Beauty and Personal Care in PH Euromonitor Oct2014.pdf

BEAUTY AND PERSONAL CARE IN THE PHILIPPINES Euromonitor International October 2014

BEAUTY AND PERSONAL CARE IN THE PHILIPPINES

LIST OF CONTENTS AND TABLES Executive Summary ................................................................................................................ ..... 1 Beauty and Personal Care Slightly Decelerates in 2013 .................... ...................................... 1 Local Market Welcomes the Entry of Imported Brands ........................................................ ..... 1 Unilever Philippines Inc Maintains Market Leadership......................................................... ..... 1 Sari-sari Distributors Are the Main Distribution Channels for Beauty and Personal Care Products.............................................................. ................................................................. ..... 1 Beauty and Personal Care W ill Experience Moderate Growth in the Medium Term ................. 1 Key Trends and Developments .................................................................................... ................ 2 Beauty and Personal Care Sees Slower Growth in 2013 ........ ................................................. 2 Imported Brands Show More Interest in the Local Market ........................................................ 3 Manufacturers Complement Traditional Marketing Campaigns With Online Efforts ................. 4 Market Data ............................................................ ................................................................. ..... 4 Table 1 Table 2 Table 3

Sales of Beauty and Personal Care: Value 2011-2013 ................................ 5 GBO Company Shares of Beauty and Personal Care: % Value 2009 2013 ............................................................. ................................................ 5 Forecast Sales of Beauty an d Personal Care: Value 2016-2018 ................. 5

Colgate-Palmolive Philippines Inc in Beauty and Personal Care (philippines) ............. ................ 5 Strategic Direction ......................................................................................... ........................... 5 Key Facts ............................................................ ................................................................. ..... 6 Summary 1 Summary 2

Colgate-Palmolive Philippines Inc: Key Facts .............................................. 6 Colgate-Palmolive Philippines Inc: Operational Indicators ........................... 6

Company Background ......................................................................................................... ..... 6 Production ................................................................................................................................ 7 Competitive Positioning .................................................................................................... ........ 7 Summary 3

Colgate-Palmolive Philippines Inc: Competitive Position 2013 ..................... 7

Ever Bilena Cosmetics Inc in Beauty and Personal Care (philippines) ......................................... 8 Strategic Direction ......................................................................................... ........................... 8 Key Facts ............................................................ ................................................................. ..... 8 Summary 4

Ever Bilena Cosmetics Inc: Key Facts.................... ...................................... 8

Company Background ......................................................................................................... ..... 8 Production ................................................................................................................................ 9 Competitive Positioning .................................................................................................... ........ 9 Summary 5

Ever Bilena Cosmetics Inc: Competitive Position 2013 ................................ 9

Hbc Inc in Beauty and Personal Care (philippines) ...................................................................... 9 Strategic Direction ......................................................................................... ........................... 9 Key Facts ............................................................ ................................................................. ..... 9 Summary 6 Summary 7

HBC Inc: Key Facts ........................................................... ........................... 9 HBC Inc: Operational Indicators .............................................................. ... 10

Company Background .............................................................. .............................................. 10 Internet Strategy ............................................................ ......................................................... 10 Private Label ....................................................... ................................................................. ... 11 Summary 8

HBC Inc: Private Label Portfolio ................................................................. 11

Competitive Positioning .................................................................................................... ...... 11

© Euromonitor International

Passport

I


Summary 9

HBC Inc: Competitive Position 2013 ....................... ................................... 12

Procter & Gamble Philippines Inc in Beauty and Personal Care (philippines) ............................ 12 Strategic Direction .................................................................................................................. 12 Key Facts ............................................................ ................................................................. ... 12 Summary 10

Procter & Gamble Philippines Inc: Key Facts ............................................. 12

Company Background .............................................................. .............................................. 12 Production .............................................................................................................................. 13 Competitive Positioning .................................................................................................... ...... 13 Summary 11

Procter & Gamble Philippines Inc: Competitive Position 2013 ................... 14

Unilever Philippines Inc in Beauty and Personal Care (philippines) ........................................... 14 Strategic Direction .................................................................................................................. 14 Key Facts ............................................................ ................................................................. ... 14 Summary 12

Unilever Philippines Inc: Key Facts ......................................................... ... 15

Company Background .............................................................. .............................................. 15 Production .............................................................................................................................. 15 Competitive Positioning .................................................................................................... ...... 15 Summary 13

Unilever Philippines Inc: Competitive Position 2013 ................................... 16

Competitive Landscape ..................................................... ......................................................... 16 Competitive Landscape ..................................................... ......................................................... 17 Competitive Landscape ..................................................... ......................................................... 18 Competitive Landscape ..................................................... ......................................................... 19 Competitive Landscape ..................................................... ......................................................... 19 Competitive Landscape ..................................................... ......................................................... 20 Competitive Landscape ..................................................... ......................................................... 21 Competitive Landscape ..................................................... ......................................................... 22 Competitive Landscape ..................................................... ......................................................... 22 Competitive Landscape ..................................................... ......................................................... 23 Competitive Landscape ..................................................... ......................................................... 24 Competitive Landscape ..................................................... ......................................................... 24


Passport

II


BEAUTY AND PERSONAL CARE IN THE PHILIPPINES EXECUTIVE SUMMARY Beauty and Personal Care Slightly Decelerates in 2013 Following a strong performance in 2012, beau ty and personal care in the Philippines slightly slower retail value growth in current terms in 2013. The economy reported a robust performance, which helped stimulate demand from smaller, fast growing categories such as colour cosmetics, men‟s grooming and sun protection. However, the industry is challenged by the growing maturity of the largest categories including hair care, skin care, and bath and shower. Typhoon Yolanda, which devastated Visayas during the fourth quarter, was detrimental to the operations of both direct sellers and store based retailers, and contributed to the slower growth.

Local Market Welcomes the Entry of Imported Brands More imported brands in various categories entered the market in 2013. Improving income levels in urban areas, exposure to foreign brands via the internet, and more affluent consumers‟ demand for higher quality products encouraged the entry of more brands. The new entrants include Systema, Misslyn, Za, Shokubutsu Hana, Gosh Cosmetics, and NYX, among others. Older brands including Vidal Sassoon, Camay and Philosophy were reintroduced. These imported brands provided more alternatives to consumers and helped respond to increasing demand for products with added value.

Unilever Philippines Inc Maintains Market Leadership Unilever Philippines remains the undisputed leader in the local beauty and personal care market. The company takes the lion‟s share of retail value sales in major categories like skin care, hair care and deodorants. Unilever Philippines Inc continues to improve its foothold in the local market through its commitment to enhancing its product lines with more innovative offerings, using social media to keep up with its customers, and investing in high-profile promotional campaigns to strengthen its brands.

Sari-sari Distributors Are the Main Distribution Channels for Beauty and Personal Care Products Small neighbourhood sari-sari stores (local convenience stores) remain the most important distribution channel for beauty and personal care products. These retailers account for around one quarter of retail value sales, and often carry products in smaller a nd sachet packaging. Aside from the more affordable offerings, sari-sari stores benefit from their proximity to consumers.

Beauty and Personal Care Will Experience Moderate Growth in the Medium Term The growing economy in the Philippines is expected to create a b ackdrop conducive to the expansion of beauty and personal care products. Manufacturers are projected to maintain their zest for bringing more products into the market and pushing their brands through more creative


Passport

1


promotional campaigns via traditional and online media. On the consumer side, the growing number of young professionals in urban areas will continue to create a pool of more adventurous buyers who are more willing to try new offerings, demanding more product benefits, and spending more to i mprove their looks.

