The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.
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Learn moreFeb 2014
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While the Chinese market for tissue is booming and per capita consumption increases rank among the highest in the world there remain structural problems. Following a period of unprecedented capacity increases, the industry has rapidly modernised which belies the underdeveloped distribution system found outside 1st and 2nd-tier cities. The arrival of SCA through its purchase of Vinda and a dearth of small-scale producers make for an unusual and potentially hazardous competitive environment.
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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.
The global market for tissue continues to develop apace and is testament to manufacturers’ ability to produce a range of products at affordable prices in the developing world as well as consumers in the developed world continuing to see tissue as an essential element of the typical shopping basket.
China has risen to become the largest single market globally, overtaking the position previously occupied by the US. The rapid growth of tissue in China marks the coming together of a range of key drivers that have caused the market to boom in recent years.
Per capita consumption in China still remains a fraction of the levels reported in the West and even Japan, meaning that further volume growth is likely over the long term, a fact that has encouraged considerable investment in new production capacity.
Key drivers of tissue sales including disposable income and population growth have been supplemented by a combination of urbanisation, hygiene awareness as well as brand activity to maintain double-digit volume growth.
While long-term positive volume forecasts are a boon, the extent to which new capacity has been (and will be) added to the Chinese market is a concern; production volumes far exceeding demand increases will likely push the industry’s utilisation rate down so far as to compromise profitability among smaller players.
Clearly the industry is looking to both modernise and rationalise, but the pace of this development would appear to be too rapid for the market to absorb, thus producing market conditions that will see rampant competition and ultimately falling unit prices that are likely to hurt tissue specialists.
Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.