Home and Personal Care sector are forecasted to experience growth in 2022. There are key factors that brands can adopt to secure the growth by being adaptive to the dynamic shoppers’ mobility and new level of hygiene-related needs.
After seeing a 6% growth throughout 2020 in the Home Care sector due to people spend more time at home, in 2021 both segments in the sector—Clothing and Home—are starting to stabilize as people start to get mobile.
The pattern in 2021 shows that consumers spend more on necessity categories such as Detergent, Dish Wash, and Insecticides. With this visible pattern, other smaller categories are more challenged to perform growth.
The growth of this sector is influenced by the lower-class consumers who are compensating lesser trips through bigger basket size. The lower-class consumers manage to contribute 3% growth while the higher class was only able to maintain the growth.
In terms of channel, the Home Care sector is more GT-centric compared to the overall FMCG industry. Both Home and Clothing segments are heavy on GT channel with 77% and 72% value contribution, respectively. Online channel, the rising star in all FMCG sector, also cannot be neglected in Home Care sector as the growth in 2021 reach over 50% despite small base.
Category Highlights
The growth of Detergent is driven by liquid format with its double-digit growth. The popularity of liquid detergent is highly dominated by sachet packs which contributes to 70% of its value.
There are three main trends in Dish Wash categories; the first is slowing down growth from 13% in 2020 to 4% in 2021, the second one is upsizing trend which can be seen across leading brands that can gain new buyers from their big pack, and the third one is preference of value for money since the growth from affordable brands is higher than other brands.
Home Insecticide value growth in 2021 is relatively stable with higher spend per buyer, but challenge is coming from penetration decline. The uplift in Jan-21 and Jul-21 is not as high as previous years as consumers focus is divided into Covid-19 and Dengue Fever.
Winning Trends
2020 was all about disinfecting our hands from germs and virus; in 2021, the trend expands to disinfect everything in various Home Care formats. For example, some laundry brands have launched a disinfectant innovation in form of fabric spray, Floor Cleaner brands have launched their wipe formats promoting better hygiene, and Detergent brands infuse antiseptic values to their products.
Various brands are starting to promote relevance with Islamic values. Some manufacturers create a new brand to deliver this value, and some brands acknowledge this value by adding new variant to their existing line-up. However, that additional value offered is also combined with good pricing and proposition to cover the needs of majority household in Indonesia.
Strategy for Success
Basic Home Care sector is expected to grow by 3.5% in 2022 with a consideration upon the Covid situation and level of Mobility.
Since consumers re-prioritize the needs for home care and prefer to opt for the basic, it is important to win over the share of wallet by focusing on core variant as well as offering a better value for money thru bigger pack.
General trade as the most prominent channel cannot be overlooked to optimize pack-price strategy to win in traditional trade and ride the growth in online channel.
During these uncertain times, brands can leverage the needs for hygiene-related innovation to stay relevant and enlarge buyer base.
In 2021, total Personal Care sector can grow in a slower rate than 2020. The bigger picture of General Care trend shows that the highest uplift happened in 2021 following the pandemic situation. The winning categories are facial tissue, shower gel, adult diaper, and hand sanitizer with double to triple digit growth.
Despite the slower growth in 2021, the growth in General Care is seen across all socio demographic classes, where upper class are downgrading while lower class manage to compensate their lower frequency through bigger baskets.
What did general care shoppers do differently this year?
Shoppers are open to shop in more than one channel. Growth is seen in GT as proximity channel as well as Specialty Store and Online that manage to recruit new shoppers. Specifically in Online channel, the penetration growth is almost double from 3.6% to 6.1%. The key drivers on this growing penetration are Liquid Soap, Shampoo, Facial Tissue, Bar Soap, and Toothpaste.
Growth is seen across medium and big pack size in basic hygiene categories like Liquid Soap, Toothpaste, and Shampoo. Double digit growth and up to 2.5 million new buyers from the three categories are proof that upsizing trends is happening in basic General Care.
Faster growth is scored by several brands in General Care segments coming from Liquid Soap and Shampoo categories with various price points. Several leading local brands are operating in premium price-tiers; showing that lower price does not always guarantee to get new buyers. In fact, buyers are willing to spend more for products that can justify the value for their brands.
Strategies for Success
General Care is forecasted to grow by 4.6% in 2022, including a consideration upon the Covid situation and level of Mobility.
Presence in GT and minimarket become a significant factor, but specialty store and online can be an opportunity to grow faster and extend shoppers’ recruitment. Accelerate digital transformation and embrace social commerce.
As General Care shoppers tend to purchase larger size products, having an optimal pack-price strategy is essential. But creating access through small pack size is also important to reach mid-lower-class shoppers.
Shoppers are evolving with more expectations, offering value for money as well as communicate and justify your value become the key to win shoppers.
