Laundry care in vietnam

LAUNDRY CARE IN VIETNAM HEADLINES  Laundry care witnesses retail value growth of 14% in 2012  Manufacturers focus on new product development and intensive promotional activities to bo

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LAUNDRY CARE IN VIETNAM

Euromonitor International

July 2013

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LIST OF CONTENTS AND TABLES

Headlines 1

Trends 1

Competitive Landscape 2

Prospects 3

Category Indicators 4

Table 1 Household Possession of Washing Machines 2007-2012 4

Category Data 4

Table 2 Sales of Laundry Care by Category: Value 2007-2012 4

Table 3 Sales of Laundry Care by Category: % Value Growth 2007-2012 5

Table 4 Sales of Laundry Aids by Category: Value 2007-2012 5

Table 5 Sales of Laundry Aids by Category: % Value Growth 2007-2012 5

Table 6 Sales of Laundry Detergents by Category: Value 2007-2012 6

Table 7 Sales of Laundry Detergents by Category: % Value Growth 2007-2012 6

Table 8 Sales of Standard versus Concentrated Fabric Softeners: % Analysis 2007-2012 7

Table 9 Laundry Care Company Shares 2008-2012 7

Table 10 Laundry Care Brand Shares 2009-2012 8

Table 11 Laundry Aids Company Shares 2008-2012 8

Table 12 Laundry Aids Brand Shares 2009-2012 9

Table 13 Laundry Detergents Company Shares 2008-2012 10

Table 14 Laundry Detergents Brand Shares 2009-2012 10

Table 15 Forecast Sales of Laundry Care by Category: Value 2012-2017 11

Table 16 Forecast Sales of Laundry Care by Category: % Value Growth 2012-2017 11

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LAUNDRY CARE IN VIETNAM

HEADLINES

 Laundry care witnesses retail value growth of 14% in 2012

 Manufacturers focus on new product development and intensive promotional activities to

boost consumption

 Unit prices increase in most categories in 2012 due to rising input costs

 Unilever Vietnam International Co Ltd continues to lead laundry care with a 57% retail value

share in 2012

 Laundry care is expected to witness a CAGR of 4% in constant value terms over the forecast

period

TRENDS

 Laundry care enjoyed an exciting year in 2012, with new product developments and many

promotional activities from both local and foreign manufacturers The most prominent

example was the marketing campaign to support the April 2012 launch of a new brand in

fabric fresheners, Ambi Pur from Procter & Gamble This marketing campaign was quite

successful, featuring the family of the super model, Thuy Hanh The campaign was called

“Thach thuc Sofa khong lo” (“Challenge the big sofa”); in which Thuy Hanh used Ambi Pur to

remove odour of a big sofa that was hard to wash This product received a good response

from customers and helped boost demand for fabric fresheners

 In 2012, although there were new product developments and marketing activities, the retail

value growth of the whole laundry care category was still much lower than in 2011 This was

mainly due to lower consumer spending as a result of the gloomy economic climate

 The unit price of laundry care continued to increase in 2012, mainly due to rising input costs

Besides research and development costs for new product development, the increase in the

cost of raw materials, transportation and labour also contributed to the rise in unit prices

 In 2012, fabric fresheners registered the highest current value growth, while concentrated

liquid detergents was in second place in terms of growth Although fabric fresheners is not

really new in Vietnam, it was only after the appearance of Ambi Pur that Vietnamese

consumers began to notice the existence of this category and learn about its benefits Hence,

it was not unexpected when fabric fresheners witnessed the highest growth rates in volume

and retail value terms in 2012 Concentrated liquid detergents also grew quickly thanks to its

quality and convenience and manufacturers’ promotional activities

 Liquid fabric softeners also recorded high volume growth of 9% in 2012, slightly lower than in

2011 In general, fabric softeners sold well as consumers appreciated its benefits of making

clothes easier to iron and smell pleasant In 2012, concentrated liquid fabric softeners

became more popular than standard ones Liquid fabric softeners also saw the appearance of

both new local and imported brands, which helped to maintain healthy growth for this

category For example, at the end of 2011, Unilever introduced its new product, Comfort Tinh

Dau Thom While in 2010 perfume-like fragrances Downy Passion and Downy Attraction from

Procter & Gamble were introduced, in 2012 consumers were treated to the combination of

essential-oil-like fragrances and a “1 Rinse” formula Another example was Purex Crystals

from Henkel, a new type of fabric softener in crystal form With this product, Vietnamese

higher-income consumers can enjoy an entirely new way to freshen and soften their laundry

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 Standard powder detergents remained the most popular laundry care product in Vietnam in

2012 Many of these products were advertised as suitable for both hand and machine

washing However, with the increasing demand for more sophisticated and specialised

products, in 2012, more brands were aimed at machine washing

 Hand wash detergents remained negligible, because most players positioned their products

as suitable for both hand and machine washing in order to win greater sales by addressing

both categories One popular example of powder detergents which is also commonly being

used for hand washing is Vi Dan of Vico Ltd Co

 In 2012, with the exception of fabric freshener, other sub-categories of laundry aids did not

see any major development Among laundry aids, colour safe laundry bleach, starch/ironing

aids, and spot and stain removers continued to be the most popular categories, while curtain

care and water softener remained negligible in the country

 Washing machine penetration in the country especially in urban areas continued to improve in

