CONSUMER GOODS & RETAIL Archives

May 5, 2016by EOS Intelligence EOS Intelligence No Comments

Online Grocery Retailing In India: Will Clicks Replace Bricks?

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India is the sixth largest grocery market worldwide buzzing with plethora of opportunities for the development of online grocery retailing. Gone are the days when Indian consumers were reluctant to shop online – studies have revealed that Indian consumers are overcoming biases against purchasing products without the touch and feel factor and are widely accepting online shopping. However, shopping for grocery online is at a very nascent stage and is still overcoming operational and economical hurdles. Over the years, multiple online grocery sites have shutdown, though there are a few survivors and presently the market is bustling with new entrants including e-commerce giants such as Amazon, Snapdeal, Flipkart, etc. Players are constantly implementing innovative marketing strategies, expanding operations, and experimenting with business models to find the best fit for e-grocery market.

Online grocery retailing is a tough segment to crack largely due to the perishable nature of products it offers, coupled with several operational impediments such as logistics, supply chain management, and low margins. Also, players face major challenges in training and retaining employees as well as attracting investment to grow operations.

Despite the challenges, online grocery retail is witnessing rapid growth driven by increasing internet connectivity, use of smartphones, and changing lifestyles with increasing number of working women demanding convenience. Consumers pressed for time are continuously looking for less cumbersome options in their fast-paced lives and online grocery shopping is increasingly the best solution for them.

Out of the 40 online sites that initially ventured into the grocery retailing market, only a few have survived and BigBasket has emerged as the most successful e-retailer. Other survivors include ZopNow and Localbanya, while there are several new entrants such as Grofers, Jugnoo, etc. Traditional brick and mortar retailers have also realized potential of the market and have slowly started selling groceries digitally – for example, Reliance launched ‘fresh direct’ while Tata sells through ‘My247market’.

Successful e-grocers such as BigBasket, ZopNow, Nature’s Basket, and Reliance Fresh Direct, among others started formulating strategies to succeed in the e-grocery market. For instance, BigBasket started selling private label brands to improve margins while ZopNow offers cashbacks, discount coupons, and grocery deals to attract customers. Other strategies include implementing quality assurance programs and offering niche products, among others.

EOS Perspective

E-grocers face various obstacles, hence a robust strategy is the need of the hour to survive and succeed in the market. It is imperative for any player to first understand the local nuances of the market – this includes establishing local relationships, developing local logistics, and building business according to unique scenarios in different cities. India is an extremely diverse country and a complex market to survive, hence effectiveness and efficiency of players to adapt to the market defines how any company will succeed in the industry. Factors such as target segment, operating costs, competitive landscape, and consumer preferences vary greatly across India, therefore, aligning business with domestic market and following ‘localization’ of operations is the key to success.

For long-term sustainability in the market, it is essential for players to differentiate through innovation and to improve business scalability. Innovation can be achieved in the form of targeting specific customer segment, selling niche products, or offering tailored services. Attracting investment can help players to expand and scale up their businesses.

Further, it is crucial for e-retailers to prioritize customer experience — across technology, delivery, and service platforms — as convenience is the primary factor that influences people to buy digitally.

Nevertheless, the question still remains if clicks can replace bricks. Online grocery market has potential and is expected to grow but it is unlikely that it will dominate or replace the brick and mortar stores in the near future. Online retailing definitely have the potential to grab a substantial portion of grocery sales in a long-term horizon, however, physical stores will long continue to have an edge, particularly in case of FMCG goods.

