Home Care in the United Arab Emirates
Report Summary Slower growth for home care as the effects of the recession persist The fallout from the global financial crisis is still taking its toll on the home care industry in the United Arab Emirates although the economy is on the verge of recovery. The post-crisis impact has been a smaller population and weaker population growth, trading down to cheaper brands and lower consumer confidence. Nevertheless, 2010 marked an improvement in the economic climate and in the home care industry compared to the previous two years, thanks partly to the efforts made by manufacturers and retailers in terms of product innovation and discounting and marketing activity in an effort to improve consumer confidence. Manufacturers concentrating on product innovation to stimulate sales As the United Arab Emirates home care market has not fully recovered from the fallout of the economic downturn, manufacturers have relied on product innovation to stimulate growth. Firstly, manufacturers have started focusing on the convenience factor as evidenced by the expansion of concentrated fabric softeners and growing demand for specialised products, thus moving away from mixing bleach and other economy-type products. Secondly, growing environmental awareness has spurred the emergence of green products, which has been witnessed in laundry care for example. Thirdly, rising health awareness has come to benefit brands offering maximum protection from germs and viruses. Multinationals extend their offerings while private label products enter the mainstream Multinational companies/brands continue to lead all home care categories, emphasising their wellestablished presence in the United Arab Emirates, high quality, product innovation and reasonable pricing for most products, while domestic products are finding it difficult to compete with these brands. On the other hand, post-crisis price-consciousness has led to trading down to cheaper brands and more importantly the rise of private label products into the mainstream. This rising competition from private label products has not posed a threat to domestic manufacturers as they have collaborated with the leading grocery retailers to produce their respective private label lines. Supermarkets/hypermarkets lead distribution and influence home care sales In the United Arab Emirates where traditional retailing has a minor presence, supermarkets/hypermarkets continued to be leading distribution channel for home care products over the review period and in 2010. In addition, these outlets influence purchasing decisions and market growth in many ways, for example through discounting. Rising costs of production and construction towards the end of the review period, along with product innovation and the launch of value-added products, have all led to higher average unit prices. However, discounting activities, launched jointly between manufacturers and retailers, partly offset these rising prices.
Lower growth forecast, albeit alongside rising sophistication and premiumisation As the effects of the economic slowdown fade over the forecast period, home care is expected to witness steady growth although this will be lower than that seen over the review period in light of the smaller population and weaker population growth. Following a period of trading down to cheaper economy brands and private label products, the market is expected to witness rising premiumisation and sophistication over the forecast period, manifested by buoyant demand for green products for example. Against the historical trend among low and some mid-income earners of mixing bleach with other products for use around the house, rising awareness is likely to drive growing demand for taskspecific home care products. TABLE OF CONTENTS Home Care in the United Arab Emirates - Industry Overview EXECUTIVE SUMMARY Slower growth for home care as the effects of the recession persist Manufacturers concentrating on product innovation to stimulate sales Multinationals extend their offerings while private label products enter the mainstream Supermarkets/hypermarkets lead distribution and influence home care sales Lower growth forecast, albeit alongside rising sophistication and premiumisation MARKET INDICATORS Table 1 Households 2005-2010 MARKET DATA Table 2 Sales of Home Care by Category: Value 2005-2010 Table 3 Sales of Home Care by Category: % Value Growth 2005-2010 Table 4 Home Care Company Shares 2006-2010 Table 5 Home Care Brand Shares 2007-2010 Table 6 Penetration of Private Label by Category 2005-2010 Table 7 Sales of Home Care by Distribution Format: % Analysis 2005-2010 Table 8 Sales of Home Care by Category and Distribution Format: % Analysis 2010 Table 9 Forecast Sales of Home Care by Category: Value 2010-2015 Table 10 Forecast Sales of Home Care by Category: % Value Growth 2010-2015 DEFINITIONS Summary 1 Research Sources Home Care in the United Arab Emirates - Company Profiles Ditra Sitra (Dubai) in Home Care (United Arab Emirates) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND PRODUCTION COMPETITIVE POSITIONING Summary 3 Ditra Sitra (Dubai): Competitive Position 2010 Gulf Centre for Soap & Chemical Industries LLC in Home Care (United Arab Emirates) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND PRODUCTION