2012 as a result of the increasing number of households, as well as promotional programmes

to boost sales of electronics and appliances retailers, such as Nguyen Kim Trading JSC

 In 2012, consumers still washed their clothes at normal temperatures, as they have little

knowledge about the effects of temperature on their clothes

 Fake or unbranded detergents remained a considerable problem in Vietnam in 2012 Most

famous brands were the subject of counterfeiting, especially Omo, from Unilever and Tide

from Procter & Gamble

 Present in Vietnam for nearly a year, launderettes remained negligible due to low demand

Indeed, this concept was still very new in Vietnam at the end of the review period, and even

large cities, such as Ho Chi Minh City had only a few laundrettes, and not many people were

aware of their presence However, laundry services, which offer a full service laundry, from

washing to ironing, were quite popular due to their affordable prices Dry cleaning continued

to remain insignificant in Vietnam over the review period

COMPETITIVE LANDSCAPE

 Unilever Vietnam International Co Ltd continued to lead laundry care with a 57% retail value

share in 2012 Its leading brands were Omo, Comfort, Surf and Viso Being one of the oldest

international companies established in the country, Unilever has a very strong understanding

of Vietnamese consumer needs and behaviours For example, it recognised that the main

target customers for Comfort “1 Rinse” were students, workers or consumers who lived in

rented rooms/houses These groups appreciate this product because it allows them to save

water, which is important to them because they normally have to pay for water at a much

higher price than that charged by state-owned water utilities Furthermore, these consumers

also prefer very small bag sizes, of 24ml, due to its affordable price and the fact that smaller

packages are more convenient when living in rented rooms/houses

 Procter & Gamble Vietnam Ltd ranked second in laundry care in Vietnam, with a 22% retail

value share in 2012 The company continued to focus on promoting its fragranced fabric

softeners, Downy Passion and Downy Attraction At the same time, it successfully launched

its new product, Ambi Pur fabric freshener These products gained considerable consumer

attention due to their attractive fragrances, as well as intensive marketing and advertising

activities

 In 2012, Casino Guichard-Perrachon SA with its private label experienced the largest

increase in value sales, at 86%, mainly thanks to the development of its private label, Big C

This range was only introduced in 2011 and its emergence from a low base was one of the

key reasons for its rapid growth Furthermore, the company owns a widespread and popular

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supermarket network in the country, which helped Big C to become widely available to

consumers The company also implemented many promotional activities, especially

discounts, in order to boost sales

 My Hao Cosmetics JSC enjoyed one of the highest growth in retail value sales in 2012 One

of the main reasons was the emergence from a low base Furthermore, the company

launched intensive promotional programmes during the year in order to boost sales In fact, in

2012, the company published many public relations articles in both online and offline

newspapers to attract consumers The company also invested in improving product quality,

especially for its concentrated liquid detergents Furthermore, in large cities, such as Ho Chi

Minh City, the increasing trend of consumers preferring local brands also supported its

growth With its long history, good reputation, nationwide distribution network and efforts by

the government to encourage the Vietnamese to use local products, the company enjoyed a

healthy growth in 2012

 Besides Casino Guichard-Perrachon SA, other private labels also enjoyed a very healthy

value growth in 2012 such as Co.opMart from Saigon Union of Trading Cooperatives Private

label products typically were positioned as budget, economy products at prices that were

typically 20 to 30 percentage points lower than others This became a very strong competitive

advantage, especially in the on-going gloomy economic climate Furthermore, private label

products were usually displayed at more eye-catching spots Consequently, private label

value and volume growth was strong in 2012

 International manufacturers continued to characterise laundry care in 2012, with the first and

second positions belonging to Unilever and Procter & Gamble, respectively Their products

typically enjoyed better shares than local ones, thanks to their active marketing campaigns,

large investment in research and development and their well-established brand names

However, domestic players also witnessed strong development in 2012, due to the increasing

awareness of Vietnamese brands Moreover, domestic players focused on upgrading their

packaging to attract more consumers

 Over the review period, with a strong financial budget for marketing, Unilever Vietnam

International Co Ltd continued to invest in its advertising and promotional activities for laundry

care, especially for its fabric softener, Comfort “Andy and Lily” was one of the most

successful marketing campaigns for the Comfort brand during the 2005-2010 period This was

a series about a “fabric” couple, from their first day through to when they had babies

Throughout the story, the company indirectly advertised its fabric softener, Comfort The

campaign encountered a setback in 2011, when Andy and Lily had three babies, which is not

encouraged in Vietnam Thus, in 2012, the new television advertisement to promote Comfort

Tinh Dau Thom focused mainly on the couple, Andy and Lily, and only featured two children

for a few seconds at the end of the clip

 Some “green” products were present in Vietnam over the review period One example was

