Washing Detergents Industry Analysis

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WASHING DETERGENTS

Summary of Module 1
INDUSTRY OVERVIEW
Washing powders and detergents are considered to be an important part of personal and home care product lines. The local detergent industry in Pakistan has flourished significantly over time and is still on the path diversification and development. During the periods of 1980s till the end of 90s, detergent bars had the major market share, in most of the market segments. The detergent powders through their extensive marketing campaigns and efficient use of marketing mix have not only penetrated this consumer segment but have also shown significant growth value and have gained volume wise. This product now caters to a very large segment from rural to urban centers. The home care products industry in Pakistan is divided into two parts i.e. soaps and washing detergents. The total sales of the detergent market are 240,000 tons and still a demand supply gap of 55,000 tons of detergent exists. The local manufacturing industry is producing 175,000 tons of detergent which is 77 % of total product whereas rest of the production is met by imported detergents. Currently there are number of brands that are competing with each other in this market. Talking about washing powders, there are almost eight to ten brands that are competing with each other in the market apart from soaps. Each brand has its unique selling proposition which differentiates it from other brands. These brands are targeting different market segments on the basis of their marketing research and marketing segments. The brands which are competing with each other in this industry are: Surf Excel, Bonus, Bright, Express Power, Sunlight, Rin, Ariel, (Tide imported) The marketers feel there is potential opportunity for growth in this industry as the consumption of people for home and personal care products and specifically in detergent industry is increasing rapidly. On the other hand in 2009-2010 budget, tax regulatory bodies removed 25 percent import duty on detergent powder which put local manufacturing industry at a disadvantage but in 2010-2011 budget the government reduced the duty on the raw materials of detergents from 15 to 10 percent in order to the decrease the cost of detergent and an create an opportunity for the manufacturers to increase their profits.

Market Size
The detergent market of Pakistan is divided into two broad segments, namely laundry soap and laundry detergents (2009 survey). Laundry soaps amount to 420,000 tons, in terms of volume while laundry powder is 240,000 tones. In terms of value, laundry soap is a market worth Rs 10 billion and laundry powder is Rs 17 billion. Trends

The growth of washing powder market is approximately between 8 to 10 percent annually. In the budget 2011, although the government imposed regulatory duty on a number of personal care items but did not impose it on fabric wash, otherwise known as laundry detergent powder (LDP) or in simple terms, washing powders. In this way, the government is encouraging this sector to flourish but at the same time the import of laundry detergent powder is increasing day by day from Rs 1.359 billion in 2006-07 to Rs 12.819 billion in 2007-08, which is discouraging the local investment. With new detergent powders entering the local market from abroad, it is clearly evident that the laundry detergent has become a highly competitive sector. As far as the leading detergent powder brand is concerned, according to 2008 estimates, Surf Excel in Pakistan was Unilever’s fastest growing laundry brand in the 90 countries that it is marketed globally by the company. This single brand acquires 33 percent of the market share for laundry detergent powders. It has even substantially gained the market share of P&G’s Ariel as well. Unilever’s strong competitor Colgate-Palmolive (Pakistan) Ltd leads the detergent powder category with a company share of 42%, which is spread among its three popular brands Bright, Bonus and Express. Future...
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