COMPETITIVE POSITIONING Summary 5 Gulf Centre for Soap & Chemical Industries LLC: Competitive Position 2010 Air Care in the United Arab Emirates - Category Analysis HEADLINES TRENDS Despite the decelerating growth of spray/aerosol air fresheners, new product launches in electric air fresheners drove the category forward in 2010. Spray/aerosol air fresheners have started to lose share to slow-release variants such as electric air fresheners and gel air fresheners, which offer greater convenience to increasingly busy consumers. This trend was quite common among high-income earners, with some trial purchases also coming from mid-income households. COMPETITIVE LANDSCAPE Reckitt Benckiser led air care in 2010 with a 28% retail value share thanks to a strong portfolio including both Air Wick and Dettol, which enjoy considerable brand loyalty. Both brands benefited from product innovation and growing demand for electric air fresheners and gel air fresheners. Air Wick benefited from its regular in-store promotions and new product developments, the latest of which included Freshmatic with Freshmatic i-motion and Freshmatic Compact i-motion. The company’s flagship brand benefited from its positioning across home care as one of the most efficient brands in killing germs and viruses. Regular in-store promotions fuelled demand for both Dettol Neutra Air Aerosols and Freshmatic. PROSPECTS Air care is expected to see stronger growth rates once the economy recovers. In line with this, manufacturers are likely to step up their efforts in terms of new product launches, coupled with intense marketing support in the form of advertising and promotions. Nevertheless, the category will fail to experience growth rates similar to those of the review period as many consumers are becoming more conscious of hygiene standards and prefer to eliminate the causes of odours, and therefore will not need air fresheners as much as they did previously. CATEGORY DATA Table 11 Sales of Air Care by Category: Value 2005-2010 Table 12 Sales of Air Care by Category: % Value Growth 2005-2010 Table 13 Air Care Company Shares 2006-2010 Table 14 Air Care Brand Shares 2007-2010 Table 15 Forecast Sales of Air Care by Category: Value 2010-2015 Table 16 Forecast Sales of Air Care by Category: % Value Growth 2010-2015 Bleach in the United Arab Emirates - Category Analysis HEADLINES TRENDS On the one hand, bleach continues to be viewed negatively by many consumers on account of its adverse effect on clothing. On the other hand, bleach remains a mainstay category in home care, well supported by its efficiency in killing germs and viruses and its low unit price. Firstly, bleach, and especially a brand like Clorox, has been positioned as an efficient product in terms of killing germs and viruses, which proved a strong selling point amid the outbreak of the H1N1 pandemic in 2009. Secondly, tough economic conditions have sustained the usage of bleach along with other products used in cleaning ‘cocktails’ which can compete directly with specialised products such as bathroom cleaners etc. COMPETITIVE LANDSCAPE Abu Dawood Industrial Co extended its lead in bleach in 2010 with a retail value share of 43%, up half a percentage point on 2009. The company’s Clorox brand elicits strong customer loyalty in the United
Arab Emirates to the extent that most consumers refer to bleach as Clorox. In addition, the brand’s share increased particularly in 2009 as consumers focused on purchasing products that promised the greatest protection against germs and viruses, and Clorox – along with Dettol – is widely perceived as one of the most efficient brands in this area. Oman’s National Detergent Co remained in second place with a retail value share of 17% through its Javex brand, while Reckitt Benckiser ranked third with a share of 10% via its Jik brand. PROSPECTS Although there is little awareness of the hazards associated with the use of bleach, it is widely anticipated that the forecast period will witness strong company activity in terms of launching green bleach products. The environmental credentials of home care products are still not as important in the United Arab Emirates as they are in Europe or the US, and green products will accordingly be launched in the United Arab Emirates as niche products not yet designed to appeal to the mass population. Higher usage of green products is expected among high-income earners. CATEGORY DATA Table 17 Sales of Bleach: Value 2005-2010 Table 18 Sales of Bleach: % Value Growth 2005-2010 Table 19 Bleach Company Shares 2006-2010 Table 20 Bleach Brand Shares 2007-2010 Table 21 Forecast Sales of Bleach: Value 2010-2015 Table 22 Forecast Sales of Bleach: % Value Growth 2010-2015 Dishwashing in the United Arab Emirates - Category Analysis HEADLINES TRENDS 2010 saw green products and