April 13, 2016by EOS Intelligence EOS Intelligence No Comments

CPG Companies – Facing the Load

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For companies operating in the consumer packaged goods (CPG) industry, 2014 marked the start of a difficult time, especially with growing supply chain challenges that have been augmented by greater uncertainty around the state of OTR transportation. Due to this, the industry has witnessed several hard-earned supply chain gains being washed away by external factors. Moreover, rising expectations and demand from consumers are translating into SKU proliferation as well as growing number of retail channels. This has further lead to operational complexity. While these issues are real and should be dealt with now, only very few companies have managed to overcome these supply chain pressures and emerge with solutions that balance supply chain costs as well as service levels. Some of the measures adopted by companies managing to successfully handle these supply chain issues include consolidating shipments and shifting towards drop trailers. Moreover, companies are also making more strategic shifts, such as adopting intermodal transportation at a greater rate and cutting down on distribution centers (to ship directly from plants) to improve supply chain efficiencies.

CPG companies are witnessing intense pressure throughout their supply chain, from raw-material supply to shipping finished products to distribution centers, wholesalers, as well as retailers. While some of these pressures accrue from the customer end, others arise from intensified inorganic growth in the industry, as well as the ongoing transportation shortage (especially in case of ‘over the road’ (OTR) transportation). This has further resulted in higher freight costs for shipments and is also forcing companies to maintain higher inventory levels (especially to outweigh the transportation crunch).

EOS Perspective

As the CPG supply chains have been shedding many of their gains owing to ongoing complexities, companies must come up with long-term strategic solutions to handle supply chain pressures. While short-term solutions may help companies overcome cost pressures temporarily, they may not provide companies with a holistic solution that helps balance supply chain costs and service levels. Therefore, companies may need to commit to long-term strategic solutions such as collaborative supply-chain approach and network redesign to unlock supply chain efficiencies.

March 9, 2016by EOS Intelligence EOS Intelligence No Comments

Succeeding in Myanmar’s Fragmented Grocery Retail Industry

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In recent years, several reports have talked about how the rapid economic growth, expanding middle class, and consumer spending have fueled growth in Myanmar’s retail industry. Although the growth potential is very lucrative, retailers should also look closely at the industry challenges that currently exist. These challenges must be carefully assessed and addressed in order to capture the growth opportunities and succeed in Myanmar.

Myanmar’s rapidly improving growth indicators and demographics have attracted the attention of several investors as well as business consulting firms globally. The country’s growing urbanization, middle class population, and rising disposable income point towards tremendous retail opportunities for players looking for new growth markets.

In the past three years, companies such as Coca-Cola, Carlsberg, PepsiCo, KFC, etc., have already entered and started their business operations in Myanmar, while several others are looking at ways to enter the nation’s lucrative retail market, and to be the part of its growth story. Many industry experts remain upbeat on the nation’s future economic growth prospects, and have projected the retail industry to grow at a strong pace in the future.

EOS Perspective

Rapid economic growth, urbanization, and growing purchasing power, along with consumerization of IT are bringing bigger exposure to international brands for Myanmar’s rising middle class. This is expected to boost the demand for fast moving consumer goods. In addition, the evolving buying preferences of young and aspiring middle-class population, who are looking to spend their rising incomes on bigger and better brands are set to trigger improvements in the range and quality of retail products and services.

Recent FDI reforms and the influx of foreign capital are likely to dramatically change Myanmar’s retail industry landscape in the coming years. International retailers are expected to spur industry growth by creating more jobs, improving supply chain networks and infrastructure, bringing cutting-edge technologies, processes, and management best practices. Furthermore, the increased competition between local and foreign retailers is likely to promote market efficiency, which might also result in better portfolio of grocery products and services on offer.

For foreign players, Myanmar’s retail industry still remains relatively unknown. As the market remains highly fragmented with lack of structured data on consumer preferences and market segmentation, companies need to spend time to study the market.

The best strategy for foreign retailers should be to form a joint-venture with the right local partner, who has comprehensive understanding of the market and its consumers’ buying behavior. Joint ventures remain the preferred strategy for many multinational retailers to enter Myanmar’s retail industry. With the help of trade fairs and road-shows, companies can identify and engage with potential partners. This will help them conduct due diligence, at the same time gain better understanding of the industry as well as first hand market insights. Many companies from Japan and Singapore have successfully reaped the benefits of this approach.

