Tissue and Hygiene: Quarterly Statement Q3 2016

Tissue and disposable hygiene products demonstrate a degree of resilience

While the quarterly update shows a downgrade in the expected industry performance in retail over the period to 2020, the extent of the downgrade represents only a small proportion of the overall expected global sales and demonstrates a degree of resilience to current economic and political headwinds.

China stays its course

The world’s largest retail consumer tissue and disposable hygiene market continues on the positive trajectory ahead, with only a marginal downgrade in retail hygiene, which will not significantly disrupt the projected sales over 2015-2020. Expectations for consumer tissue have seen an uplift.

Pricing strategies in focus, but there is room for value-added products

However small, the downgrade once again brings to the fore the issue of price sensitivity, and the need for careful pricing strategies to ensure mid-and long-term consumption expansion and industry growth. Price elasticity, however, varies from market to market, and leaves some room for further product innovation and premiumisation.

Acquisitions remain on the agenda to expand category and geographic reach

Developing markets often present barriers to effective market penetration for foreign players, leading to an increased focus on acquisitions and partnerships with domestic manufacturers. This also helps to improve long-term profitability in the face of foreign currency fluctuations. Acquiring successful small innovative brands also helps geographic and category expansion.

Improving online presence to widen consumer reach and build brand relationships

Online sales of disposable hygiene products continue to grow, with more options opening up for consumers, including specialised e-tailers focusing on adult incontinence and a variety of subscription services in categories like sanitary protection. To take advantage of the evolving e-commerce space, leading manufacturers are partnering with both new and established e-tailers to ensure wider consumer reach and engagement with their brands.