The Future of Surface Care in Modern Living: Asia Pacific – Japan and The Tigers

Strategy Briefing

About This Report

Aug 2015

Surface care is projected to generate the second most value growth over 2014-2019 within the global home care industry, thanks to its essential status in consumers’ home care regimes. Almost half of value sales growth is set to be generated by Asia Pacific, a region that contains developed, emerging and frontier countries. This report analyses the features and assesses the growth potential in these three types of market, which may have implications for other countries around the world.

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The Future of Surface Care in Modern Living: Asia Pacific – Japan and The Tigers

Asia Pacific a unique regional market

Asia Pacific is set to lead the world in terms of value growth in surface care over 2014-2019, with forecast absolute value growth in excess US$1.1 billion, accounting for half of the global total. Growth potential could be further boosted due to its unique regional characteristics, combining developed, emerging and frontier markets.

China to lead the region in surface care growth

Surface care consumption is set to become mainstream in China, driven by rising disposable incomes and the Westernisation of home care culture. Demand by format is closely related to lifestyle and living environment, which exposes underdeveloped categories that appear ripe for further development, such as floor cleaners, and wipes and floor cleaning systems.

Japan indicates future consumption patterns

Japan is arguably the most advanced economy in the region, and demand for surface care has become highly saturated. While the market still has opportunities for growth, especially for products orientated towards its ageing population, its position as a generator of future trends may outweigh its overall growth potential.

Frontier markets offer long-term opportunities

While India is home to a huge population (second only to China), it offers only limited growth potential, as a result of low average incomes and the prevalence of alternatives. Indonesia, however, appears to offer a much more appealing opportunity, given its strategic importance in terms of geographic location in Southeast Asia. It combines large households and consumers’ attitude of “spend rather than save”, which has hastened the development of more modern modes of living.

A varied Asia Pacific requires multiple approaches

Overall, potential for growth in Asia Pacific exists in all three economic clusters, meaning companies looking to dominate the region require a multidiscipline approach to span three very different market realities.

Introduction

Scope
Key findings
The importance of surface care
High spend in developed regions but limited potential
Asia Pacific leads developing regions in value growth
All eyes on Asia Pacific
Defining the cluster of markets

Surface care drivers

Surface care hierarchy review
What are we talking about?
Premium drives value growth in developed countries
Mass products generate rapid growth in emerging markets
Substitution offers transition opportunity in frontier markets
Market drivers for surface care

Overview of Asia Pacific

Analysis criteria

Japan

Income and premium focus
Category development
Surface care overview in Japan
Growth potential can be boosted
The young and old place emphasis on convenience
Adding value for ageing population and everyone
Growing female workforce: Surface care contracted out
Demand on machine convenience remain strong in Japan
Machines offer potential in supplementary surface care products
Potential in further boosting wipes consumption
Eating out culture reduces consumption in kitchen cleaners
Less eating out, more cleaning

Japan’s Medium Term Outlook

The pinnacle of development?
Key growth areas
Kitchen and multipurpose
Japan as Asia Pacific archetype?

Developed Markets: Asian Tigers

Tradition matters
The four tigers
Surface care in the “tiger” economies
South Korea drives sales
Similar yet different
Urbanisation a double-edged sword for surface care demand
Home care cleaning systems and wipes are underdeveloped
Automated cleaners may offer potential for growth
Culture of domestic help: A challenge to be addressed
A lesson from Brazilian maid service

Tiger’s Medium Term Outlook

Surface care stasis?
Asian tigers forecast

Developed Market Conclusions

The struggle ahead
In conclusion: P remiumisation the way to go
Emerging markets the key growth driver in surface care
Still room for improvement in developed economies
Different market has different needs