Proven as very challenging, retailing in rural Myanmar remains untapped. There are plenty of growth opportunities for grocery retailers as consumer and market dynamics are expected to continuously improve in the long run. By offering value added services such as bill payments, mobile recharge and top-up cards, and postal services, retailers can truly create a competitive advantage. Retailers can start investing in partnerships with wholesalers and independent retailers to grow their current network. Once the opportunities become ripe, retailers can scale up their operations by acquiring these partners, and thus expand their footprint in new geographies.

In order to succeed in Myanmar’s grocery retailing, foreign and local players will have to form strategic alliances and create a win-win relationship through exchanging technologies and global best practices with sales network and market intelligence. Furthermore, retailers must be agile, flexible, and adaptable enough to seize market opportunities in Myanmar’s fragmented retail sector. Succeeding in Myanmar’s grocery retailing requires unique solutions tailored to meet the evolving demands of various consumer segments.

January 14, 2016by EOS Intelligence EOS Intelligence No Comments

Have Big Box Retailers Successfully Metamorphosed the Indian Retail Culture?

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With its vast aspirational population, India is among the most favored retail destinations globally. However, the country’s retail market is still shackled by old-fashioned merchants and modern retailers are struggling to draw customers. One of the biggest challenges is the ‘retail structure’ of India – the market is mature but highly fragmented with 12-15 million outlets. About 92% of retail sales is derived from the fragmented unorganized sector.

There are some major impediments that are holding back retailers from realizing their full growth potential to yield desirable profits. Modern retailers in India suffer from regulatory hurdles, supply chain disruptions, soaring real estate prices, and scarcity of skilled workforce, among others. Consequently, several big box retailers such as Carrefour and Shoppers Stop have closed or downsized operations, respectively.

Despite the teething challenges, several international retailers have invested in the market while many others are contemplating to capitalize on the growth and demand potential of world’s fifth largest consumer market. Big box retailers have ushered revolution across the retail sector with their assortment of store formats based on consumer convenience, offering cash on delivery option, installment payment systems, and elevated customer experience by bringing all retail brands under one roof.

Working population and youth have proven to be attractive consumer segments for retailers. Also, rural India, representing a less penetrated market, is a key opportunity segment for retailers.

Several retailers such as Big Bazaar, Metro Shoes, Flipkart, Lenskart, etc., have overcome sustainability hurdles by implementing innovative ideas and deeply assessing the retail market.

EOS Perspective

Breaking through India’s retail market is a grueling experience but several big box retailers have succeeded by implementing innovative ideas and assessing consumer behavior carefully. Retailers need a robust strategy and in-depth knowledge of consumer buying behavior to pave way and survive in the market. It is essential to understand the fundamental features and structure of the market – for instance, India is a highly heterogeneous and segmented consumer market, hence, adopting a single marketing strategy across the country might not reap profits. Income levels, tastes, preferences, languages, lifestyles and fashion, buying behaviors, etc. differ across India. Therefore, it is crucial to develop region-wise marketing plan.

Further, retailers need to stay on toes persistently to keep themselves updated with new trends and competitive intelligence. For example, the new mantra of several big box retailers is to invest in developing omni-channel presence, which helps to expand their horizon from brick and mortar stores to multichannel selling through e-commerce. Growth of e-commerce in India has got retailers contemplating their multi-channel strategies with a few brick and mortar giants – including Croma, Shoppers Stop, brands such as Nike, Puma, Catwalk, Mango, among others – investing to build an online presence. Most brick and mortar retailers in India don’t have good multichannel offerings with pure play e-commerce companies (such as Amazon and Flipkart) dominating the market. Therefore, an investment to build online presence represents a plethora of opportunities for retailers considering e-commerce share in Indian retail sector is expected to skyrocket from 2% in 2014 to 11% in 2019.

