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Bath and Shower: No Longer a Drain

By: Briony Davies
Posted: March 5, 2007, from the March 2007 issue of GCI Magazine.

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Japan, India and China lead the bath and shower products sector in Asia-Pacific, accounting for 30%, 22% and 18% of regional sales, respectively, in 2005. The sector is mature in Japan, and the slowing growth has forced marketers to focus on adding value to retain an edge. India and China, on the other hand, are underdeveloped with huge growth prospects, and the emphasis is on raising penetration rates.

A major value generator with a modest upturn in 2005, Japan proved not to be the drag on Asia-Pacific’s growth that it had been in previous years (when growth was viewed in local currency terms). However, the country’s bath and shower products sector is not out of the woods yet. Sales of talcum powder, liquid soap and bar soap all declined in 2005 due to falling birth rates, commoditization and strong price competition; though, as in other developed countries, body wash/shower gel was the one sector that showed strong value gains. The sector benefited from the development of pampering at-home spa and aromatherapy variants—such as Lux Spa Moist Orange Bloom Body Soap by Unilever, launched as a Japanese brand extension in 2005.

In India, value growth is being driven by bar soap. Manufacturers are dropping pack sizes to reduce unit prices, thereby bringing products within the reach of the country’s less affluent majority. There also is a push to widen penetration to India’s rural poor. Unilever’s Swasthva Chetna (“health-awakening”), launched in partnership with the Indian government, teaches the importance of hand washing in approximately 18,000 villages (in eight states) and reaches 70 million rural dwellers. Bar soap sales in India rose by almost 7% in 2005 to $1.1 billion.

In the country’s more affluent western states, body wash/shower gel is beginning to find demand, although it remains nascent with sales of just $9 million (or less than 1% of total bath and shower products sales) in the country as a whole. The importance of India as a region for multiproduct growth will wane as consumers continue to focus their spending on bar soap and talcum powder—two areas with limited scope for value-adding innovations.

Looking forward, China will continue to top Asia-Pacific growth tables, even as Indonesia is expected to emerge as a dynamic new market—with potential coming from its improved economy, political stability and large population base—through 2010. South Korea is also a key market to watch, being relatively undeveloped in bath and shower products despite having a large and relatively affluent population.

Mature Markets Show Sluggish Growth