Asia Pacific is the leading edible oils region globally. While India is mainly powering growth in the region, neighbouring countries such as Pakistan, Bangladesh and other developing countries are also making strong contributions to the region's growth. Edible oils is evolving as consumers are moving to packaged formats and transitioning to healthier and more premium oils. Development of modern grocery retail is expected to drive additional sales in the region.
Edible oils in Asia Pacific accounts for over 50% of global retail value share and is also the fastest growing region. India holds the largest share within the region. Quality and hygiene concerns are driving the shift to packaged edible oils in developing countries despite vast consumption of unpackaged formats. Asian countries have developed local alternatives to generic oils which address specific health needs and are perceived to be better for you including coconut, rice and flaxseed.
Goods and Services Tax (GST) was introduced in the second half of 2017 in India and the lack of clarity on the new tax regime led manufacturers to reduce production of many products including edible oils for a short period of time. The after-effects of GST were witnessed during the first half of 2018 as overall retail value growth came down and in turn affected regional growth. However, edible oils is expected to strengthen over 2018-2023 led by India and followed by other emerging countries.
Nine out of the top 10 edible oils companies are based in China and India, and mainly sell in their respective countries. Two prominent brands Arawana and Fortune hold the leading positions in the region with presence in more than one country. Wide variety of edible oils, heavy promotions coupled with brand trust over quality has helped the companies to retain the top spots.
Traditional grocery retailers such as kirana stores are spread widely across Asia Pacific which sell mainly unpackaged and small volume pack sizes. Since lower income groups make up the highest percentage of the region, they rely on cheaper products sold through such retailers. However, supermarkets, hypermarkets and internet retailing are preferred options in the developed countries and China.
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