Trends and developments within the Indian retail sector and Indian consumer behavior are complex to understand and predict, a challenge accompanied by several regulatory roadblocks. However, big box stores have changed the face of Indian retail by reinventing and positioning themselves as lifestyle and entertainment hubs rather than aggregators of retail brands. They have successfully instilled in local consumers’ minds the ‘mall culture’, where shopping malls and lavish stores become a weekend destination – not only for picking up groceries but also for recreation. Big box retailers have a long way to go, but the journey has begun.

October 14, 2015by EOS Intelligence EOS Intelligence No Comments

Brazil’s Personal Care and Cosmetics Market: Transitioning from Physical to Digital?

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Brazil’s personal care and cosmetics market is skyrocketing with growing sales driven by a fashion-conscious and beauty-obsessed population. Brazil, the cosmetics industry veteran, is the third largest consumer of beauty products worldwide and relies heavily on traditional channels for distribution. Online retailing has made inroads into the personal care market in Brazil and is on a slow but steady growth trajectory with immense potential in the future.

Brazilian consumers have long exhibited strong interest in personal care and beauty products, mostly purchased through traditional distribution channels. Over the past couple of years, these consumers have gradually also begun shopping for beauty products online, however, they are still skeptical about payment security as well as delayed delivery and quality of products.

Despite the obstacles, some online retailers — such as Natura, Men’s Market, and BelezaNaWeb — have stepped up to overcome hurdles and develop robust strategies to initiate online purchase of personal care products. After realizing potential of online retailing in the personal care and cosmetics segment, investors have started pouring in money in e-commerce websites to reap benefits.

Personal care segment can benefit from numerous growth opportunities in the e-commerce market with consumers’ rising inclination towards special offers attracting them to shop online, beauty product segment’s growing share in the emerging online shopping market, m-commerce boosting online sales, etc. E-retailers should exploit these opportunities to penetrate the market and improve sales.

EOS Perspective

While the e-commerce industry faces various obstacles, a robust online strategy along with a balanced eco-system — comprising fraud protection arrangement, better payment mechanism, developed infrastructure, as well as clear understanding of consumer behavior — is likely to improve e-commerce adoption and increase sales.

The market is slowly overcoming some of the hurdles — to combat logistics issue, government has started investing in air and shipping ports to facilitate parcel deliveries through these modes. This is likely to improve shipment timelines and consumers, as desired, can avail quick delivery of personal care products. Further, online retailers have started assessing consumer behavior and responded by improving shopping experience by re-designing websites, launching m-commerce applications for convenient mobile browsing, and implementing loyalty programs. The Brazilian government is working towards implementing stringent regulations to protect consumers against online frauds and formulating robust e-commerce policies.

Paving way into the Brazilian e-commerce market to sell personal care products has been challenging, however, with improvement initiatives slowly gaining momentum, the market is on an upswing to witness a stellar growth.

September 4, 2015by EOS Intelligence EOS Intelligence No Comments

Consumer Goods in Sub-Saharan Africa: Think Local, Act Local.

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Sub-Saharan Africa’s strong GDP growth, growing middle-class, and fast urbanization have attracted many investors and foreign retailers to the region in recent years. There is no doubt that the region’s demographics offer massive opportunities for consumer goods industry. But, a closer look at the ground reality and recent experiences from multinational companies operating in the region reveals the magnitude of challenges that need to be carefully assessed.

Sub-Saharan Africa’s (SSA) recent growth, expanding middle class, rapid urbanization, and growing household incomes have made it a promising market for the consumer goods industry. In recent years, several reports and industry experts have labeled the region as the ‘next big thing’ with massive potential. Although there is no denying that the growth outlook and market opportunities in the region are promising, there are considerable challenges that firms have to assess and overcome in order to succeed in these frontier markets.

