Lower purchasing power changes consumers’ shopping patterns
2013 was a good year for home care in South Africa. Even though consumers had to face difficult economic conditions, such as lower purchasing power, home care was dynamic thanks to growing demand for cheaper but still efficient alternatives. Nonetheless, the fragile economic climate led consumers to cut back in order to save, resulting in a quest for more affordable products. This therefore gave private label the opportunity to become a fierce competitor to branded products, thanks to the high quality of these products.
The impact of inflation on home care
Inflation and the rising cost of living impacted consumers’ purchasing patterns in South Africa. Consumers became more price-conscious due to the high level of unemployment and the poor prospect of pay increases. This therefore led retailers and brand owners to remain dynamic in terms of the competition, Price discounting and promotional activities reached an important level in 2013, to maintain sales and encourage consumers to spend. This was also boosted by massive advertising campaigns in order to gain more brand recognition and loyalty, contributing to the value growth of home care in 2013.
A challenging competitive landscape
Home care is very dynamic, driven by the strong presence of international players such as Unilever South Africa, domestic manufacturers such as Tiger Brands and private label. International players enjoy strong brand recognition thanks to global leading brands and the ability to offer products targeting specific consumer groups. Private label gained popularity within home care in South Africa, as consumers looked for affordable alternatives due to their restricted purchasing power.
The dominance of supermarkets
Supermarkets remained the leading distribution channel within home care in South Africa in 2013. This distribution channel offers more convenience to consumers in terms of wider product ranges, promotional activities and price competition. In addition, price promotions in supermarkets enabled retailers to maintain a certain level of volume sales, also resulting in an increase in value sales in 2013.
Value sales growth expected to 2018
Home care is expected to continue to register value growth in South Africa over the forecast period at constant 2013 prices. Consumers are expected to maintain a certain level of purchasing thanks to growing health concerns, such as bacteria and germs due to rising pollution in urban areas. Nonetheless, value growth is expected to be slower than in the review period at constant 2013 prices, due to predicted sluggish economic growth resulting in slow growth in job prospects. Consumers are therefore expected to move to cheaper alternatives in order to save.
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The Home Care in South Africa market research report includes:
- Analysis of key supply-side and demand trends
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
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- What is the importance of the trend towards environmentally friendly products in home care?
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This industry report originates from Passport, our Home Care market research database.