Retail Tissue in Serbia

2020 IMPACT

Retail tissue benefits from home seclusion and stockpiling during the COVID-19 pandemic

Retail tissue received a notable boost in 2020 due to the COVID-19 pandemic, with all products achieving value growth over the course of the year. On the one hand paper towels and tableware benefited from families eating at home more often during the long periods of home seclusion, while on the other hand toilet paper, already the largest area within retail tissue, witnessed strong value growth as consumers stockpiled these products early in the pandemic, as was evident in many developed countries.

Accelerated volume growth in 2020

Retail tissue recorded stronger volume growth in 2020 than in the previous year. The low increases in average unit prices of retail tissue in 2020 indicates that many consumers traded down to less expensive brands, larger pack sizes and private label lines during the pandemic.

DrenikND maintains its lead despite an environmental pollution scandal

The reputation of the leader in retail tissue, DrenikND, was somewhat questioned towards the end of 2019, when mass media reported on alleged ecologically irresponsible behaviour by the producer, which led to the pollution of waters near its facilities. The articles stated that this behaviour had been going on for years and there had been two failed attempts to ask the director of the company to solve the problem, for example cleaning five kilometres of the polluted canal.

RECOVERY AND OPPORTUNITIES

Lower volume growth going forward

Volume growth of retail tissue is set to visibly decelerate in 2021, followed by relatively stable and low rates over the remainder of the forecast period. Some Serbian households may well still have stocks of toilet paper, for example, which will last into the early part of 2021.

Strong growth for e-commerce going forward

E-commerce recorded strong double-digit value growth in retail tissue in Serbia in 2020 as many consumers took the opportunity to purchase products they needed online instead of shopping in physical outlets and risk contracting the virus. Many Serbians therefore began to use e-commerce for the first time, and, although online sales had a relatively small share at the end of the review period, the growth trend of e-commerce is expected to continue throughout the forecast period, albeit at a much slower pace of course.

Private label set to develop

Private label performed well towards the end of the review period and the same positive trend is expected to continue over the forecast period. Whilst the economic impacts of the COVID-19 pandemic undoubtedly encouraged many Serbians to seek value-for-money products in 2020, the future performance of private label will likely be less a result of the crisis and more to do with the expansion of large retailing chains, as well as the increasing trust in the quality of private label products as a whole among Serbian consumers.