Capitalizing on changing consumer preferences: Indian Household products industry

This report is based on trends observed in terms of increasing health & hygiene consciousness among Indians, changing lifestyles and resultant household product choices. It captures current trends in product development and marketing across categories as well as the opportunities therein.This report is aimed at enabling NPD and marketing teams to identify potential in terms of product formulation.

Scope

- Identifies current drivers and inhibitors influencing Indian consumers' choice of household care products

- Explores consumer attitudes towards usage of household care products and emerging need states

- Focus area for companies in terms of products and product categories with a potential for innovation and growth

- Geographic scope is India

Highlights of this title

Preventive healthcare is increasing Indians' association of a sense of wellbeing with hygienic surroundings. Aggressive marketing from companies has tapped on to this potential. Though efficacy and convenience are important parameters, most consumers still tend to purchase household products on the basis of 'value for money' on a regular basis

From several trends shaping the household products industry, increased use of natural ingredients in formulation is the most apparent and well accepted among consumers. Also, peer reviews or product samples of household products do not seem to influence Indian consumers as strongly as personal trial.

According to the data from The Product Launch Analytics (PLA) database, air fresheners and laundry detergents accounted for the highest proportion of new product introductions tracked by The product specialists across India in 2009.

Key reasons to purchase this title

- Develop better targeted products based on an understanding of emerging household cleaning needs and preferences among Indian consumers

- Access analysis of primary consumer research and best practice examples of innovative and effectively marketed products

- Identifies emerging categories and opportunities in product formulation and marketing. Develop plans using recommendations as a catalyst for ideation