KEY TRENDS AND DEVELOPMENTS Beauty and Personal Care Sees Slower Growth in 2013 The vibrant economic performance in the Philippines during 2013 contributed to the moderate growth experienced in beauty and personal care. The cou ntry exceeded expectations and surpassed its regional peers in terms of GDP growth. Annual GDP growth expanded by 7%, up on the previous year. The robust economic growth in the country was largely driven by consumer spending. The Bangko Sentral ng Pilipinas estimated that Filipinos‟ personal spending improved by 6% during the year. Middle-income consumer spending power benefited from the increasing number of higher-than-average paying jobs from the business process outsourcing industry and remittances abroad. Buyer confidence remained positive throughout the year. These improvements in the macro-economy propelled retail value sales in beauty and personal care. Filipinos continued to spend on beauty and personal care products as a part of their daily hygiene, and i ncreasingly, to improve their appearance. However, the industry is challenged by the increasing maturity of huge categories such as skin care, hair care, and bath and shower. Furthermore, Typhoon Yolanda, which hit the Philippines, affected spending in devastated areas in Visayas. These factors affected the performance of direct sellers and store brands, which have significant customer bases in these areas. The beauty and personal care industry in the Philippines is characterised by a huge, stable market with slowing growth and the presence of emerging categories with vibrant performances. Hair care, which accounted for one quarter of total retail value sales in 2013, witnessed minimal growth. The most vibrant categories were sun care and colour cosmetics. Fragrances registered the most sluggish growth. Outlook The economy in the Philippines is expected to remain among the most promising in Asia. Euromonitor International predicts that real GDP growth will range from 5.3% to 5.7% over the next five years. Though Visayas will focus on rebuilding, the government is expected to assist financially with reconstruction efforts in 2014. The country will is also set to enjoy a better position with its balance of payments due to the surge of international aid. Meanwhile, the Philippines is expected to welcome more foreign investment in the medium term. The beauty and personal care market will benefit from the good economic prospects in the next five years. Filipino consumers will continue to allocate a signifi cant portion of their budget to beauty and personal care products. The industry will continue to be challenged by the maturity of huge categories. In hair care, retail value growth is expected to slow in standard shampoos and 2-in-1 products. Skin care will struggle to expand its customer base to younger buyers. Bath and shower already has deep penetration and is expected to register a minimal retail value CAGR at constant 2013 prices over the forecast period. The popularity of lesser brands‟ products among lower and middleincome consumers will contribute to the slower performance of these huge categories. Despite the presence of fast growing categories within these, it is expected that market base expansion will come from the price conscious consumers.


Passport

2


Colour cosmetics is expected to register the strongest retail value CAGR at constant 2013 prices over the forecast period as more Filipinos are expected to use these products daily. Meanwhile, sun care will benefit from tourism and increasing consumer awareness about the sun‟s harmful effects. Depilatories, on the other hand, will also post an above-average CAGR as consumers buy higher priced products such as hair bleaches and wax.

Imported Brands Show More Interest in the Local Market More foreign brands entered the market in 2013, taking advantage of Filipinos‟ desire for more alternatives and products with added-value benefits. While most of the brands introduced were new, others had operated in the country before and were returning to the market. It is also interesting to note that while some products are positioned as premium, some have mid-range and economy positioning. The vibrant colour cosmetics category saw the introduction of European cosmetic brands Misslyn, Essence, Deborah Milano, Gosh Cosmetics, and Flormar as well as other brands like NYX and BTS. Oral care saw the entry of Japanese lifestyle oral care brands Zact and Systema. Masstige brand Za by Shiseido Co Ltd was also introduced in 2013. Market leader Unilever Philippines Inc introduced its newest premium hair care brand TONI&GUY. Following the successful reintroduction of beauty soap brand Camay in 2012, Procter & Gamble Philippines Inc resurrected its hair care brand Vidal Sassoon. Philosophy, which has lines in fragrances, skin care, and colour cosmetics, also re-entered in 2013. Imported brands‟ interest in the market in the Philippines provided customers with a wider array of choices, allowing them to choose products that provide the b enefits they need. Though none of these new entrants have a significant market share yet, they are beginning to carve out specific consumer niches, especially among more affluent buyers. Brands which have addedvalue benefits might be able to improve market sales in mature categories. Outlook The good economic prospects in the Philippines are expected to encourage the entry of more imported brands. Consumer spending is expected to be the primary driver of growth i n the country, with an increasing base of middle-income consumers in Metro Manila and key cities nationwide. Imported brands are expected to appeal more to affluent consumers who are looking for added-value benefits and better-than-mainstream brands. The success of the mass brands launched in 2013 is dependent on their ability to establish strong brand images and differentiate themselves from the competition. Despite the number of new brands, only Systema, Hana and Vidal Sassoon invested in wide advertising campaigns. Consumer awareness might help propel these brands but they will be challenged by the strong position of industry stalwarts with an established market base. Another challenge for mass brands will be encouraging highly loyal customers to shift to new products. Established players invest heavily in product innovation and aggressive marketing campaigns thus newly introduced foreign mass brands are likely to achieve only limited success. Creation of market niches is possible but gaining mainstream popularity is unlikely given the strong position of incumbents. Premium brands entering the local market might have better opportunities i n gaining clientele among more upscale consumers. The higher levels of income in Metro Manila and increasing consumer awareness of premium brands abroad via travel and online communities create a backdrop conducive to growth. More affluent buyers are increasingly becoming interested in premium products, especially those popular in other countries.


Passport

3


Manufacturers Complement Traditional Marketing Campaigns With Online Efforts As Filipino consumers become increasingly tech-savvy, manufacturers are augmenting traditional promotional efforts with online strategies. The growing penetration of the internet in the Philippines, which is stimulated by cheap mobile devices with internet connectivity, is shaping the way consumers access information and use it in decision making. Manufacturers have been quick to take advantage of these developments and increasingly integrate online campaigns with traditional methods. The local beauty and p ersonal care industry continues to be among the highest spenders in terms of television advertising. Manufacturers aggressively promote products through traditional media but are noticeably referring to their social media pages in tri-media campaigns. For instance, Palmolive Naturals‟ television commercials encourage consumers to visit the brand‟s Facebook page for more product information and brand updates. This is the same strategy employed by market leaders Unilever Philippines Inc and Procter & Gamble Philippines Inc, where customers are advised to check details of promotional campaigns on Facebook. Unilever Philippines Inc also opened its new website called Manifesto which will serve as an online community for men and tackles topics such as grooming, money, technology and sports, among others. Another development in 2013 was the increasing use of YouTube videos that features high profile celebrities. Mass general body care brand Jergens raised consumer awareness of its brands through its online romantic comedy, which led to subsequent online contests. Another popular YouTube video series for Head & Shoulders featured famous actor John Lloyd Cruz and internet sensation Ramon Bautista. Beauty bloggers also took a step f orward and started testing well-known brands and sharing their experience through vlogs. Online contests which encourage consumers to share their pictures and experiences with brands are also popular. These not only give buyers more sense of involvement and brand attachment but also serve as a testimony to the efficacy of the brand. Outlook Online and social media strategies are expected to increase in importance in the next five years. While traditional advertising campaigns such as television, radio and print will continue to be the primary means of reaching buyers, online campaigns are expected to become more prevalent and necessary to cater to younger, tech-savvy buyers. The internet will be an important touchpoint that manufacturers will utilise in order to have a holistic marketing approach. Social networking sites such as Facebook and Twitter will remain the most popular spaces for brands to directly connect with buyers. Manufacturers will also increasingly invest in the production of online videos to post relevant brand information, place celebrity endorsements, and give tutorials on how to use their products. Celebrities will continue to become key brand ambassadors but the possibility of having blogger endorsers is also possible. The use of internet campaigns is expected to help manufacturers build their brands a nd gain the awareness and loyalty of young consumers. As most internet users are in their teens and twenties, online campaigns are good opportunities to introduce brands to first-time users, allowing manufacturers to expand their customer bases. The use of online videos for tutorials can educate consumers about product usage and create better opportunities for brands in colour cosmetics, depilatories and men‟s grooming.

