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Balancing on a Bubble

By: Carrie Lennard, Euromonitor International
Posted: September 3, 2009, from the September 2009 issue of GCI Magazine.

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Different marketing approaches were used to reach consumers and try to establish a greater degree of consumer brand loyalty. Colgate-Palmolive’s Aromatherapy Happyful range illustrated a trend in which brands used emotive claims about their products rather than simply emphasizing the products’ cleansing/moisturizing properties.

Regional Activity

Just as sales in Western markets begin to show signs of slowing, rising disposable income levels brought about by greater economic stability in emerging regions are generating growth in bath and body and helping to offset the decline seen in the West. In 2008, the four BRIC nations (Brazil, Russia, India and China) alone accounted for 24% of the total bath and body segment. In body care, the figure is slightly lower at 18%, as body moisturizing products have yet to become seen as an essential item in these regions. Latin America topped regional growth with an impressive 15% rise in value sales in 2008, and Brazil now accounts for $6.9 billion, making it the second largest single market for bath and body care after the U.S., as Brazilian consumers continue to trade up from bar soap to liquid soap and shower gels, fueled in no small part by promotional activities from direct selling companies, particularly Avon.

Asia is a burgeoning growth area, with India, in particular, set to add an extra $509 million to the size of its bath and body care market by 2013. Grooming and personal care are being given an ever-increasing emphasis in the country, and newly wealthy urban consumers are looking for something different and sophisticated—even in everyday activities such as bathing. Even in the notoriously difficult to penetrate rural areas, major companies, such as Colgate with its Palmolive Aroma Vitality shower brand, are successfully using sachet marketing to target lower-income consumers.

In all of the emerging regions, deodorants are enjoying a surge in sales, particularly among new middle-income consumers. Women, who are increasingly entering the workplace, are purchasing these products, as appearance and grooming become more important to their professional lives. Additionally, poorer consumers often use them in the place of more expensive fragrances. This is particularly true in Latin America, which is set to add an extra $956 million to its deodorants market by 2013.

Untapped Opportunities Remain

As traditional key markets such as the U.S. are set for very lackluster sales (0% value growth forecast over 2008–2013 for bath and body care), brand owners should continue to focus their attention on consumers in emerging regions, not least because consumers are far less jaded by a multitude of brands all trying to make themselves heard.