private label enter the mainstream, with the category’s dynamism driven by new product developments in both areas. Green dishwashing products had been introduced in 2009 with the arrival of brands like Clorox Green Works and Ecover. However, the penetration of these products was limited to the tune of 5% and to Western expatriates. Consumer awareness of environmental issues still does not compare with Western standards, but growth prospects are there and have reflected upon demand for green dishwashing products. On the other hand, the global financial crisis resulted in rising cost-consciousness among many consumers, who started trading down to cheaper dishwashing products to tackle the economic downturn. Such demand has been met by a growing supply of dishwashing products, mostly hand dishwashing, from leading supermarkets/hypermarkets. COMPETITIVE LANDSCAPE Procter & Gamble Gulf FZE led dishwashing products in 2010 with a retail value share of 49%, benefiting from strong consumer loyalty to the Fairy brand and the company’s longstanding presence in the market. During 2010, Fairy maintained its regular promotional offers to stave off competition from archrivals Lux, Pril and Dac. Promotional offers either took the form of 15% additional volume or three packs for the price of two. The Fairy brand also continued to offer a diversified portfolio of standard and premium variants. In addition to its flagship Fairy Original standard brand, premium products include Fairy Antibacterial Action, Fairy Dishwasher Tablets and Fairy Clean & Care. PROSPECTS Automatic dishwashing is expected to flourish over the forecast period thanks to the rising household penetration of dishwashers and increasingly busy lifestyles. The former reliance on domestic help will continue to decline over the forecast period as consumers look to cut costs, a factor that will drive demand for automatic dishwashing products. Manufacturers will in turn realise the potential of this category as dishwasher penetration grows, introducing a wider variety of products to the market.
CATEGORY INDICATORS Table 23 Household Penetration of Dishwashers 2005-2010 CATEGORY DATA Table 24 Sales of Dishwashing by Category: Value 2005-2010 Table 25 Sales of Dishwashing by Category: % Value Growth 2005-2010 Table 26 Dishwashing Company Shares 2006-2010 Table 27 Dishwashing Brand Shares 2007-2010 Table 28 Forecast Sales of Dishwashing by Category: Value 2010-2015 Table 29 Forecast Sales of Dishwashing by Category: % Value Growth 2010-2015 Insecticides in the United Arab Emirates - Category Analysis HEADLINES TRENDS Despite rising health and environmental awareness, spray/aerosol insecticides continued to account for the majority of overall sales in 2010. However, this dominant category posted a weaker growth rate than in 2009 as consumers either shifted to sophisticated and healthier alternatives or resorted to periodic pest control. Other consumers not concerned about health issues remained fairly satisfied with existing products. COMPETITIVE LANDSCAPE SC Johnson & Son Inc continued to lead insecticides in 2010 with a retail value share of 42% thanks to its Raid and Baygon brands which both enjoy strong consumer loyalty in the United Arab Emirates. Nevertheless, neither Raid nor Baygon were the best-selling brand, with this position held by Pif Paf from Reckitt Benckiser. In addition to the presence of both Raid and Baygon in the mainstay spray/aerosol category, both have expanded into electric formats. In the spray/aerosol category, both brands benefited from odourless launches, which are very much in demand amidst rising health awareness. Reckitt Benckiser ranked second with a retail value share of 31% thanks to its Pif Paf brand. PROSPECTS The insecticides category is expected to be influenced by rising health consciousness over the forecast period. As people become more and more concerned about protecting themselves and their families from insects and insect-related health problems, demand for insecticides and pest control is expected to increase. Manufacturers in turn are expected to tap into this health awareness with product innovation revolving around natural ingredients and odourless functionality. CATEGORY DATA Table 30 Sales of Insecticides by Category: Value 2005-2010 Table 31 Sales of Insecticides by Category: % Value Growth 2005-2010 Table 32 Insecticides Company Shares 2006-2010 Table 33 Insecticides Brand Shares 2007-2010 Table 34 Forecast Sales of Insecticides by Category: Value 2010-2015 Table 35 Forecast Sales of Insecticides by Category: % Value Growth 2010-2015 Laundry Care in the United Arab Emirates - Category Analysis HEADLINES TRENDS As the United Arab Emirates’ economy had not fully recovered from the effects of the global financial crisis in 2010, manufacturers relied on product innovation to stimulate sales. On the one hand, the post-crisis impact of trading down to cheaper brands prevailed in 2010 for the second year in a row and private label gained from the country’s economic climate, but only at the expense of secondary and tertiary brands. On the other hand, primary brands maintained their grip over laundry care and relied heavily on product innovation to retain their lead. There was a remarkable push by leading