MARKET DATA


Passport

4


Table 1

Passport

Sales of Beauty and Personal Care: Value 2011-2013

PHP million

Beauty and Personal Care Source: Note 1:

Note 2:

2011

2012

2013

137,806.1

143,171.3

147,375.1

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Premium/mass beauty and personal care sales are additionally included within baby and child-specific products, bath and shower, colour cosmetics, deodorants, fragrances, hair care, sets/kits, skin care and sun care. Sum of categories is greater than market size because the four men‟s toiletries categories are included in men‟s grooming as well as in bath and shower, deodorants, hair care and skin care.

Table 2

GBO Company Shares of Beauty and Personal Care: % Value 2009-2013

% retail value rsp Company Unilever Group Procter & Gamble Co, The Colgate-Palmolive Co Avon Products Inc Johnson & Johnson Inc

2009

2010

2011

2012

2013

16.2 17.4 12.8 9.1 5.5

19.6 16.9 12.9 9.3 5.5

20.3 17.0 12.4 8.7 5.3

20.5 17.0 12.2 8.6 4.9

21.0 17.1 12.2 8.1 4.9

Source:

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 3

Forecast Sales of Beauty and Personal Care: Value 2016-2018

PHP million

Beauty and Personal Care Source: Note 1:

Note 2:

2016

2017

2018

152,828.4

155,952.3

159,715.8

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Premium/mass beauty and personal care sales are additionally included within baby and child-specific products, bath and shower, colour cosmetics, deodorants, fragrances, hair care, sets/kits, skin care and sun care. Sum of categories is greater than market size because the four men‟s toiletries categories are included in men‟s grooming as well as in bath and shower, deodorants, hair care and skin care.

COLGATE-PALMOLIVE PHILIPPINES INC IN BEAUTY AND PERSONAL CARE (PHILIPPINES) Strategic Direction 

Colgate-Palmolive Philippines Inc will strengthen its foothold in the local market by developing new products that suit the emerging needs of buyers. In bath and shower, it is projected that the company will launch more whitening variants made fro m natural ingredients while keeping its prices affordable. Meanwhile, the company will see more competition in hai r care, where other competitors are constantly coming in and launching new variants. The company is set to push its conditioners brand to take advantage of the category‟s vibrant growth while expanding its 2-in-1 range with products for salon treated hair. Colgate-Palmolive will b e


5


Passport

challenged more in the mature oral care market. In order to increase sales, it i s expected to focus on markets with strong potential and la unch products with more added value.

Key Facts Summary 1

Colgate-Palmolive Philippines Inc: Key Facts

Full name of company:

Colgate-Palmolive Philippines Inc

Address:

1049 J. P. Rizal Avenue, Makati City, Metro Manila, 1200 Philippines

Tel:

+63 2 895 9457

www:

www.colgate.ph

Activities:

Manufacture and distribution of beauty and personal care products and household care products

Source:

Euromonitor International from company reports, company research

Summary 2

Colgate-Palmolive Philippines Inc: Operational Indicators 2011

2012

Net sales

Ps11,349 million

Ps12,278 million

Net profit

Ps1,379 million

Ps1,523 million

Source:

Euromonitor International from company reports, company research, trade press, trade sources

Company Background 









Colgate-Palmolive Philippines Inc operates the local business of Colgate-Palmolive in the Philippines. The company is among the largest business organisations in the country. The company established consumer loyalty for its products through its longstanding presence in the market. The business organisation has three brands in the Philippines – Colgate, Palmolive and Axion. Colgate is the number one oral care brand in the Philippines while Palmolive is popular in bath and shower, and hair care. Axion competes in household care. Colgate-Palmolive Philippines Inc‟s products are distributed nationwide. The company‟s brands are retailed through a wide range of retailers including sari -sari stores, independent small grocers, convenience stores, hypermarkets, supermarkets, parapharmacies/drugstores, and beauty specialist retailers. Colgate-Palmolive Philippines Inc renewed its partnership with largest retailing firm SM Investments Corp for the distribution of its products through its modern grocery retailing channels. It should be noted that in 2009, the multinational‟s products were withdrawn from the local retailer‟s shelves following a di spute about billing processes. During 2013, the companies forged another mutually beneficial partnership which will allow the multinational to regain its market base. The company continued to launch products with added-value benefits in 2013. Its Palmolive Naturals White + Milk bath soaps offer a new formulation that claims to have 100% natural whiteners that can whiten skin for one week. In oral care, the multinational launched its whitening toothpaste brand Colgate Optic White and its toothbrushes brand with charcoal


6


Passport

called Colgate Slim Charcoal Bristle Toothbrush. This new toothbrush has slimmer bristles which claim to clean teeth more e fficiently by getting further in between teeth. 

The multinational continued to invest in high-profile advertising campaigns. The company employed celebrities such as Anne Curtis, Janella Salvador and Julia Barreto as its endorsers in 2013. But aside from these, the company also tried to engage customers by continuing its campaign called Circle of Ten. Palmolive is looking fo r 10 talented young Filipino women for its television commercials. Palmolive also launched No-Comb Revolution, emphasising its hair care products‟ efficacy in delivering soft and smooth hair.

Production 

All Colgate-Palmolive Philippines Inc products which are distributed in the local market are manufactured at its production facilities in Thailand.

Competitive Positioning 









Colgate-Palmolive Philippines Inc ranked third in beauty and personal care i n 2013, with 12% of total retail value sales, derived from its products in bath and shower, hair care, and oral care. The company has a loyal clientele in the local market. Its brands Colgate and Palmolive have strong brand images through the multinational‟s investment in high-profile campaigns, development of new products and wide distribution network. The company‟s retail value share increased in 2013 as i t aggressively pushed its products with extensive advertising campaigns in traditional and social media. Meanwhile, new product launches kept customers interested in its brands. The good economic climate in the Philippines during the year also helped generate demand at all income levels. Bath and shower, hair care, and oral care are among the largest categories in beauty and personal care. With the highest penetration rates, manufacturers are challenged by the increasing maturity and decline in growth rates. Colgate -Palmolive‟s current retail value sales in bath and shower fell by 4%, sales in oral care increased by 4% and the company‟s retail value sales in hair care increased by 5% in 2013. Despite its being positioned in slower moving categories, Colgate-Palmolive was able to slightly grow its shares in most categories. The company‟s product portfolio is relatively narrow compared to other leading multinationals. However, this gives the company more focus. Its products appeal to consumers at all income levels through the variety of its variants and packaging. All of i ts products are offered both in l arge and sachet packaging. Smaller packaging allows its products to be distributed in sari-sari stores and reach lower-income consumers. Colgate-Palmolive Inc sustains its market leadership in categories such as toothpaste, 2-in-1 products and toothbrushes through its investment in research and development. The multinational is among the most aggressive in launching more innovative products. Being quick to introduce better product offerings al lows it to establish strong brand images.