“… we have realized the middle class here in the region is extremely small and it is not really growing.” – Cornel Krummenach, Chief Executive equatorial Africa region, Nestle (June 2015)

“If you look at how difficult it can be in Africa to move goods across a border, the fees and expenditure involved, the red tape, and the lack of suppliers for supermarkets, it’s discouraging.” – Boris Planer, Chief Economist, Planet Retail (March 2014)

Beyond the well-known infrastructure challenges, one of the more overwhelming challenges for consumer companies is to gain a complete understanding of the highly fragmented retail industry. As retailers and consumers remain widely scattered, effective route-to-market and distribution becomes a daunting task. In addition, the complex procedures, and bureaucratic obstacles result in supply disruptions and higher operating costs. For instance, Shoprite, a leading regional retailer, spends nearly US$ 20,000 weekly on import permits to transport goods for its stores in Zambia alone. In Nigeria, Shoprite keeps a warehouse full of flour, while PZ Cussons keeps up to three months of stock in Nigerian factories to ensure a constant supply.

“To operate successfully beyond our home border we had to learn to trade over vast distances,” he explains. “We had to invest heavily in supply chains, information technology capabilities and international sourcing skills, as trading in Africa is still logistically difficult.” – Whitey Basson, CEO, Shoprite Group

The famous song ‘Africa’s not for sissies’ holds so true for the region’s consumer goods industry. As SSA is a culturally diverse region with its heterogeneous consumer goods market, retailers need to think local and act local. They need to develop a comprehensive understanding of consumers, their spending behavior, and shopping habits. As traditional retailing will continue to hold significant market share for quite some time, succeeding in SSA’s consumer goods markets will be challenging. The key for retailers is to assess the various challenges against the market opportunities. Companies will have to be agile to respond to sudden industry changes, at the same time flexible in tailoring their strategies as per needs of the evolving market.

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1) African Development Bank in 2011 estimated middle-class population in SSA to be over 300 million and defined “middle-class” as individuals earning between US$4 and US$20 a day. Standard Chartered Bank in its 2014 report projected the middle class in 11 major SSA economies to be around 15 million and estimated this figure to surpass 40 million by 2030. Standard Chartered Bank defined “middle class” as those earning between US$8,500 and US$42,000 a year.

2) Coca-Cola designed an innovative distribution model for African markets where bottlers deliver directly to distribution centers, who in turn deliver to retailers. This resulted in win-win situation for all as everybody in the supply chain ecosystem earns profit. Shoprite Group’s growth is heavily linked to its central distribution model that helped the firm to improve customer services and ensure smooth supply across the region.

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In May 2013, in our article ‘Africa is Ready For You. Are You Ready For Africa?‘, we also discussed six aspects that companies must consider when planning their Africa strategy and offerings.

May 21, 2015by EOS Intelligence EOS Intelligence No Comments

The Rising Importance of Private Labels for GCC Retailers

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Despite the recent progress made by several Gulf Cooperation Council (GCC) retailers in developing their private labels, the industry is still lagging behind in comparison with western markets. Although regional retailers are well aware of the private labels’ potential, they have not fully leveraged their benefits. As the competition intensifies, regional retailers need to develop optimal private label strategies that can help them further enhance profitability and consumer loyalty.

With the evolving retail landscape, consumer attitude towards private label products has changed dramatically over the years in the GCC region. According to a 2014 Nielsen survey, nearly three-fourth (71%) of the respondents in Middle East and Africa agreed that their perception towards private label products have improved in recent times. Gone are the days when private label products were just seen as cheaper alternatives of national and multinational branded products.

Today, private labels include some innovative products that have no branded equivalent. Some of the premium private label products are superior to branded products in quality. Despite the growth of market share of private label products in recent years, the GCC retail industry is still lagging behind major matured retail markets in terms of private labels presence. Retailers now realize the need for making private labels an integral part of their growth strategies that can help them boost revenues and customer loyalty in the current retail environment characterized by intense competition and consolidation.

The retail industry landscape in GCC region is constantly evolving, with the modern trade replacing traditional independent retail trade. As of 2013, the total occupied modern retail sales area was 5.3 million square meters. This is projected to reach 6.6 million square meters in 2018.