multinational manufacturers in the areas of concentrated liquid fabric softeners and fine fabric detergents. Firstly, 2010 marked the strong arrival of concentrated liquid fabric softeners from archrivals Comfort and Downy in a move to gradually drive consumers away from standard softeners towards concentrated formats. Secondly, manufacturers capitalised on the earlier launch of fine fabric detergents like Persil Abaya Shampoo, which was replicated by other manufacturers, and also launched products specifically for other garments. COMPETITIVE LANDSCAPE Procter & Gamble Gulf FZE retained its lead in laundry care in 2010 with a retail value share of 57%, down slightly from the previous year. The company’s dominance can be attributed to its wide product portfolio which enjoys strong customer loyalty. This portfolio mainly includes Ariel and Tide in laundry detergents and Downy in fabric softeners. In addition to the good positioning of these brands, Procter & Gamble Gulf FZE continued its advertising and promotional activities in 2010, notably running several promotional offers on Ariel and Downy to meet the demands of cost-conscious consumers. Although there was some trading down in 2010, this trend mostly took its toll on secondary and tertiary brands rather than established brands like those from Procter &Gamble. Henkel Dac and Binzagr Lever Ltd followed in second and third place with retail value shares of around 8% each thanks to the popularity of their Persil and Omo brands, respectively. PROSPECTS The underlying forecast trend is that laundry care will experience some degree of premiumisation and sophistication. In addition to the rise of green products, the category can expect some trial purchases of detergent tablets and liquid detergents as economic conditions improve. All of these green products, detergent tablets and liquid detergents were launched towards the end of the review period; however, low consumer spending has deterred their penetration beyond Western expatriates. It is anticipated that the general appreciation of green products and rising environmental awareness will support their performance over the forecast period. Product innovation and continuous marketing activities are likely to be key factors triggering demand for these premium and sophisticated products. CATEGORY INDICATORS Table 36 Household Penetration of Washing Machines 2005-2010 CATEGORY DATA Table 37 Sales of Laundry Care by Category: Value 2005-2010 Table 38 Sales of Laundry Care by Category: % Value Growth 2005-2010 Table 39 Sales of Laundry Aids by Category: Value 2005-2010 Table 40 Sales of Laundry Aids by Category: % Value Growth 2005-2010 Table 41 Sales of Laundry Detergents by Category: Value 2005-2010 Table 42 Sales of Laundry Detergents by Category: % Value Growth 2005-2010 Table 43 Laundry Care Company Shares 2006-2010 Table 44 Laundry Care Brand Shares 2007-2010 Table 45 Laundry Aids Company Shares 2006-2010 Table 46 Laundry Aids Brand Shares 2007-2010 Table 47 Laundry Detergents Company Shares 2006-2010 Table 48 Laundry Detergents Brand Shares 2007-2010 Table 49 Forecast Sales of Laundry Care by Category: Value 2010-2015 Table 50 Forecast Sales of Laundry Care by Category: % Value Growth 2010-2015 Polishes in the United Arab Emirates - Category Analysis HEADLINES TRENDS The economic recession and lower consumer spending following the financial crisis have led to lower
expenditure on polishes. Consumers have re-categorised their shopping needs following the crisis, with many products like polishes regarded as unnecessary by certain consumers. COMPETITIVE LANDSCAPE SC Johnson & Son Inc led polishes in 2010 with a 21% retail value share as its furniture polish enjoys strong brand loyalty. In addition to the mainstay aerosol can, its Pledge brand has benefited from its availability in other formats such as Pledge Multi Surface Cleaner and Wipes. Zetra BV ranked second in 2010 with a retail value share of 19% thanks to the popularity of its Kiwi brand, the best-selling in shoe polish. PROSPECTS Demand for polishes is expected to continue to rise over the forecast period. As the economy recovers, consumer confidence will improve and consumers will be encouraged to start spending again on polishes, a category they regarded as unnecessary towards the end of the review period. The perception of polishes as unnecessary and premium products is not anticipated to change over the forecast period. In addition to the current lack of advertising and product innovation, demand will be hit by the currently low consumer confidence that is expected to be maintained into early 2011. CATEGORY DATA Table 51 Sales of Polishes by Category: Value 2005-2010 Table 52 Sales of Polishes by Category: % Value Growth 2005-2010 Table 53 Polishes Company Shares 2006-2010 Table 54 Polishes Brand Shares 2007-2010 Table 55 