Summary 3

Colgate-Palmolive Philippines Inc: Competitive Position 2013

Product type

Value share

Rank

Beauty and personal care

12.3%

3

Bath and shower

12.8%

2

Hair care

12.6%

3

Oral care

46.5%

1


7


Source:

Passport

Euromonitor International from company reports, company research, trade press, trade sources, trade interviews

EVER BILENA COSMETICS INC IN BEAUTY AND PERSONAL CARE (PHILIPPINES) Strategic Direction 

Ever Bilena Cosmetics Inc will take advantage of the growing number of teens who are using and are eager to try colour cosmetics. It is expected that the company will continue to expand its line of affordable products that cater to price-conscious buyers. The direct seller is also keen to expand its network of agents to penetrate more locations in the Philippines, especially in provincial areas.

Key Facts Summary 4

Ever Bilena Cosmetics Inc: Key Facts


Ever Bilena Cosmetics Inc

Address:

289 Reparo St., Sta. Quiteria, Caloocan City, Philippines

Tel:

+63 2 330 0088

Fax:

+63 2 361 3964

www:

www.everbilena.com.ph

Activities:

Distribution of beauty and personal care products

Source:









Ever Bilena Cosmetics Inc is an independent direct seller of b eauty and personal care products. The company‟s operations in the country started in 1983. During its early years, the company distributed its products through department stores. It branched out into direct selling in 2004 as it recognised demand in the local market for beauty and personal care products which are affordable and more accessible. Ever Bilena Cosmetics Inc‟s first product was nail polish. Over the years, the company‟s range expanded to include deodorants, colour cosmetics, skin care and fragrances. The company operates solely in beauty and personal care. The distribution of company‟s products is undertaken by its sales agents nationwide. Ever Bilena Cosmetics Inc continues to expand its base of sales agents to improve its market penetration. The company‟s products are also available in key department stores and chained supermarkets and hypermarkets located in Metro Manila a nd major cities nationwide. During 2013, the company celebrated 30 years in the local market by commissioning actress Sunshine Cruz as its newest endorser. The celebrity embodies timeless beauty and elegance, which Ever Bilena Cosmetics Inc represents.


8


Passport

Production 

Ever Bilena Cosmetics Inc‟s products sold in the Philippines are imported.








Ever Bilena Cosmetics Inc ranked 10th in beauty and personal care with 1% of total retail value sales in 2013. The company strongly competes with well-known direct seller Avon Cosmetics Inc. In order to differentiate i tself from the multinational, Ever Bilena Cosmetics Inc keeps its pricing competitive. Compared to 2012, the company‟s share grew in 2013. This was driven by their strong performance in colour cosmetics. Their continuous p roduct development and a ggressive distribution continued to drive the growth of the group. Ever Bilena operates in the fastest growing categories. Colour cosmetics and men‟s grooming were among the most vibrant categories in beauty and personal care in 2013. The company‟s current retail value sales in colour cosmetics increased by 6%, while its sales in men‟s grooming sales increased by 6%. However, tough competition with mainstream brands continued to challenge the group. The company‟s product portfolio is narrower than that of its other direct selling competitor, Avon Cosmetics Inc. The company‟s main strategy is to offer good products at affordable prices. Ever Bilena Cosmetics Inc does not invest specifically to i ntroduce innovative products but focuses on providing low-priced alternatives to products which are doing well in the market.

Summary 5

Ever Bilena Cosmetics Inc: Competitive Position 2013

Product type

Value share

Rank


1.4%

10

Colour cosmetics

21.8%

2

Deodorants

5.2%

5

Men‟s grooming

4.3%

6

Source:


HBC INC IN BEAUTY AND PERSONAL CARE (PHILIPPINES) Strategic Direction 

HBC Inc is keen in expanding its store ne twork by opening up more stores in the provincial areas. The company is planning to double its sales within the next five years as it penetrates more key cities and municipalities. HBC stores are also expected to improve the sales of store brands by the introduction of new variants. HBC will remain committed in bringing effective yet affordable products for the price conscious buyers.

Key Facts Summary 6

HBC Inc: Key Facts



HBC Inc

9


Passport

Address:

HBC Corporate Center 548 Mindanao Ave. Corner Quirino Highway Novaliches 1008, Quezon City, Philippines

Tel:

+63 2 984 5555

Fax:

+63 2 456 2405

www:

www.hbc.com.ph

Retailing channels of operation:

Beauty specialist retailers, parapharmacies/drugstores

Retailing brands:

HBC, HBC ShopMore

Source:


Summary 7

HBC Inc: Operational Indicators 2011

2012

2013

Net sales Ps million

1,900.7

1,837.7

1,745.9

Outlets

210

188

188

Selling space („000 sq m)

19.4

17.4

17.4

Year end December

Source:









HBC Inc operates a chain of beauty specialist retailers in the Philippines, which sells both mainstream and exclusive beauty and personal care products. HBC Inc started with six stores in 1993. The stores initial ly catered to independent manicurists who trust the nail care products and tool sharpening services offered by the brand. In 2002, the company expanded nationally and launched Beauty Exclusives, its beauty and personal care brand. In 2011, HBC Inc acquired the SaveMore Drug chain, which had more than 50 outlets. These stores were renamed HBC ShopMore, which a lso marked the company‟s move into community shopping, or the operation of small grocery outlets that serve a certain locality. While HBC ShopMore also sells a wide range of beauty and personal care products, a large proportion of selling space is dedicated to packaged food and other grocery items. HBC Inc is a wholly-owned subsidiary of Splash Corp. The organisation is engaged solely in retailing. HBC operates nationally with stores in three main island groups – Luzon, Visayas and Mindanao. More than half of i ts outlets are located in Metro Manila a nd Luzon cities and municipalities while fewer than 40 are in Visayas and Mindanao. Aside from opening company-owned stores, HBC Inc also established a presence in the country through franchising.

Internet Strategy 

Recognising the huge number of Filipino consumers seeking information about brands and companies online, HBC Inc established its online presence through its website www.hbc.com.ph. This website contains information about the company and devotes much space to its exclusive brands. It also lists the locations of its beauty specialist retailer outlets.


10






Passport

In order to keep u p with the popularity of social networking in the Philippines, HBC Inc‟s website links to its own Twitter and Facebook pages. Consumers can “like” the company‟s Facebook page and Twitter page through i ts website. The company also tries to engage consumers and establish loyalty through its news feeds, which consumers can sign up for. HBC Inc caters to Filipinos abroad by selling i ts products online through its website. Consumers can directly place an order, pay for it, and have the items shipped to their address.

Private Label 





From its first private label Beauty Exclusives, HBC Inc‟s store brands grew robustly over the years. The company offers a wide range of beauty and personal care brands which cater to different age groups and consumer needs. The company‟s private label por tfolio includes 11 brands which are d istributed exclusively in its stores. These include Allue, BioPure, Body Recipe, CleanXone, Healthy Exclusives, Herbal Fresh, Hortaleza MD, Hortaleza Professional, HP, Inigo, and SanSan. Most of HBC‟s private label products are mid-priced and appeal to l ower- and middle-income consumers. HBC Inc‟s consumers are mostly students and middle-income women who trust in the efficacy of its products against mainstream brands.

Summary 8

HBC Inc: Private Label Portfolio

Private label brand

Category/ies

Notes

Allue

Colour cosmetics, deodorants, bath and shower

For teens

BioPure

Bottled water

Budget range

Body Recipe

Bath and shower, deodorants, skin care,

Natural

Clean zone

Detergent

Budget range

Healthy Exclusives

Consumer health

Naturally healthy

Herbal Fresh

Oral care

Natural

Hortaleza MD

Skin care

Dermatological

HP

Hair care

Professional hair care

Inigo

Men‟s line

SanSan Source:

Colour cosmetics

Make-up with vitamins





HBC Inc is the largest beauty and specialist retailer in the Philippines with 188 stores nationwide. The company‟s estimated sales reached Ps1.7 billion in 2013, which is around one-third of the to tal revenue of beauty specialist retailers. HBC‟s retail value share in the bea uty specialist retailers dropped from 36% in 2012 to 32% in 2013. The company is challenged b y the increasing number of chained supermarkets and parapharmacies/drugstores which are opening up i n key municipalities and cities nationwide. Brands such as SaveMore and Watsons are increasing their penetration in more provinces, which hinders the growth of HBC store sales. Furthermore, HBC Inc also competes with direct


11


Passport

sellers such as Ever Bilena Cosmetics Inc and Avon Cosmetics Inc, which are focused on beauty and personal care products. 

