The global tissue and hygiene retail landscape continues to experience shifts in consumer shopping habits. Developed economies are seeing the expansion of grocery discounters and in turn the growth of private label, resulting in declining unit prices. Meanwhile, online retail is expanding across the globe, in both developed and developing markets. E-commerce allows consumers easily to shop for the best price and evaluate competing products, and allows manufacturers to expand their distribution.
Discounters only account for 5% of global retail tissue and hygiene sales. The channel is much stronger in developed regions, such as North America and Western Europe. Markets in these regions have seen average unit price of tissue and hygiene products decline as discounters continue to expand. As discounters increasingly improve the quality of their products and attract consumers with low prices, profit margins in the industry will continue to be challenged.
Private label sales continue to grow in both retail tissue and hygiene, though retail hygiene has seen private label growth slow down in recent years. Private label tissue has benefited from struggling economies where consumers have seen their disposable incomes fall, such as Russia. In other markets, private label manufacturers have expanded their offerings to include more premium brands, catering to the need for good quality products at low prices.
Retail hygiene products lend themselves well to sales via e-commerce. The additional discretion in e-commerce also helps drive growth in sales of products such as adult incontinence, which many consumers may not be comfortable purchasing in a store. Consumers looking for cost savings and convenience are likely to resort to purchasing online. The growth of subscription services, which have mostly focused on retail hygiene, also helps drive further growth.
Both consumer tissue and disposable hygiene are expected to see positive growth in retail value sales between 2017 and 2022, driven in large part by the unmet potential in many developing markets. It is important to take into account the differences in channel distribution in these markets, such as the importance of independent small grocers in certain markets, to inform go-to-market strategies.
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