Forecast Sales of Polishes by Category: Value 2010-2015 Table 56 Forecast Sales of Polishes by Category: % Value Growth 2010-2015 Surface Care in the United Arab Emirates - Category Analysis HEADLINES TRENDS Although the H1N1 virus outbreak reached its peak in 2009, household hygiene concerns continued to increase in 2010. This accordingly drove up sales of surface care products and created a natural marketing opportunity, although the category’s major players have not capitalised on such epidemics. Since 2009, consumers have become more diligent about cleaning their homes. They have started focusing on products offering the maximum protection from germs and viruses. The category’s positive growth was also aided by the entrance of green and private label products into the mainstream. The launch of Clorox Green Works in 2009 has been instrumental in the emergence of green products, and other players followed suit in 2010. On the other hand, the fallout from the economic slowdown helped private label to advance as consumers increasingly appreciated their balanced price/quality ratio. COMPETITIVE LANDSCAPE Reckitt Benckiser extended its lead in surface care in 2010 with a retail value share of 34%, chiefly owing to its Dettol brand which enjoys strong consumer loyalty. Dettol is well positioned as the undisputed leader in household antiseptics/disinfectants to the extent that some consumers use the term Dettol to refer to households antiseptics/disinfectants. A perception has built up over the years that brands like Dettol and Clorox are the most efficient at killing germs and viruses, and the outbreak of the H1N1 virus in 2009 has solidified Dettol’s position. The latter has been aided by consumers seeking maximum protection against germs and viruses rather than by consumer information campaigns. Henkel Dac remained in second place in 2010 with a stagnant retail value share of 13%, followed by Abu Dawood Industrial Co in third with a 10% share. PROSPECTS The rise of green and private label surface care products will progress over the forecast period. On the
one hand, the success of Clorox Green Works has set the pace for the entrance of green products into the mainstream. As long as environmental awareness is growing, demand will remain buoyant for these products. On the other hand, consumers have already gained confidence in private label products, and the private label movement is set to expand over the forecast period to cater for low and mid-income earners. CATEGORY DATA Table 57 Sales of Surface Care by Category: Value 2005-2010 Table 58 Sales of Surface Care by Category: % Value Growth 2005-2010 Table 59 Surface Care Company Shares 2006-2010 Table 60 Surface Care Brand Shares 2007-2010 Table 61 Forecast Sales of Surface Care by Category: Value 2010-2015 Table 62 Forecast Sales of Surface Care by Category: % Value Growth 2010-2015 Toilet Care in the United Arab Emirates - Category Analysis HEADLINES TRENDS In light of rising health awareness and earlier pandemics, consumers – mostly middle and upperincome households – have moved away from using bleach, which is the most economical cleaning product, towards using specific toilet care products. In fact, toilet care products would have achieved stronger penetration if the economy had already recovered. Although many middle-income earners still categorise toilet care products as non-essentials, the penetration of these products gradually improved in 2010 as opposed to earlier in the review period. COMPETITIVE LANDSCAPE Reckitt Benckiser led toilet care products in 2010 with a 19% retail value share despite strong competition from archrivals SC Johnson & Son Inc and Brill Manitoba SpA, which trailed with retail value shares of 17% and 15%, respectively. Reckitt Benckiser’s leading position in toilet care products can be attributed to the strength of its Harpic brand, particularly in the dynamic rim liquids category. Harpic, along with SC Johnson & Son Inc’s Toilet Duck and Brill Manitoba SpA’s WC Net, are the bestselling brands in toilet care products. They have somehow managed to gain share despite the growing competition from private label. PROSPECTS It is expected that a number of factors will drive demand for toilet care products and collectively position these products as home care essentials rather than niche products. These factors include rising hygiene awareness, lower reliance on domestic help, better economic conditions over the forecast period and increasingly busy lifestyles. These factors will collectively spur a shift away from using bleach and other economy products towards specific toilet care products. CATEGORY DATA Table 63 Sales of Toilet Care by Category: Value 2005-2010 Table 64 Sales of Toilet Care by Category: % Value Growth 2005-2010 Table 65 Toilet Care Company Shares 2006-2010 Table 66 Toilet Care Brand Shares 2007-2010 Table 67 Forecast Sales of Toilet Care by Category: Value 2010-2015 Table 68 Forecast Sales of Toilet Care by Category: % Value Growth 2010-2015
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