HBC‟s brands also compete with mainstream products. Manufacturers of standard brands are gaining as they launch high -profile campaigns and improve their product lines. Because of these, Filipino buyers are turning to mainstream brands retailed by modern and traditional grocery retailers.

Summary 9

HBC Inc: Competitive Position 2013

Beauty specialist retailers Source:

Value share

Rank

32.2%

1


PROCTER & GAMBLE PHILIPPINES INC IN BEAUTY AND PERSONAL CARE (PHILIPPINES) Strategic Direction 

Procter & Gamble Philippines Inc will capitalise on the expected improvement in the economy in the Philippines. For beauty and personal care, the multinational is projected to invest in research and development to introduce more products with added-value benefits to respond to the increasing base of middle-income consumers. The company will also remain aggressive in terms of advertising campaigns. Its resurrection of brands such as Camay and Vidal Sassoon signals its renewed dedication to strengthen its f oothold in the local market.

Key Facts Summary 10

Procter & Gamble Philippines Inc: Key Facts


Procter & Gamble Philippines Inc

Address:

6750 Ayala Office Tower, Makati City, Philippines

Tel:

+63 2 894 3955

Fax:

+63 2

www:

http://www.pg.com/en_PH/

Activities:

Manufacture and distribution of beauty and personal care, packaged food, and household and disposable paper products

Source:



Procter & Gamble Philippines Inc is the local a rm and subsidiary of multinational The Procter and Gamble Company. The company celebrated its 70th year in the Philippines in 2005 and renewed its commitment to serving the local market.


12










The company is an important player across diverse industries in the Philippines. Aside from beauty and personal care, Procter & Gamble operates in packaged food, pet products, consumer health, household care, and disposable paper products. The company‟s products enjoy nationwide distribution through its strategic alliance with a huge number of distributors and retailers. Its products are sold in modern grocery retailers such as supermarkets, convenience stores and hypermarkets as well as traditional channels such as independent small grocers and sari-sari stores. Procter & Gamble Philippines Inc‟s brands are also available in non-grocery retailers such as beauty specialist retailers, parapharmacies/drugstores, and department stores. Procter & Gamble Philippines Inc continued to strengthen its position in beauty and personal care through the introduction of new p roducts. Towards the end of 2012, the company reintroduced its Camay brand. It should be n oted that Camay was a notable beauty soap in the Philippines but was withdrawn as the company focused on larger brands. The comeback of Camay also signals the multinational‟s greater interest in growing its body wash/shower gel sales. The new Camay is positioned to have romantic scents and has moisturising benefits . Aside from Camay, Procter & Gamble Philippines Inc also resurrected its Vidal Sassoon hair care brand. The company offers two new lines fo r this brand namely basic care and colour care. Vidal Sassoon products include shampoo, conditioner, hair treatment, and magic style activator.

Production 



Procter & Gamble has manufacturing facilities in Cabuyao, Laguna, a province south of Metro Manila. The production plant does not just serve the local market but also caters to demand from other Asian countries. The production plant in the Philippines manufactures beauty and personal care brands including Safeguard, Zest, Secret and Old Spice. All other Procter & Gamble brands are imported. During 2013, the company invested Ps2.2 billion to upgrade the Cabuyao Plant. The multinational expected a boom in demand for its products, which necessitated the expansion and upgrade of i ts line that produces the brands Tide, Safeguard, Pampers, and Head & Shoulders.






Procter & Gamble ranked second in beauty and personal care i n 2013, with 15% of retail value sales. The multinational is the undisputed leader in bath and shower. The company‟s biggest brand in the Philippines is Safeguard. Other important Procter & Gamble brands include Pantene, Head & Shoulders, and Rejoice. The company‟s brands enjoy strong brand equity in the lo cal market thanks to their longstanding presence in the market. The multinational is also able to adapt itself to the local market through its use of l ocal endorsers and developing products that appeal and respond to local needs and culture. Procter & Gamble continues to invest in aggressive advertising campaigns that stimulate demand for its products. Its engagement in the development of more innovative products keeps customers interested and a llows it to constantly differentiate itself from competitors. The multinational has a wide product p ortfolio that spans categories such as bath and shower, colour cosmetics, deodorants, hair care, men‟s gr ooming, skin care, and sets/kits. This product portfolio enables it to tap into fast-growing categories and enjoy the stability of mature categories. The bulk of Procter & Gamble‟s retail value sales are in bath and shower, where


Passport

13


Passport

its sales increased by 3% in 2013. Meanwhile, men‟s grooming, deodorants, and skin care were among the faster-growing categories during the year. 



The company‟s products appeal to consumers at all income levels through strategic product positioning and a wide range of variants. Procter & Gamble utilises both regular and smaller packaging to appeal to a wide customer base. It should be noted that in large categories such as hair care, skin care, and bath and shower sachet packaging is important to make products affordable and reach lower-income consumers. Beauty and personal care products in sachets are retailed in small n eighbourhood stores which are instrumental in penetrating the mass market. Procter & Gamble often sticks to the positioning of its brands but innovates to add value to its products or target a specific niche. This strategy is essential especially as the multinational is operating in more mature categories where sales are grown b y aiming at markets with strong potential. Innovation is known as a key success factor in the local beauty and personal care market. The multinational actively pushes new variants that cater to the emerging needs and lifestyles of buyers.

Summary 11

Procter & Gamble Philippines Inc: Competitive Position 2013

Product type

Value share

Rank


14.60%

2

Bath and shower

37.30%

1

Colour cosmetics

2.90%

6

Deodorants

5.70%

4

Hair care

22.60%

2

Men‟s grooming

22.00%

2

Skin care

5.00%

5

Sets/kits

8.30%

3

Source:


UNILEVER PHILIPPINES INC IN BEAUTY AND PERSONAL CARE (PHILIPPINES) Strategic Direction 

Unilever Philippines Inc is expected to intensify its efforts to sustain i ts market leadership and take share from competitors. Aside from keeping its unit prices generally competitive, the company will also work on introducing products with more added-value b enefits to cope with the emergence of more discriminating buyers. The company is expected to strengthen its position in fast-growing categories including conditioners, men‟s grooming, and other colour cosmetics, among others. Unilever Philippines Inc will remain aggressive in its promotional campaigns, utilising both traditional and social media. The company is expected to harness internet technology to connect to younger, tech -savvy users.

