Nature’s appeal drove sales for high-end personal cleansing
In the previous month, Kantar Worldpanel Taiwan shared insight on how household care market is holding its ground despite slowdown in Taiwan’s overall FMCG performance, much thanks to the prospering high-end market. This up-trading trend is now also apparent in the personal cleansing sector (namely shampoo, shower gel and soap), with consumer’s growing favouritism for high quality, environmentally friendly products being the main growth factor. This ‘nature’s appeal’ trend is not only driving growth but also sparking a turf battle between personal cleansing categories; so who’s winning? And who’s losing ground?
Wash & Grow: Natural ingredient & hair growing benefit boosting purchase
For several years, Kantar Worldpanel Taiwan has observed the continual migration of shopper preference from the lower end towards the peak of the price pyramid in the shampoo market, with the latest data showing an 18% YoY sales growth (2015 vs. 2014). This impressive performance of high-end shampoo allowed the market to maintain stability amid decline of the low-end sector. While product innovation and fancy marketing contributed to the market performance, ultimately it is down to the products itself which fulfilled consumers’ inner needs that was the key growth factor. For several years Taiwan had been struggling with food safety issues, and this has lead to consumers being more cautious about their buying choices, and not just for food. Under this trend, products that emphasize on simple, natural ingredients will obviously attract more attention, and effectively raise willingness to purchase. Kantar Worldpanel observes from the shampoo market, natural, herbal ingredients as well as product functions that claims repair, healthy growth are in fact the benefits that drive consumers to upgrade to high-end market.
High-end shower products holds its ground, but could not fend off the threat from soap
From head down to body, it was also obvious that high-end products were the prima donna of the market. In 2015, amid an 8% decline of total shower gel market, high-price shower gel managed to maintain positive performance, but this was not enough to support the overall market, with ‘soap’ becoming an imminent threat.
The return of the soap market is another indication that ‘going natural’ is what the consumers love now. For a long time manufacturers were certain that soap will gradually retire from the personal cleansing market, however with the rising awareness for a better environment, this has translated into a whole new business opportunity for the once withering category. In comparison to shower gel, soap formula were viewed as more natural and simple, which is just in sync with the current market trend. Kantar Worldpanel Taiwan noticed that more and more shower gel buyers are switching to soap, pushing the soap market to strong growth for the past three years, and a 12% sales increase observed for the latest year (2015), with high end soap brands being the key growth contributors. Combining the overall trend observed from the personal cleansing categories, one can safely say that consumers nowadays are more than willing to pay more for better quality and safety usage.
Also what’s interesting is that this growth trend is not happening in hyper or supermarkets, but were driven by internet, department store and direct sales, which traditionally were not the key players for personal care categories. With internet shopping developing at a phenomenal rate, and department stores/direct sales focusing on niche high-end market, this shows that the market is becoming ever more sophisticated, and this definitely presents challenges for the manufacturers. Other than pinpointing consumer needs, there are much more complicated matters to take into consideration, take the shower gel manufacturers for example, do they stick with familiar territory? Or brave the fight with their own soap products? Which channels should take the main focus? And how to effectively allocate resources in the ever more complicated market channels? What would you do if it were up to you to decide?