Daso Lemon, a laundry detergent from Daso, which claims to be “environmentally friendly” on

its packaging Nevertheless, retail value sales of products, such as this, remained negligible

due to a lack of consumer awareness

PROSPECTS

 Over the forecast period, laundry care in Vietnam is expected to enjoy higher demand thanks

to the growing awareness of hygiene and rising consumer incomes Consequently, laundry

care is likely to have a CAGR of 4% in constant value terms, which is much higher than the

CAGR witnessed over the review period Manufacturers will need to pay more attention to

premium products, with more value-added functions, while simultaneously provide

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value-for-money products to attract low-income consumers Health concerns will be the key driver of

product innovations

 In addition to counterfeit products, imported laundry care brands may pose a threat to the

performance of local manufacturers Products from Japan, Korea or Thailand, are examples

Some even carry the same brand name but are sold at higher prices than products which are

made in Vietnam In fact, consumers believe that imported products have higher production

standards and are therefore of higher quality As a result, consumers, especially middle- and

high-income groups, are likely to choose imported brands, which could potentially have a

negative impact on domestic production

 Fabric fresheners and concentrated liquid detergents are expected to record the fastest

growth of 30% and 21%, respectively, in constant value terms over the forecast period

Although these categories are not really new, their penetration levels remained low at the end

of the review period One of the key reasons for this low base was that manufacturers only

began to promote these types of products towards the end of the review period Vietnamese

consumers only began to notice the existence of fabric fresheners and learn about the

benefits of these products after the appearance of Ambi Pur Thus, large players, such as

Unilever and Procter & Gamble, are likely to focus their investments on these categories in

order to boost demand and drive sales

 Overall, unit prices in most categories of laundry care are expected to decrease slightly in

constant terms as manufacturers try to maintain low prices in order to compete and to boost

sales Fabric fresheners in particular might see a stronger decline in price as more players

enter the category

 New product launches, such as Ambi Pur fabric freshener or Comfort Tinh Dau Thom, are

expected to perform well in the early part of the forecast period thanks to the intensive

marketing activities to support them and their wide distribution networks

 It is expected that multinational players will exploit their strong financial capability to invest

heavily in marketing campaigns to boost sales, whereas local players will focus more on

improving their quality, along with strengthening their distribution network Furthermore, with

the efforts of the government, the media and local manufacturers, the “Vietnamese use

Vietnamese goods” campaign will continue to have a positive impact on sales of local brands

CATEGORY INDICATORS

Table 1 Household Possession of Washing Machines 2007-2012

% possession of washing machine

Source: Euromonitor International from official statistics, trade associations, trade interviews

CATEGORY DATA

Table 2 Sales of Laundry Care by Category: Value 2007-2012

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VND billion

Laundry Detergents 3,353.8 3,580.7 3,845.2 4,514.7 5,426.8 6,048.7

Source: Euromonitor International from official statistics, trade associations, trade press, company research,

store checks, trade interviews, trade sources

Table 3 Sales of Laundry Care by Category: % Value Growth 2007-2012

% current value growth

2011/12 2007-12 CAGR 2007/12 Total

Table 4 Sales of Laundry Aids by Category: Value 2007-2012

VND billion

Bleach

Stain Removers

Table 5 Sales of Laundry Aids by Category: % Value Growth 2007-2012

2011/12 2007-12 CAGR 2007/12 Total

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Spot and Stain Removers 14.7 12.5 80.5

Table 6 Sales of Laundry Detergents by Category: Value 2007-2012

VND billion

Automatic Detergents 3,352.5 3,579.4 3,843.8 4,513.2 5,425.1 6,046.9

- Powder Detergents 3,349.9 3,576.3 3,840.3 4,508.1 5,418.0 6,037.3 Standard Powder 3,349.9 3,576.3 3,840.3 4,508.1 5,418.0 6,037.3 Detergents

Detergents

Tablet Detergents

Detergents

- Standard Detergents 3,350.4 3,577.0 3,841.2 4,509.1 5,419.3 6,038.8 Standard Powder 3,349.9 3,576.3 3,840.3 4,508.1 5,418.0 6,037.3 Detergents

Detergents

Tablet Detergents

Detergents

Laundry Detergents 3,353.8 3,580.7 3,845.2 4,514.7 5,426.8 6,048.7

Table 7 Sales of Laundry Detergents by Category: % Value Growth 2007-2012

2011/12 2007-12 CAGR 2007/12 Total

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Automatic Detergents 11.5 12.5 80.4

Table 8 Sales of Standard versus Concentrated Fabric Softeners: % Analysis

2007-2012

% retail value rsp

International Co Ltd

Vietnam Ltd

Vietnam Co Ltd

Cooperatives

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Casino Guichard- - - - 0.2 0.4 Perrachon SA

Table 10 Laundry Care Brand Shares 2009-2012

% retail value rsp

Vietnam Ltd

Vietnam Co Ltd

Cooperatives

Perrachon SA

Table 11 Laundry Aids Company Shares 2008-2012

% retail value rsp

Sdn Bhd

Technology JSC

Tiêu đề	Laundry care in Vietnam
Tác giả	Euromonitor International
Thể loại	Market research report
Năm xuất bản	2013

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