Key Facts


14


Summary 12

Passport

Unilever Philippines Inc: Key Facts


Unilever Philippines Inc

Address:

1351 United Nations Ave, Manila, Philippines

Tel:

+63 2 588 8800

Fax:

+63 2 564 7259

www:

www.unilever.com.ph

Activities:

Manufacture and distribution of packaged food, beauty and personal care, and home care and disposable paper products

Source:











Unilever Philippines Inc is the local arm and subsidiary of the multinational Unilever. During the early 1900s the business was locally known as the Philippine Refining Company, which was produced 100,000 tonnes of coconut oil at its peak. Today, the company is among the largest business organisations in the country. Most of Unilever Philippines Inc‟s brands are in beauty and personal care products. However, the company also operates in other industries including packaged food, non-alcoholic drinks, and household care products. One pillar of Unilever Philippines Inc‟s success in the domestic market is its strategic partnership with huge and small, independent an d chained retailers that ensure nationwide distribution of its products. The company‟s brands are retailed in modern and traditional grocery channels, beauty specialist retailers, department stores, and parapharmacies/drugstores. Unilever Philippines Inc remains committed to improving its product line to suit the needs of its target market. In 2013, the company launched an innovation in skin care which responds to Filipinos‟ perception of beauty. Pond‟s White Beauty with Korean Ginseng and Saffron promises to whiten skin layer by layer to give consumers not just fairer but rosy translucent skin. Another innovation in skin care was Pond‟s Acne Clear 10-in-1 Facial Foam + Scrub which claims to fight oil and acne problems while whitening the skin. Both o f these brands are being endorsed by teen star Julia Barreto The company is also at the forefront of launching notable campaigns in beauty and p ersonal care. Unilever Philippines Inc organised its annual Rexona Run, which included performances by live bands strategically located along the race routes. For the launch of Dove L otion in the Philippines, the multinational informed consumers of the “Power of a Hug”, which formed an online hugging movement, encouraging consumers to hug their loved ones as a means of deepening interpersonal relationships.

Production 

Unilever Philippines Inc has manufacturing facilities in Cavite, a province located so uth of Manila. While the production plant produces almost all packaged food products for the local market, its beauty and personal care brands are manufactured abroad.


Unilever Philippines Inc is the largest manufacturer of beauty and personal care products in the Philippines. The multinational accounted for 22% of retail value sales in beauty and


15


Passport

personal care in 2013 owing to its leadership in various categories includ ing deodorants, hair care, and skin care. The company‟s longstanding presence in the country allowed it to establish a wide base of loyal buyers nationwide. Unilever Philippines Inc also benefits from its aggressive advertising campaigns that ensure top-of-mind recall for its brands and establish good brand images. 







Compared to 2012, the multinational‟s share improved slightly in 2013. Unilever‟s sales were driven by its product promotions conducted both in traditional and social media. The company‟s efforts to make its brands and p roducts relevant to consumers through the employment of the latest technology, which enhanced its positioning, and the addition of more product benefits allowed it to expand its customer base and compete more efficiently with both local and international players. The company has a wide product portfolio and operates across categories including bath and shower, colour cosmetics, deodorants, hair care, men‟s grooming, oral care, and skin care. Among these, men‟s grooming, sun care, colour cosmetics, and men‟s grooming experienced rapid growth. These are balanced by l arger, more stable markets including hair care, skin care, oral care, and bath and shower. Unilever Philippines Inc‟s retail value sales in beauty and personal care increased by 6% in 2013, faster than the industry average of 3%. The multinational‟s products appeal to consumers at all income levels. The company offers economy, mid-range, and masstige products at various price points. This allows Unilever Philippines Inc to cater to different consumer needs. Furthermore, the company also utilises different packaging to make the products affordable to buyers. For instance, its Pond‟s facial moisturiser is available in a 25g bottle and a 5g sachet. Sachet packaging enables products to be distributed in small traditional neighbourhood stores and reach price-sensitive consumers. Unilever Philippines Inc maintains its market leadership through continuous innovation. It should be noted that development of new products through the employment of state-of-the-art technology is essential to the survival of players. The multinational is keen to expand its range with products that offer new benefits. Innovation is also its means of differentiating itself from the competition and cementing its strong brand image in the local market.

Summary 13

Unilever Philippines Inc: Competitive Position 2013

Product type

Value share

Rank


21.50%

1

Bath and shower

3.40%

6

Colour cosmetics

0.90%

16

Deodorants

39.80%

1

Hair care

44.50%

1

Men‟s grooming

29.30%

1

Oral care

15.30%

2

Skin care

28.90%

1

Source:


COMPETITIVE LANDSCAPE 

Multinational Johnson & Johnson Philippines Inc remains the undisputed market leader in baby and child-specific products. The company‟s brand Johnson‟s Baby is synonymous with


16


baby and child-specific products, which are dermatologically tested mild and hypoallergenic products. The multinational‟s success is supported by its aggressive advertising campaigns through television, print, radio and online channels. During 2013, the company accounted for 53% of retail value sales. 







International brands are dominant in b aby and child-specific products. Direct seller Tupperware Brands Philippines Inc ranked second in 2013 with 9% of retail value sales. Its competitor Avon Cosmetics Inc ranked seventh with a 2% share. Rogemson Co Inc and Green Cross Inc, both of which are significant players in baby and child-specific toiletries, are the largest domestic players and together accounted for 13% of retail value sales in 2013. Baby Spa was the fastest growing brand in baby and child-specific products in 2013, with current retail value growth of 134%, and continued to absorb the remaining sales of HBC Inc‟s Vitasoft brand. It should be noted that Baby Spa is a spin-off of the Vitasoft Baby brand which was discontinued in 2011 by HBC Inc. Similarly, Tupperware‟s Baby Care Plus brand‟s sales also robustly improved, by 69%, as it absorbed sales from its previous brand Zwitsal. The direct seller was also aggressive in pushing its brand t hrough its “celebrity mom” endorser Dimples Romana. Filipino consumers warmly received group buying sites and the daily deals that these online spaces offer. Some baby and child-specific products also tried pushing their products by offering online deals through group buying sites. Johnson‟s Baby teamed up with Ensogo Philippines for its Johnson‟s Baby Two-Week Sale on Baby Products, which slashed prices by as much as 50% for its skin care, b ath and shower, and sun care products. Bambini Cologne also offered product discounts through Ensogo in 2013. Private labels are not yet existent. Even thoug h economy brands are present and Filipino consumers are still largely price conscious, standard products are the most popular. Filipino parents are more inclined to purchase leading a nd reputable brands. Because these products are used for babies, Filipinos think that more popular products offer better protection and are more suitable for a baby‟s skin. Consumers are often cautious in trying out new brands and prefer familiar products.






Procter & Gamble is the largest manufacturer of bath and shower products in the Philippines. Its brands Safeguard, Zest and Ivory together accounted for 37% of retail value sales in bath and shower in 2013. Present in the market for around 70 years, Safeguard is a trusted name in the local market and has loyal followers. The company continues to invest in aggressive advertising campaigns to maintain top-of-mind recall and product innovation that suits consumer lifestyles. The company‟s brands have different packaging to appeal to all income demographics. Other important players in bath and shower include Splash Corp, Johnson & Johnson, Colgate-Palmolive and Unilever. These players cater to different market segments according to the primary benefit that they offer. Filipino-owned Splash Corp specialises in whitening bar soaps with brands including SkinWhite, Biolink and Extract. Meanwhile, Johnson & Johnson‟s brand Johnson‟s Body Care and Unilever‟s Dove offer moisturising and hydration. ColgatePalmolive offers bar soaps with different benefits but all are made from n atural ingredients. Suyen Corp experienced the fastest growth in 2013 experiencing a 14% value growth. This was due to their stronger distribution through hypermarkets and supermarkets. They also continued to expand their number of outlets throughout the nation. In addition, the group continued to market its Bench brand aggressively in 2013.


