Improving global living standards, expanding market for chemical products

World-wide sales of chemical products have expanded at a faster rate than previously, since the last Nielsen survey. The Nielsen survey covered 29 categories and its findings were published in a publication under the title „What’s Hot around the Globe”, this March. In Hungary, sales of the 60 chemical categories monitored by Nielsen expanded by 9 per cent on average, in terms of value, in the March 2007 – February 2008 period. Sales show growth in all of the top 20 categories. Air fragrances, hair dyes and paper towels produced the most dynamic growth (around 18 per cent), while hand and body lotions produced 13 per cent growth. Deodorants, paper tissues and shower gels also produced faster than average expansion. The process of market concentration has continued in Hungary. Hyper markets have succeeded in increasing their already high market share and the same is true for drugstores. These two channels account for almost two-thirds of the market in the categories monitored by Nielsen. Discount stores only increased their market s hare by 0.2 per cent, but this is expected to change with Aldi. Hungarian trends differ from global ones in several respects. For example, air fragrances and pesticides are second globally regarding growth (11 per cent), while air fragrances are on top in Hungary. Owing to last year’s dry weather, the sales of pesticides were up by only 4 per cent in Hungary. The growth in the sales of fabric softeners in Hungary (6 per cent) is the same as the global average. While private labels hold a markets share of 12 per cent globally, this is only 6 per cent in Hungary. Another feature of the Hungarian fabric softener market is that it is highly concentrated, with 3 brands accounting for 84 per cent of sales. Consumers are increasingly looking for cheaper toothpaste brands and larger size units. Toothpaste sales increased by 5 per cent in terms of value. Among toothbrushes, the electric segment generated most of the 4 per cent expansion. The substantial growth in the hand and body lotion segment was the result of innovation. The market share of lotions increased, while that of creams dropped. Sales of household chemical products totalled over USD 90 billion in the 61 countries surveyed by Nielsen. Less developed countries and region produced the fastest (double digit) growth, while sales in Europe grew by 5 per cent. The main driving force behind expansion is an improving standard of living. This is well illustrated by rapidly increasing demand for air fragrances. Environmental considerations are also playing an increasing role in consumer decisions. The popularity of compact washing powders is a good example. Health and safety, which contribute to wellness also have a positive influence on the market. Safety of the family is the primary consideration for parents all over the world and household chemical products help to achieve safety by improving hygiene. As there are more developed countries in Europe, than in any other region of the world, the 5 per cent growth seen here is below the global average. However, when we look at the percentage of household chemical products in total FMCG sales, Europe leads the world with 40 per cent. The market share achieved by private labels in Europe (24 per cent) is above the global average (13 per cent in Hungary). The most dynamic categories in Europe were: pesticides (18 per cent), air fragrances (13), aluminium foil (10), stain remover (9). Washing powder is the largest category with annual sales of USD 25 billion, which is more than the combined turnover of the next three categories. Regarding growth, the top 4 categories of 2007 were: air fragrance, pesticide, aluminium foil and scale remover.