Retail industry has witnessed tremendous growth over the last decade and is one of the fastest growing sectors of the region. The growing expatriate population, increased purchasing power of consumers, modern lifestyles, and increasing influx of tourism revenues are fueling growth in the region’s retail sector. According to a 2015 report from Alpen Capital, retail sales in the GCC region are expected to grow at a CAGR of 7.3% between 2013 and 2018 to reach US$ 284.5 billion. Sales in supermarkets and hypermarkets across the region are expected grow at a CAGR of 9.2% during the same period.

Given the retail industry’s strong growth outlook, a lot of potential opportunities exist for retailers to grow and differentiate themselves with private label strategies. However, till now retailers have largely failed to capitalize on this. Private label products have started to penetrate and enjoy success only across few product categories such as home care, packaged food, beverages, and hygiene products. Not only there is still an ample room for further growth in these categories, but the market remains untapped for other product categories such as personal care and hygiene products, and food categories including frozen food.

With the increased competition and industry consolidation, retailers need to re-think their strategies that can enable continuous growth and innovation. Therefore, many retailers are increasingly using private label as a strategic weapon to differentiate themselves and outperform competitors. According to SIAL Middle East, a leading event organizer in the region, 88% of the Middle East retailers they interviewed in 2014, were investing in private label expansion. Spinneys UAE recently announced to boost the exports of private labels in Middle East and North Africa (MENA) countries due to the increasing demand and recent success enjoyed by company’s private label offerings. Similarly Tesco, LuLu, and Carrefour have also announced their plans to further develop their private label offerings in the region within both food and non-food segments.

There are significant opportunities for GCC retailers in the private label space as these products are more profitable than branded products. By cutting the middleman (distributor) out, and by avoiding higher marketing costs associated with branded products, private labels enable retailers to increase gross margins. As today’s price conscious consumers are looking for best value for their buck, private labels offer consumers a wider range, better quality, and fairly priced products, thus creating a win-win option for retailers and customers in the current retail landscape. Moreover, private labels offer retailers with more bargaining power with their suppliers. It also helps retailers to have better control over their product offerings and category management. Although the opportunity for GCC retailers in private labels is clear, retailers in the GCC region have failed to reap their full potential. This is mainly because retailers within the region face an array of challenges.

Firstly, sourcing is a significant challenge for retailers as there are very few manufacturers in the region who have the capabilities to supply a range of high quality private label products. Most of these companies have existing manufacturing contracts with multinational retailers, which prohibit them from creating private label products for regional players. Other manufacturers and suppliers in the region face acute operational issues such as quality and supply chain management deficiencies that automatically make them unfit.

Secondly, the region has a diverse range of consumers of different nationalities, income levels, and other social demographics. Understanding their diverse needs is a challenge for retailers. So far, most of the retailers have focused solely on value, and failed to gauge the exact needs and expectations of these consumers due to lack of customer intelligence and the retailers’ limited ability to customize their private label offerings as per the regional market needs. GCC retailers have also failed to assess the current gaps in their assortment, and how they can utilize their private label offerings to fill these gaps.

Given the retail industry’s robust growth outlook, in order to grow and capture a bigger market share, retailers are using organic as well as M&A strategies. Therefore, M&A activity has also picked up within the industry. In the past few years many deals have taken place that involved region’s leading retailers such as Savola Group, Damas International, LuLu Group, and Al Meera Consumer Goods Co. As the retail landscape continues to consolidate, competition among retailers in the GCC will only get fiercer.

Private label is likely to become one of the key battlegrounds for retailers looking to succeed in these markets. As a first step, retailers should integrate private label with the company’s overall business strategy. Further, in order to succeed, retailers will have to develop a better understanding of the retail market landscape as well as shopping behavior of their target consumer segments. This will help them create targeted private label strategies tailored to shopper needs with optimal private label categories, branding, packaging, and pricing strategies. By collaborating with experienced manufacturers, GCC retailers need to ensure that right products are on the right shelves at the right time and price. It is critically important for retailers to strike the right balance between price and value. Cracking this code will allow retailers to strengthen growth and customer loyalty beyond 2015.