Passport

17






Manufacturers continued to harness the power of the internet to engage with customers through different promotional campaigns. While TV, print and radio are primarily utilised for these purposes, social media are increasingly complementing traditional media. Leading brands such as Safeguard, SkinWhite, Dove, Palmolive and Lactacyd all have their own Facebook pages where they post messages to their customers on a daily basis. These pages also help them interact with and respond directly to customers. Social networking sites are increasingly becoming important touch points and companies‟ presence on these sites allow them to launch exclusive campaigns and employ more targeted marketing approaches. In 2013, Lactacyd Philippines launched its new Facebook game application called Revitalize Girl Game. By accumulating points in the online ga me, customers have the chance to win prizes including an iPad Mini, iPad, iPod Nano and g ift certificates from Zara and Forever 21. Another common use of Facebook pages is the launch of online contests where customers are invited to post their pictures with the products. SkinWhite, Dove and Palmolive are trying to engage customers further by asking for testimonials about how the products benefit them. Palmolive takes this a step further by choosing new commercial models through its Facebook page.










Direct selling giant Avon Cosmetics Inc led colour cosmetics in 2013 with retail value share of 38%. Avon has customers at all income levels through its wide range of colour cosmetics brands that span facial make-up, lip products and eye make-up. The company‟s success is also attributable to its wide network of direct selling agents that ensures nationwide distribution of products. Avon also allows customers to pay by instalment, which is more convenient for lower- and middle-income consumers. The company‟s investment in advertising campaigns featuring high profile celebrities and product innovation also strongly supports its market leadership. Cosnova GmbH experienced the fastest growth at 191% in 2013. Its retail value sales increased as consumers were attracted by its new product offerings. Unilever Philippines Inc‟s shares in colour cosmetics also improved in 2013 due to the launch of its new Pond‟s BB+ Cream, which achieved a promising performance during its first year. Ever Bilena Cosmetics Inc and HBC Inc are the largest local players in the category. Ever Bilena Cosmetics Inc ranked second with a retail value share of 22% in 2013. The company appeals to more price conscious consumers, especially students and provincial buyers. HBC Inc, on the other hand, distributes through its chain of beauty specialist retailers – Home of Beauty Exclusives and HBC Shop More. HBC Inc was aggressive in product promotion in 2013, which helped bolster sales. Players continue to tap into the influence of the internet and social media in their product promotions. Brands continue to send free products to bloggers for review and conduct exclusive blogger events. Most women consult online reviews of colour cosmetics products before purchases. Beauty bloggers conduct reviews and often demonstrate new products. In a category where tri-media advertising is not often used, social media and the internet help generate consumer awareness. Both local and imported products entered the market in 2013. Premium US colour cosmetics brand NYX opened four stores during the year. BYS, an Australian brand, was also introduced and products are retailed i n SM Department Stores. Another entrant was Happy Skin, which promises to care for Filipino skin through special skin care ingredients such as Japanese tea leaf, cherry blossom and argan oil, among others. This new product tries to overcome the apprehension of Filipinos in using colour cosmetic products. One of the most


Passport

18


cited reasons why Filipinos do not use colour cosmetics is the notion that these products can harm the skin. Happy Skin boasts of being d eveloped from Japanese technology.












Unilever Philippines Inc, the maker of Rexona, Block and White, Dove and Axe is the largest player in the local deodorants market, with a retail value share of 40% in 2013. The company benefits from its relatively wide range of products that appeal to diff erent consumer segments. Its largest brand Rexona accounted for 23% of retail value sales in deodorants in 2013 and has a strong foothold in deodorant creams and deodorant roll-ons. Axe remained the biggest brand in deodorant sprays with 25% of retail value sales in 2013. The company‟s strength is solidified through its aggressive promotional campaigns, smaller and sachet packaging to make the products affordable, and investment in product innovations. Beiersdorf AG continued its attempts to strengthen its position in deodorants. The company continued to launch new products and i nvest in aggressive advertising to expand its customer base. During 2013, the company accounted for 12% of retail value sales, up 7% in current terms on the previous year. International brands from Unilever, Avon, Beiersdorf AG and Procter & Gamble led the category, with a combined retail value share of 85% in 2013. These companies successfully built consumer loyalty through their claims of better quality i n terms of protection, added benefits, packaging and others. Domestic companies compete in smaller categories. Ever Bilena Cosmetics Inc as well as local companies Suyen Corp and Golden ABC Inc compete in only one category – deodorant sprays. It should be noted that local brands Pinkwater, Blackwater, Bench and Penshoppe differentiate themselves through their scents. These local brands compete with mass fragrances. Leading brand Rexona conducted its fourth annual Rexona Run in 2013 and made it more exciting by commissioning popular local bands that performed on the race routes. Dubbed as the first ever multi-sensorial music run, runners were treated to musical performances as they finished the race. The Rexona Run in 2013 was perceived not just as a race but as a street party and attracted around 12,000 runners. Premium products accounted for 1% of total retail value sales in deodorants in 2013. Filipino consumers are more familiar with mass brands and their competitive pricing strategies appeal to most buyers. Premium products‟ distribution is limited and most products are imported and command huge margins. Only a few affluent buyers are able to purchase premium products.




Depilatories remained one of the smallest categories in beauty and personal care, with retail value sales of Ps204 million in 2013. The category increased by 6% in current retail value terms, buoyed by Filipinos‟ growing awareness of new brands and products. Shaving remains the most popular way of removing body hair. Razors and blades are preferred because they are more affordable and products are available in both traditional and modern grocery retailers. Even though shaving is more popular, Filipinos are also considering other ways of depilating. Retail value growth in hair removers/bleaches exceeded that in razors and blades in 2013, reflecting Filipinos‟ better awareness of these products. Hair removers/bleaches accounted for 61% of retail value sales in depilatories and increased by 7% in current terms in 2013. Social media and internet technology were beneficial in educating consumers on product usage.


Passport

19


Online communities which discuss beauty products and be auty bloggers who write p roduct reviews largely contributed to the growing usage of these products among middle-income urban women. On the other hand, the expansion of health and beauty retailers such as Mercury Drug and Watsons in provincial areas aided the distribution of these products in more cities. 











In terms of women‟s razors and blades by type, systems - refill blades continued to account for the greatest share of retail value sales. Middle-income buyers often buy systems - razors once and replace the bl ades by purchasing refills. This is viewed to be more economical. Also, systems are often perceived to be more efficient because of their usage of new technology that removes hair more gently and thoroughly. Disposables accounted for 26% of retail value sales in 2013, but because of their relatively lower price are expected to contribute more to volume sales. Disposables are preferred by lower-income consumers who often buy these supplies from sari-sari stores. Procter & Gamble Philippines Inc remained the leader in depilatories in 2013 and also led women‟s razors and blades where it accounted for 92% of retail value sales. Its brand Gillette benefits from its wide array of products at different price points and appeals to all income segments. Gillette is retailed not just in modern retailers but in traditional distribution channels, which makes its products highly accessible. Reckitt-Benckiser Philippines Inc, the maker of Veet, ranked third with 22% of retail value sales and growth of 7% in current terms in 2013. Veet made headway in h air removers/bleaches through its marketing campaigns. During the year, Reckitt-Benckiser Philippines Inc launched its search for the first My Veet Girl, which included screening hopefuls and only voting through its Facebook page. The winner was awarded Ps50,000, one year‟s supply of Veet, and a chance to represent Veet in Meg Magazine‟s reality TV show, I am Meg. Increasing awareness of other product formats through the aggressive marketing campaigns of leading brands will help in boost demand for depilatories. Depilatories is expected to register a retail value CAGR of 3% at constant 2013 prices over the forecast period to reach Ps238 million in 2018. Depilatories is still a small market with good potential. Hair removers/bleaches will continue to surpass the performance of razors and blades. The expected opening of more shopping malls, department stores and modern grocery retailers can help in the distribution of hair removers/bleaches in cities outside Metro Manila. Also, Veet‟s online advertising campaign can further boost its sales to young adults. Hair removers/bleaches is expected to register a retail value CAGR of 4% at constant 2013 prices over the forecast period. The growth of depilatories can be hindered by the prominence of group buying sites like cashcashpinoy, Metro Deal, and Ensogo that team up with beauty salons to offer discounted hair removal services. These online sites continue to generate good demand from urban buyers who are attracted by the heavily discounted offers. Hair removal services in beauty salons offer more convenience to customers and are popular among more affluent buyers.


