struggle with market saturation.
Opportunities in the developing markets are also reflected in the increasing proportion of sales generated by key global players in emerging markets. However, opportunities in developing regions do not always translate into strong sales and profit margins, and increasing competitive pressures create further challenges for share growth. A vast low income consumer base, financial and political instability and exchange rate fluctuations can be a significant drag on industry revenues.
Private label records positive growth in tissue
With an already high level of household penetration in developed regions, especially in Western Europe, private label tissue products continue to record growth globally. Growth is further supported by the expansion of modern retailers in developing regions. Significant investments by retailers into private label portfolios, including expansion of price segments from value to premium and super premium, help private label products to keep pace with branded innovations and advancing technologies in consumer tissue production.
Key manufacturers of private label products, such as Italian based Sofidel, continue to invest in manufacturing facilities and geographic expansion. Some retailers have also been actively investing into production and manufacturing facilities, sometimes operating their own tissue mills to control quality and supply of products.
Need for clear e-commerce strategies as online sales to expand further
Global retail sales of consumer goods, including tissue and hygiene products, through online channels are expected to expand further, with continuing double-digit gains across most regions. To successfully capture digital shoppers, especially in developing markets, manufacturers and retailers need to build dedicated ecommerce/m-commerce strategies, and carefully assess consumer preferences and capabilities in specific markets, such as the ability to use credit cards vs the need to accommodate cash payments, delivery methods, product selection, and consumer communication.
Global Internet Retail Growth
Source: Euromonitor International
Considering that price remains the top motivator for the majority of consumers globally, profit margins in an already increasingly competitive environment will continue to be challenged. At the same time, consumers searching for the best deals and services creates an opportunity for e-tailers to further consider private label as an opportunity.