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Overview
Catalyst
Summary

Table of figures
The Future Decoded
INTRODUCTION: The emergence of a strong association between hygiene and wellbeing is driving the demand for more effective household products in India
Low per capita expenditure and penetration of household products by Indians allows room for significant market growth
The highly consolidated market structure in most product categories does not allow room for the easy entry of new incumbents
TREND: Socio-demographic and economic evolution is creating a fertile environment for the Indian household care market
The rising number of nuclear families is causing an increase in the overall number of households in India
Even with rising home loan rates, easy access to mortgages means that an increasing number of Indians either own a home or are planning to buy one in the near future
A non-commercial realty boom during 2003-04 resulted in a rise in the number of families buying their own homes and hence also home furnishings, kitchen appliances and other accessories
The high direct and indirect costs of home fittings and replacements have led to a heightened desire among Indians to protect and maintain their household appliances
Key takeouts and implications: rising home ownership levels among young Indian consumers is creating a heightened demand for home fittings and furnishings and products which help in their maintenance
TREND: A preoccupation with hygiene is impacting Indians' choice of household products
Over the last five years, the rising hygiene consciousness among Indians has resulted in above-average growth in categories such as toilet care and air fresheners
Rising healthcare costs are making Indians concerned about the hygiene of their surroundings
The spread of communicable diseases and occurrence of pandemics is driving Indians' desire for clean and germ-free homes
Aggressive campaigns and marketing communications by players have created awareness and increased the per-household usage of cleaning products significantly
Household products still have limited TV advertising penetration in India
Textile washing products in India are beginning to be marketed with claims of germ-free protection
Although toilet care products have a relatively high penetration in urban India, they are still being marketed aggressively to sustain the awareness that has been built amid a market filled with me-too brands
Moving away from incense sticks, there is increased acceptance among Indian consumers of pump and aerosol air fresheners as well
Marketing efforts for insecticides now focus on safety as well as effectiveness
Marketing communications for dishwashing liquid brands emphasize their ability to clean, disinfect and deodorize
Key takeouts and implications: the formulation and marketing efforts of Indian household care companies have moved from focusing solely on product efficacy to both direct and indirect health impacts/benefits
TREND: The changing lifestyles of Indians are driving the need for more efficient and convenient household care products
The changing societal role of Indian women and the lack of easy accessibility to affordable domestic help favor the growth of the household products industry and the desire for convenient efficacy
Growing demand for multifunctional household products and more sophisticated versions of standard items is arising out of an appreciation for 'value for money' rather than 'money for value'
The maximization of leisure time is a leading driver for sales of convenience-based and multi-functional products
Key takeouts and implications: convenience-led benefits such as ease of use, ease of storage and multi-functionality will play a major role in Indian consumers' household product purchase decisions in the years to come
INSIGHT: Value-consciousness shapes current consumption choices in the Indian household care market
Key takeouts and implications: as value-consciousness is a key driver in purchase decisions, promotional offers will not be sufficient as an ongoing strategy for Indian household product manufacturers looking to sustain sales
INSIGHT: Product claims have a more significant influence on Indians' choice of household cleaning and laundry products compared to individual family preferences
The increased participation of Indian men in grocery shopping is affecting household product sales trends
Key takeouts and implications: changing gender roles while shopping for household care products in India have added further complexities in the process of eventual purchase decision making; product claims are gaining more importance.
INSIGHT: Private label household care products are gaining from better value and quality associations among Indian consumers
Key takeouts and implications: as more and more Indians are viewing private label products as value for money, as opposed to just being a cheaper alternative, retailers will gradually shift away from using price as the key factor when promoting their products
INSIGHT: The influence of habit and brand image on Indian consumers' choice of household care products intensifies with age
Key takeouts and implications: younger Indian consumers are not as habit-driven when buying preferred brands; they display much lesser degree of brand loyalty as they are more driven by attractive value propositions
INSIGHT: Indian consumers are influenced by the presence of natural ingredients in household care products, although the degree of influence vary across genders and age groups
Key takeouts and implications: although the presence of natural ingredients appeals to Indian consumers, the skepticism that prevents the sustained purchase of such products needs to be addressed through careful product formulations and valid marketing claims
ACTION POINTS
ACTION: Cater to the consumer demand for household products that are less harsh on the skin and respiratory system and communicate this focus prominently
ACTION: Launch more products with multifunctional benefits to improve ease of use and storage
ACTION: Companies should explore the possibility of launching detergents and cleaners specifically designed for babies and toddlers
ACTION: Manufacturers need to take an 'educational' route to increase awareness in categories such as furniture polishes and air care, which are novel to Indian consumers
Appendix
Definitions
Air fresheners
Bleach
Dishwashing products
Furniture polish
General purpose cleaners
Insecticides
Scouring products
Textile washing products
Toilet care
Methodology
References and further reading
Ask the analyst
Datamonitor consulting
Disclaimer
List of Figures
Figure 1: Household product purchases are driven by a complex set of both inherent and extrinsic product attributes
Figure 2: Rising hygiene consciousness and the income levels among Indian consumers are strong drivers to push the demand for household products in the near future
Figure 3: Household products manufacturers' optimism is driven by the rising hygiene-consciousness among Indians and the very low per capita expenditure across most product categories
Figure 4: Household product adoption is still largely an urban phenomenon, and is restricted to few essential product categories overall
Figure 5: The household products industry in India is highly consolidated across almost all product categories
