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Emerging Markets Soft-Soap the Growth Picture of Global Bath and Body Care

By: Rob Walker, Euromonitor International
Posted: November 26, 2012, from the December 2012 issue of GCI Magazine.

page 3 of 3

In developed markets, discount and promotional activity will remain highly visible as brand loyalty weakens further in the face of more widespread belt-tightening. This will present opportunity for private label brands to grab market share, especially in its comfort zone of Western Europe. In the deodorant category, private label accounted for 6% of sales in Western Europe last year.

Competitive points of differentiation also will become more important in the developed markets as brands battle to win over consumers. Naturally sourced ingredients and eco-friendly packaging could start to grow in importance, for example, as issues of sustainability and social responsibility gain traction, fueled, in turn, by consumer pressure propelled by social media forums and the blogosphere.

What seems clear is that the global economy is entering a new era of tighter growth, characterized by mounting austerity in developed markets and weaker consumer confidence in emerging markets. The main implication for bath and body care will be a new squeeze on margins in linchpin emerging markets, notably Brazil and China. But global growth is unlikely to be derailed. On the contrary, there will be myriad opportunities to unlock new demand.

Rob Walker, senior fast-moving consumer goods analyst, Euromonitor International, can be contacted at rob.walker@research7.euromonitor.com.