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Decrypt 2016 Taiwan Brand Trend



Decrypt 2016 Taiwan Brand Trend

Based on long-term observation on Taiwan market, Kantar Worldpanel has revealed that Taiwan FMCG brand landscape has been gradually shifting. With the change in consumer attitudes, as well as the booming of digital media and online shopping, emerging brands has attracted consumer’s attention in many categories and turn around the situation of big brand domination. For example, small sale farmers’ milk, milk yogurt, lutein, dripping chicken essence, imported premium olive oil, imported cereal, salon/organic hair products, concentrated laundry detergent, mass cosmeceuticals skincare, mass makeup, and imported baby diapers.

Kantar Worldpanel has predicted that, along with the development of the Internet and social media, those emerging brands will face more competitors in 2016 and threat the leading position of big brands no matter they are imported or local.

According to Kantar Worldpanel, in 2015, the average value share of those emerging brands has shown a rise of 8 share points on the same index in 2013; however, the average value share of traditional big brands has reduced by 10 share points. Furthermore, the essential lindex of each brand, penetration, has demonstrated the same trend – traditional big brands have declined 3 percentage points while emerging brands have grown 5 percentage points, which is equal to the increase of 430,000 households for those emerging brands.

Why can emerging brands access to consumers? First, their brand appeal has fulfilled Taiwan consumer’s strong demand on quality and peace of mind after food safety scandal; second, those brands have capable to quickly establish reputation through social media (word of mouth) and even expand their influences; third, those brands have started their business from the Internet platform to create unique brand image. All of the above reasons are leading emerging brands to boost rapidly.

This change reflects the trend - social network has changed media ecology. On the one hand, traditional big brands have accustomed to rely on traditional media; and on the other hand, they are relatively not familiar with the operation of new media, this makes those brands hard to manage their media resource. However, the emerging brands, because of their shortage of resource, they are not hesitate to make extensive use of Internet media to develop their business, and these numerous digital platforms has in turn created a wide space for emerging brands to sustain and grow. In other words, in the past, media is one-way and purchased through money (PAID); but now, media is operated as multi-directional and needed to be closely worked with brands (OWNED), even must be obtained by the recommendations from social media (EARNED)! Hence, the key success factor of one brand will be whether its marketers can embrace this new thinking in this new era.

E-commerce also played a key role in this matter. This new channel ruled out the entry barriers for those emerging brands, by passing negotiations with traditional retailers, reducing costs and then to make those innovative new brands, which can quickly response to consumer demands, to flourish. In recent five years, online shopping has shown fast growth, and recruited 300,000 households every year in average; this trend has even continued in 2015, the year of stagnant total FMCG market (Online shopping penetration, 2015: 43.4%; 2013: 36.5%). Food begins to follow this trend. As consumers are increasingly familiar with online shopping and the recent relaxation of regulations, Kantar Worldpanel has further expected that “Mobile E-commerce” will outbreak in 2016! For example, “fresh food online shopping” could be next high-growth category and become a threat to physical retailers. It is quite possible for Taiwan consumers to purchase fresh food directly from the web shop and skip traditional market or retailers. Through observing the moms’ seriousness on using smart phones or surfing on the social network, their potentials on purchasing fresh food by scanning QR code are truly predictable.

In addition, Kantar Worldpanel has indicated another interesting trend on growing “purchased from overseas”, its penetration grew from 9% (2013) to 14% (2015).With the depreciation of yen and the euro, low oil prices and the development of cheap flight, overseas travels have continued to increase. According to government data, the number of travelling people has grew by 5% in 2015 and exceeded 10 million at the first time. Kantar Worldpanel has found that people usually bring back the products with high popularity in social media, and this reminded us that the Internet is not only providing a platform to “sell” products, it also has strong communication power which cannot be neglected. 

How can physical retailers react to this trend?

Costco could be taken as a successful case here. Since beginning, Costco has applied differentiation strategy to bring unique brands to Taiwan market, and now extended this strategy to its online store to enhance its brand breadth. In recent years, Carrefour and RT-Mart have also aggressively to develop “foreign zone” while personal care store, e.g. Watsons, has enriched its organic, herbal area and skincare counters by introducing more new brands.

Faced this threat, manufactures, especially the original leading brands, seem to be unable to find a solution. Yet, it could be a good idea to take reference from other markets to get some inspiration. P&G has launched its new store “P&G overseas products flagship store” in China, aiming to introduce star products in other markets and then to test whether Chinese consumers will favor those products. This good practice has not only taken advantage of Internet store’s characteristics: fast and low cost, but utilized the wide product lines within multi-national company to fulfill consumers’ needs, to create topic and attract consumers to discuss those products spontaneously, and then naturally reach advertising effectiveness.

In short, no matter you are retailers or manufacturers, you must master this emerging trend, and ask yourself: who will be my new competitors? How can I take advantage of resources from other markets? What products should be introduced? How to use new media? Shall I increase investment in digital media? How about e-commerce?

Now, you have the answer?

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