Overall growth for tissue and hygiene in 2011 was one of the highest during the review period. Although penetration is high for categories like toilet paper and nappies/diapers, companies are focusing efforts on developing smaller categories. Distribution network improvements are very important for companies trying to expand their consumer base in 2011.
Rates of growth in 2011 fuelled by price increases Price increases in 2011 affected most categories within tissue and hygiene in Bolivia. Some categories experience greater rates of growth as a result of inflation while others are negatively impacted by this increase. In such cases a drop in the rate of growth was experience in 2011. Despite price increases, categories that remain essential for Bolivian consumers show very healthy rates of growth.
International brands leading largest categories The greater investment, distribution and advertising capabilities of international companies maintain them as leaders of large categories in 2011. Domestic brands have been forced to focus on smaller categories where they have more chance of expanding their brands. In addition, domestic brands focus on supplying products to reach low income consumers that are most often left aside by international brands.
Other non-grocery retailers remains the largest channel of distribution Bolivians keep purchasing tissue and hygiene mostly from other non-grocery retailers. Modern retailers are located only in the three most important cities in Bolivia. Hence most consumers have to supply their households with products purchased at other non-grocery retailers. This limits growth for certain brands and the development of larger size products.
Two clearly differentiated trends will drive growth over the forecast period -Despite being apparently contradictory, premiumisation and economisation are trends that would drive growth of tissue and hygiene products over the forecast period. Companies are focusing their efforts on expanding their consumer base from two different approaches: On one hand reaching lower income consumers through economy products, and on the other hand, reaching a fast growing segment of upper-middle and high-income consumers who look for higher quality products and have the means to afford them. Additionally, since modern grocery continues to gain ground, consumers are more aware of the convenience of buying larger packs which is also a trend that will drive innovation over the forecast period.
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