Unilever NV, analysts are sounding the alarm: global brands are gradually losing the initiative in the fight against local producers on many fronts: in Asia, Europe and America.
«Consumers are changing and no longer want to buy products global brands just because they are global,- said the Director Unilever Indonesia Hemant Bakshi at the conference «Asia: what’s cooking next year» in Jakarta, organized by Bloomberg. — Times when they looked to the West and looking for global brands, are gone. Now for them is much more important than what happens inside the country, in their small society.»
The trend shift in the local producers originated in Asia, which has always been considered by Western multinationals as an easy way of earning money due to the growing income of the population and the weakness of local competitors. The survey, conducted in 2011 China Market Research Group showed that 85% of the residents of China prefer Western brands.
However, since then the situation has changed dramatically. Just last year, the popularity of Western brands in China has decreased by half. Local company expanding their market share at the expense of global brands. Their products are cheaper than the products of Western competitors, they know better the intricacies of the local market and the tastes of consumers.
«Multinationals have underestimated local producers — explains the Director of China Market Research Group Shaun rein. Local players quickly reacted to the new trends which are global brands not pay attention. It is, for example, on electronic Commerce and popularity of a healthy lifestyle».
As examples at the conference in Jakarta, says Bloomberg, was given the coffee market in Indonesia and cosmetics in China: Nestle SA is clearly inferior to Indonesian coffee companies, and L’oreal SA to China is pressing Chinese cosmetic firm Pechoin.
The volume of Indonesian coffee market is estimated at 1.3 billion dollars. Indonesian company PT Abadi Javaprima produces coffee Luwak with the addition of excrement tropical predators fiverr or civet. She was able to increase its share in the Asia-Pacific region in the years 2012-16, according to the research company Euromonitor, more than doubled to 33%, while the share of Nestle dropped by 1.4% and now stands at 16%. Not surprisingly, shares of grocery giant last year fell for the first time since 2011.
Local coffee brands take precedence over Western not only thanks to the tastes of the population. Plays a significant role price: 540-gram Bank Nescafe White Coffee costs 65 thousand Indonesian rupiahs (4.8 dollars) and 450-gram Bank White Koffie – 23 thousand
Revenues from Nestle’s Asia, Oceania and Africa in 2014-16 will be presented. decreased by 2% to 14.3 billion dollars. To attract Asian consumers, the company has thrown on the market ready to drink cold coffee, opened its café at Chinese universities and have taken a number of other measures.
Buy the Russian!
Serious problems not only from Nestle. According to forecasts, the Chinese market products for the skin should grow by 2012 to 34 billion dollars. The record for sales growth it is not the products of Western type cosmetic giants L’oreal and skin moisturizer Pechoin manufactured by Chinese company Shanghai Pehchaolin Daily Chemical Co. To a large extent due to the patronage and support of the Chinese President wife Peng Liyuan, the share of this product in the market in 2012-16 years increased 5 times, and the company’s profit last year increased to $ 1 billion! The growth in popularity has happened in part by L’oreal Paris, which share in the same period declined by about 20%.
«Culture is very important for brands — I am sure Joan Miao, Director Pechoin.- We want to make products that are designed for Chinese women».
This, of course, does not mean that Asia has lost its appeal to global brands, but competition from local producers is growing every day. Many experts believe that not so far the day when Western companies will lose leadership in the region.
In Russia, multinational companies still feel confident enough. According to a global study of consumers to the origin of the manufacturer Nielsen, the Russians prefer their food. 88% of respondents prefer Russian dairy producers, 60% of the domestic ice-cream and 56% of manufacturers of mineral water.
At a conference in Jakarta Hemant Bakshi said that now the trend has spread to Western markets. Technology has made it easier for local companies to deal with transnational competitors. A great help local producers have the social network, and this is not surprising. Local produce is always best advertised word of mouth, even when the radio itself was not.