August 27, 2014by EOS Intelligence EOS Intelligence No Comments

Luxury Brands Losing Ground in China, Looking Elsewhere

It was not very long ago, when the European luxury products market sprung back to life on the back of the booming Asian markets. Right after the global recession, most luxury brands, however, re-strategized their efforts towards the high-end luxury-hungry markets of China and other Asia-Pacific regions. For the last several years, China has been the industry’s main growth engine, helping make up for lackluster demand in Europe and Japan. But this period seems to be ending much sooner than the industry would have wished for.

Leading luxury brands, Louis Vuitton, Gucci, and Burberry, are losing their shine in the Chinese market, which along with Hong Kong and Macau, represent more than a third of global sales for most of these brands. This premature slump is attributed not only to the stagnation in the Chinese economy, but also to a maturity in consumer tastes in the region.

Over the past few years, there was an explosion of demand for luxury items that communicated wealth and status to the society. However, on the flip side, this led to over-exposure of luxury brands, which in time has resulted in them losing their premium status. This has translated into a shift in priorities among such consumers, who now feel a ubiquitous ‘logo-fatigue’ with such products and are looking for goods that provide a more unique and authentic image.

Unlike the more established European and American markets, where trends and consumer preferences take a long time to form and assimilate, Asian (especially Chinese) markets have witnessed consumer trends emerge, become a fad, and then be rejected, very quickly. The shorter life span of a trend makes it a challenge for these companies to move out of the ‘masstige’ market (a combination of mass and prestige market) and present a fresh take on luxury items with discrete or even absent logos. Several brands, such as Saint Laurent and Balenciaga, have realized this shift in consumer perception of luxury and have been successful in implementing it.

Although most leading fashion and luxury brands have now embraced this trend in their Asian strategy, the demand from China is not expected to recover enough to regain its peak. A large proportion of luxury products’ demand came from China’s deep-embedded culture of lavish gifting for favors (to government officials); however, President Xi’s latest campaign against corruption and lavish gifting have further dampened sales of luxury products, especially watches.

This puts the industry in a challenging spot to re-innovate themselves for the Asian consumers as well as to find new growth frontiers. While other Asian counterparts, such as India, continue to look promising, luxury brands are now establishing presence in African markets. Sub-Saharan Africa is being viewed as a promising market for luxury goods on the back of increasing urbanization, economic development and most importantly a burgeoning aspirational middle-upper class that view luxury goods as a sign of status and success. Although, growth is from a low base, the appetite for luxury goods in this market is expected to soar. Leading brands – Cartier, Louis Vuitton, Burberry, Gucci, Fendi, and Salvatore Ferragamo, have already set foot in Africa. While these brands are largely concentrated in South Africa and Morocco, luxury sales are also picking up in new markets like Angola and Nigeria.

Although most companies have started focusing on developing themselves in the African markets, it is far-fetched to say that these markets will be able to substitute the demand from China and other maturing Asia-Pacific regions, especially any time in the near future. This puts the industry in a precarious position in the coming years, settling down for moderate growth. Companies that push themselves at this time, to redefine luxury and bring about radical changes to advertising campaigns and store designs to recapture the audience have a strong chance of emerging as market leaders.

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CONSUMER GOODS & RETAIL

Online Grocery Retailing In India: Will Clicks Replace Bricks?

CPG Companies – Facing the Load

Succeeding in Myanmar’s Fragmented Grocery Retail Industry

Have Big Box Retailers Successfully Metamorphosed the Indian Retail Culture?

Brazil’s Personal Care and Cosmetics Market: Transitioning from Physical to Digital?

EOS Perspective

Consumer Goods in Sub-Saharan Africa: Think Local, Act Local.

The Rising Importance of Private Labels for GCC Retailers

Luxury Brands Losing Ground in China, Looking Elsewhere