Figure 6: With nuclear families and rural-urban migration increasing, the average household size in urban India is falling
Figure 7: With the decreasing average age of home ownership, a greater number of urban Indians are living in their own homes
Figure 8: The optimism about the growth potential of the Indian residential realty sector in the next few years extends to the household furnishings market as well
Figure 9: Ownership levels of consumer durables such as refrigerators, washing machines and microwave ovens are increasing rapidly across urban Indian homes
Figure 10: Rising health and hygiene concerns among Indians have resulted in above average growth in categories such as toilet care and air fresheners over the period 2004-2009
Figure 11: With the changing social and professional lives of Indians, the share of wallet of food and beverages is expected to decrease considerably through to 2015, while that of healthcare is expected to rise significantly
Figure 12: Lack of attention to maintain hygienic surroundings in many Indian households results in higher incidence of communicable diseases such as respiratory infection and diarrhea
Figure 13: The communication strategies of most major household products brands in India have evolved into a 'challenge' style over the last few years to enhance consumer trust in their offerings
Figure 14: Household products accounted for 5% of all Indian TV ads in 2009
Figure 15: Only 8% of the total value of the total FMCG industry market value in India is contributed by household products
Figure 16: Apart from cleaning stains and dirt, textile washing products are attempting to incorporate claims of germ-free protection as well
Figure 17: Since the private-label toilet care brands in India have very similar product formulation, packaging and claims as the national brands, marketers of national brands are constantly trying to create tangible points of differentiation for their products
Figure 18: Air freshener brands in India are promoting the intangible, sensory benefits of their products to position such items as being for use not only in bathrooms or cupboards, but throughout the home
Figure 19: Insecticide brands in India have aligned their product formulation and package literature to communicate direct health impact and benefits, as well as emphasizing efficacy
Figure 20: Many dishwashing liquid brands in India have begun to communicate three key product benefits: cleaning, deodorizing and germ-removing
Figure 21: At 43%, the labor participation rate of Indian women is influencing the need for either domestic help or more effective, easy household product options
Figure 22: Multi-functional household products have huge potential in India, especially in categories such as textile washing products and surface cleaners
Figure 23: In categories such as textile washing products and dishwashing products, there is increasing demand for more sophisticated products with benefits that extend beyond the generic category traits
Figure 24: From purchase to disposal, the desire for convenience extends across all stages of consumers' interaction with household products
Figure 25: Only 50% of both Indian men and women are satisfied with their work-life balance and the general amount of leisure time they have
Figure 26: Ease-of-use claims for household cleaning and laundry products have a high level of influence over the purchasing decisions of close to 70% of Indian consumers
Figure 27: Ease-of-storage claims for household cleaning and laundry products have a high level of influence on the purchasing decisions of more than 60% of Indian consumers across both genders
Figure 28: The multipurpose functionality of household cleaning and laundry products has a high level of influence on the purchase decisions of close to 65% of Indian consumers
Figure 29: Indian men and women show altitudinal similarities with respect to value-for-money considerations when buying household cleaning or laundry products
Figure 30: Promotional offers on household cleaning and laundry products have a relatively low level of influence on purchase decisions, with only around 50% of consumers being influenced by reduced prices
Figure 31: Free product samples have a low level of influence on Indian shoppers, with only around 30% of consumers being highly influenced by these when selecting household cleaning and laundry products
Figure 32: When selecting household cleaning and laundry products, close to 60% of both men and women in India are highly influenced by the products' promise or claims of effectiveness
Figure 33: Family preferences have a significant level of influence on 50% of Indian shoppers when selecting household cleaning and laundry products
Figure 34: Indian consumers more often buy household products from modern stores formats than from traditional retailers
Figure 35: With respect to the purchase of daily household products, there is a significant proportion of urban Indian households in which both the husband and wife jointly take decisions
Figure 36: Close to 50% of Indian consumers that shop regularly at organized retail formats are highly influenced by the quantity and quality of private-label brands when deciding where to do their grocery shopping
Figure 37: Almost 80% of Indian consumers consider private-label household cleaning brands to be as good as national brands, if not even better in some cases
Figure 38: 60% of Indian consumers consider private-label laundry product brands to be as good as national brands, if not even better in some cases
Figure 39: Less than 30% of both Indian men and women buy private-label household cleaning or laundry products to save money on a regular basis
Figure 40: Female consumers in India are more habit/brand-driven in their choice of household cleaning and laundry products than men
Figure 41: Close to 60% of Indian consumers are influenced by brand image in their choice of household cleaning and laundry products
Figure 42: The presence of natural ingredients in household cleaning and laundry products has a high level of influence on almost 60% of Indian consumers across both genders
Figure 43: On a regular basis, only around 45% of Indian consumers choose products with natural/organic ingredients when shopping for household cleaning or laundry products
Figure 44: Indian household product manufacturers should create formulations that are gentle on the skin and the respiratory system, while not compromising on product efficacy
Figure 45: Product packaging literature of household cleaning and laundry products should communicate benefits beyond efficacy such as 'allergen-free', and 'gentle on hands'
Figure 46: Manufacturers of household cleaning products should explore the opportunities to incorporate the benefits of multi-surface application and multi-occasion usage
Figure 47: Laundry care products specifically meant for babies can significantly reduce the effort required compared to the laborious process currently followed in most Indian homes
Figure 48: Manufacturers have to capitalize on the fact that Indian parents are now willing to spend money on high quality laundry and cleaning products for babies' clothes and accessories
Figure 49: Although the demand for furniture polishes and cleaning agents exists, it needs to be converted into product sales
Figure 50: Companies should use compelling advertisements to educate Indian consumers about the importance of using air fresheners on a regular basis