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3 latest trends in Taiwan’s FMCG Household Products

26/04/2016

Winding the clock back to three years ago, Taiwan’s FMCG consumption was just starting to regain growth momentum since the global financial crisis (See Graph 1), where double digit growth in FMCG spending was observed between the years 2010 and 2012. This growth spurt can be seen across various categories including food & beverage, personal care, as well as household products. Kantar Worldpanel Taiwan observed that a common growth factor for these prospering categories was the ability to satisfy consumer’s needs for better personal/beauty care and enhanced lifestyle experience. Successful examples include greater emphasis on gum and oral sensitivity which drove the sales for oral care; anti-aging and clinical hydration products fulfilling consumer’s wish for youthful looks; Healthy RTD tea pushing the healthy trend in beverage market; home care categories including house cleansing and paper products were driven by upgraded high tier sectors.

Graph 1: Taiwan’s FMCG market is seeing declining growth in recent years

Trend 1: Trading up to better lifestyle

Now moving forward to the most recent three years (see Graph 1), growth in the market has slowed, but amid the growth decline and food safety uncertainties, high-price tier products that focus on enhancing personal wellbeing and lifestyle continued to prosper, and this growth was especially apparent in household products.  The success of the high-price household products demonstrated that with the right emphasis and answer to consumers’ needs, consumer interest can still be generated and ultimately stimulate purchase and sales.  

Take Kleenex and Mayflower for example; the two market leaders built a blossoming environment for the high-priced tissue with the launch of its three-layered tissue products.  ‘Softer, better and easier to use’, the new tissue products sends the message of a more comfortable home living which hit right in the bulls eye on Taiwanese consumer’s need, and hence pushing them to upgrade on this daily necessity.  In the latest year, sales importance of high-price tissue has reached 11% of the total tissue market (see Graph 2), and is a major stabilizer to the performance of overall household products amid decline of total FMCG market.  

Graph 2: High price three-layer tissue grew at a phenomenal rate for the past three years

Trend 2: Going Natural

Other than upgrading their lifestyle, going natural has never been bigger for the consumer market.  More than ever, consumers are now more wary of what they eat/put on them and what it does to the planet.  FMCG manufacturers are also beginning to realize the importance of natural products, with detergent market being one of the successful players amongst FMCG household categories. 

Historically laundry products have always played their emphasis on its cleaning power or non-color fading function.  However the latest success story in the market, Orange House, decided to do things a bit differently.  Launching a series of health safety, natural household cleansing products, coupled with the environment loving slogan ‘hate chemistry’, Orange House was able to create new blue ocean, attracting consumers who are willing to trade up for healthier lifestyle and environment protection.  This trend can be seen reflected in hard data (see graph 3), with buying penetration for high-end laundry products been on the uplifting trend. 

The high-end detergent market was further stimulated by the launch of Persil in 2014, where despite three times the price of market’s average, it was still able to penetrate the market with its duo caps, environmentally friendly formula; Persil quickly claimed 30% market share in Taiwan’s high-priced detergent, and helped boost market penetration for high price tier from 14% to 23%, which is equivalent to 1.9 million household buyers; this is another solid indication of Taiwanese consumers’ willingness to trade for upgrade in everyday necessity.

Graphy 3: High priced laundry detergent had been on a speedy growth for the past three years 

Trend 3: Interactive campaign is the new challenge for manufacturers

With the development of internet, consumers are becoming more and more interactive with the brands and products themselves.  They no longer just take what is served on the platter, but proactively research, collect and share information from their side.  Consumption to them is no longer just about product function, but has expanded to what the product or brand represent, and the need to connect on a more personal level. 

This is certainly affecting the way traditional marketing is being played, and places greater challenge for brands to understand their consumers.  While it is not easy analysing the contemporary shoppers, it is not impossible; through understanding their shopping motive to monitoring their end purchase, opportunities will present itself if one can dig into the underlying need, the transition of the household sector is the perfect case study for manufacturer’s future reference.

3 latest trends in Taiwan’s FMCG Household Products

Author

David Shang-Kuan

Commercial Director of Taiwan

 

+886 2 2570-0556 #309

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