Euromonitor International is pleased to announce that the 2018 Tissue and Hygiene edition is now live and available to access on Passport. The updated research provides latest insights to the industry performance in 2017 and key prospects through to 2022.
KEY RESEARCH HIGHLIGHTS
- Pricing pressures stemming from increasingly tight competitive and retail landscape as well as lower income consumers create challenges for short- and mid-term profitability
- Global market leaders struggle to maintain market shares, reflective of increasingly complex market conditions and weak market fundamentals in key developed regions
- Adult incontinence continues to rise globally
- Online retail maintains strong growth trajectory, with hygiene products leading the way
- Polarised innovation trends – affordable vs premium segment
Pricing pressures cut into industry revenues and profit margins
While many economies previously hit by the recessionary trends have been in recovery mode, still significant levels of promotional activity at retail level continue to undermine profit margins globally. Recessionary trends aside, many leading brands in tissue and hygiene in the developed economies struggle to drive prices upward, due to expanding discounters, online retail and competitive activity.
Better price remains the key motivator for consumer shift to online retail. Additionally, discounters have been investing in their private label products to improve quality and consumer appeal. Furthermore, domestic and regional industry players have been seeking to expand in developing regions with still high unmet potential and long-term growth opportunities by offering a good combination of quality and affordable price.
Global market leaders remain under pressure
2017 saw stagnation and/or further erosion of global market share in retail sales of tissue and disposable hygiene products by the leading powerhouses – Procter & Gamble and Kimberly-Clark –, as many regional and domestic players continue to present a force to reckon with amid increasingly more complex market conditions and changing consumer dynamic.
While saturation and weak fundamentals (such as population growth for instance) make it hard to drive sales in the developed regions, increased competition across product tiers - from premium and super premium niche subscription services to affordable brands and private label - is one of the key culprits, too.
Adult incontinence continues to rise globally
Demand for adult incontinence products continues to grow, supported by a combination of factors, including consumer education and product normalization, growing understanding of incontinence conditions, expanding product availability in store and non-store retail, and continuous innovation.
Retail segment leads the growth, although on the whole globally away-from-home (AFH) and Rx/reimbursement products see a positive movement. However, oftentimes feeding the demand in retail are the budgetary constraints on healthcare that leads to reduction in funds available for products and continence programs in institutional and Rx spaces.
Online retail maintains strong growth trajectory
While store-based retail accounts for the majority of tissue and hygiene retail sales, online retail has been gaining significant traction across developed and a number of developing markets. This is particularly the case with disposable hygiene categories like nappies/diapers/pants and adult incontinence.
Price, convenience, and product selection remain among the key motivators behind consumer shift towards e-commerce. It is, however, important to remember that many consumers still prefer to shop in stores, calling for a more complex retail strategies on the part of manufacturers and brands seeking to capture consumer attention in the challenging competitive environment.
Polarised innovation trends
Innovation remains one of the key factors supporting brand and product dynamic. Premium segment is typically seen as the key to growing margins and revenues, and leading players like Procter & Gamble, Kimberly-Clark, and Essity have released a number of products positioned in premium and super premium segments of the market.
However, the latest innovation trends also continue to demonstrate polarising tendencies, with attention on premium segment balanced off by a range of new affordable products under both key brands as well as leading private label, such as Huggies Baby Essentials in Nigeria and latest Huggies Essentials in Australia, Aldi’s Little Journey in the US and Walmart’s Parent’s Choice Premium Diapers.