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Top Three Trends Shaping Home Care in Southeast Asia

4/3/2023
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In 2022, Southeast Asia accounted for 19% of home care sales in Asia Pacific, second only to China. It is a dynamic region, which offers immense growth potential. Southeast Asia is home to high growth economies such as Indonesia, Philippines and Vietnam which, as per Euromonitor International’s data, are expected to grow faster than China over the forecast period. The region’s home care industry grew by 7% in retail value terms in 2022, reaching sales of USD9.6 billion.

Towards the end of the forecast period in 2027, home care in Southeast Asia is expected to reach a retail value market size of USD12.5 billion, with laundry care being the biggest contributor. Format evolution, e-commerce potential and innovation around sustainability are three trends that are expected to support this performance.

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Format evolution in laundry care

Home care formats across categories are evolving. As consumer awareness and purchasing power increase, there is a growing preference for more sophisticated formats. Analysing laundry care in particular, while powder detergents is the established format in the region, this preference is shifting as consumers are increasingly opting for liquid detergents instead. Ease of usage and storage, wider retail availability at more affordable price points, growing consumer awareness and rising disposable income levels are some factors supporting this shift.

Beyond liquid detergents, the presence of liquid tablet detergents is also expanding in the region. As evident from the chart below, both Singapore and Malaysia are expected to see increasing contribution from this format in the coming years. In Singapore, this is the most dynamic format in terms of growth within laundry care, supported by innovative product launches, promotional deals on e-commerce platforms and consumer desire for convenience. In Malaysia, brand variety is supporting its performance, along with viral TikTok trends that are helping to push its popularity among urban consumers.

While the bulk of consumers are still making a switch from powder to liquid detergents, there are segments that are moving towards liquid tablet detergents as well. This means that the right product strategy and price segmentation will be essential for brands to capture these growth areas.

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E-commerce and the importance of digital engagement

Asia Pacific stands as the region with significant opportunities for e-commerce. In Southeast Asia, e-commerce platforms such as Lazada have experienced a surge in demand for home care products such as laundry care.

A significant trend in the region is the shift towards digital engagement. E-commerce players are leveraging social media and messaging platforms to drive sales. For instance, across markets in Southeast Asia, Shopee has been actively using Facebook to promote discounts for home care brands. Besides social media, Lazada in Malaysia has also utilised WhatsApp to advertise a range of products to its consumers. Manufacturers are actively communicating promotions or sales campaigns through their social media pages with links connecting to their online stores. Digital engagement allows home care brands to build a community around their products which would improve visibility and help build brand loyalty.

An approach to digital engagement is livestreaming, which is becoming a popular approach for e-commerce platforms in Asia Pacific.

Asia Pacific has the highest percentage of respondents that use livestreaming/selling for household essentials such as cleaning supplies

Source: Euromonitor International’s Voice of the Consumer: Digital Survey 2022

Top Three Trends Shaping Home Care in Southeast Asia Chart 3.svgSustainability in packaging and formulation

Consumers are increasingly searching for more sustainable packaging options and eco-friendly formulations.

When it comes to packaging, refill stations are one approach that brands have been observed deploying in the region. In Indonesia, Qyos by Algramo is piloting a vending machine in Jakarta. Leading home care player, Wings Corp, partnered with Qyos in 2021 to offer its So Klin laundry detergent brand through the latter’s vending machines. Similar initiatives have also been observed in Thailand, Singapore and Malaysia by local and global players.

Along with packaging, product formulation is also a space where home care players are launching more eco-friendly alternates. Unilever Vietnam, for instance, has applied the “Carbon Rainbow” model to its product development - a 4-tier model that classifies the different sources from which carbon is being captured. It is the first Unilever unit in Asia to use the bio-based Rhamnolipid cleaning agent in Sunlight Gentle products. Other brands such as Omo, Vim and Comfort are also seeing formulation-based innovation emerging.

Industry players have started to realise that achieving their sustainability targets can also translate into improving profitability. Thus, sustainability should be a long-term focus and businesses should continue driving it.

To learn more about sustainability in home care explore the Euromonitor International report on Approach to Environmental Sustainability in Home Care.

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