Direct seller Avon Cosmetics Inc remained the leader in fragrances, with 40% of retail value sales in 2013. The company‟s leadership is attributable to its wide range of products that appeal to both men and women. Avon‟s distribution via direct selling enables it to reach a wide customer base through its network of agents located in urban areas and far -flung municipalities. The company also offers i nstalment payment schemes, which make its products appealing to lower- and middle-income buyers.


Passport

20










Direct seller Tupperware Brands Philippines Inc ranked second with 8% of retail value sales in 2013. Compared to the market leader, Tupperware Brands Philippines Inc has a smaller customer base and smaller network of distributors. Other important players include manufacturers of premium products including Estée Lauder Cos Inc, Davidoff Parfums, and Lacoste SA. Premium fragrances accounted for 38% of retail value sales in the category, most of which are from multinationals. The share of domestic players in fragrances is relatively small. Suyen Corp, the largest local player, accounted for 3% of retail value sales in 2013. Other domestic players accounted for insignificant shares. Most local entities compete through lower pricing. Smaller brands such as Afficionado offers customers low-priced fragrances which a re inspired by premium scents. These products are popular among aspirational price-conscious buyers. Gianni Versace SpA experienced the one of the fastest growth in fragrances in 2013 at 11%. The company managed to recover after a poor performance in 2012. Due to rising income levels and the continued strong economic performance, more consumers were able to trade up to premium brands. In mass fragrances, LG Household & Health Care Ltd, the owner of The Face Shop brand, reports the most vibrant performance in 2013. Korean brands have a good following among Filipino consumers due to the strong i nfluence of media such as television and the internet. Aside from Korean skin care products, Filipinos are also buying Korean scents from The Face Shop beauty specialist retailers. The Face Shop continues to ope n stores all over the country, which is extending its reach and widening its customer base.








Multinational Unilever Philippines Inc maintained its market leadership in hair care i n 2013, with current retail value sales up 7% and a category share of 45%. It s biggest brand in the Philippines is Cream Silk, which accounted for 75% of retail value sales in conditioners. Meanwhile, its brand Sunsilk remained the leader in standard shampoos. Its other products include its family shampoo brand Vaseline and anti -dandruff shampoo Clear. Unilever Philippines Inc capitalises on its wide portfolio of strong brands established through aggressive marketing campaigns and product innovation. Procter & Gamble Philippines Inc ranked second with 23% of retail value sales in 2013. Like the market leader, the company also has a wide product portfolio of brands positioned for different consumer segments. The company‟s top three brands in 2013 were Pantene, Head & Shoulders and Rejoice. Colgate-Palmolive Philippines Inc‟s Palmolive is the biggest player in 2-in-1 products and accounted for 12% of retail value sales in hair care in 2013. Multinational companies dominate hair care, mostly because their brands have established strong equity in the l ocal market. These top three foreign players together accounted for 80% of retail value sales in hair care in 2013. Domestic players do not compete head-on with multinationals but instead operate in smaller hair care categories. The largest local player Splash Corp competes in led colourants in 2013. Other companies such as Manila Swallow Corp offer styling agent products. It should be noted that local brands often have competitive pricing schemes to appeal to local buyers. Hair care welcomed the entry of new brands and the return of former players. In 2013, Peerless Lion Corp introduced Shokubutsu Hana in standard shampoo and conditioners. Positioned as a product with natural ingredients, the brand is heavily advertised and trial purchases encouraged. The year also marked the return of Vidal Sasoon which offers two product lines – base care for normal hair and colour care for coloured hair. The brand has a


Passport

21


wide range of products including shampoos, conditioners, hair treatment, and magic style activator. 

Market leader Unilever Philippines Inc launched a promotional campaign called Great Hair Day Blowout to boost sales of i ts brand Dove, Clear, Sunsilk and Vaseline. For every purchase of these products, customers were eligible to win special prizes and discounts to salons and retailers, which were printed on specially marked sachets and bottles. Prizes included an expenses-paid trip to an international destination, a Ford Fiesta, a Samsung Galaxy Tab, and National Bookstore and David Salon discounts.










Unilever Philippines Inc remained the largest player in men‟s grooming in 2013. The company accounted for 29% of retail value sales in men‟s grooming, due to its Axe brand in men‟s deodorants and Master by Eskinol in men‟s skin care. Other important players in men‟s grooming include other multinationals such as Proctor & Gamble (22%) Beiersdorf AG (10%) and Avon Cosmetics Inc (9%). Local players make only a small portion to men‟s grooming. In 2013, most domestic brands competed in deodorant sprays. Multinationals benefit from consumers‟ strong awareness of and loyalty to their b rands. Brands such as Gillette, Axe, Avon and Nivea Men are trusted names in men‟s grooming. In a bid to make headway in men‟s toiletries, Unilever launched its Manifesto website. Dubbed “the Gentleman‟s Guide to Manliness” this online community focuses on educating men on how to be the best that they can be not just in caring for themselves, grooming, but also in sports, technology, culture, women and money. This new website caters to “first- jobbers” or men aged 18-20 who are tech-savvy and mostly find relevant information online. The company also launched events to engage buyers, such as the Vaseline Men XTERRA Mud Run, which attracted 2,000 participants. It should be noted that this event captures men‟s innate passion for sports activities. Another Vaseline Men promo is “Be The Man Win the Car”. Consumers are encouraged to buy specially marked packs of Vaseline Men skin care products, scratch the sticker on the pack, and text the promotional code. They are then eligible to win a Toyota 86 Limited Edition. Price is among the most important considerations in men‟s grooming purchase decisions. Filipino consumers tend to favour competitively priced products while sticking to more popular brands. Thus, mass brands dominate in the local market. Premium products are available in men‟s skin care but this category remains very small and often appeals to more affluent middle-aged male who can afford these products.




Colgate-Palmolive Philippines Inc is the undisputed leader in oral care. During 2013, it accounted for 47% of retail value sales. Its brand Colgate leads in l arge categories including toothpaste and manual toothbrushes. The company accounted for 52% of retail value sales in toothbrushes and 49% in toothpaste in 2013. In the Philippines, Colgate is a household name which is synonymous with oral care. Unilever Philippines Inc ranked second with 15% of retail value sales in 2013. The company manufactures Close-Up toothpaste, which is positioned for fresh breath, and Pepsodent, which offers a range of competitively priced toothpastes. Oral-B Laboratories Philippines Inc, which has strong sales in toothbrushes, ranked third in 2013 with 14% of retail value sales. Multinational companies dominate oral care – the three largest foreign companies together


Passport

22


accounted for 76% of retail value sales. Multinational companies have a pool of loyal customers through their investment in advertising, promotional activities, and research and development. 







Lamoiyan Philippines Inc, the maker of Happee, is the only local player with a significant share of retail value sales i n oral care. The company‟s brands appeal to more price conscious local buyers. Most of the company‟s sales come from sachets, which are retailed in small sarisari stores. Lamoiyan accounted for 10% of retail value sales in 2013. Despite its still small share in oral care, United Laboratories Inc registered current retail value growth of 10% in 2013, driven by robust sales of Swish mouthwash. United Laboratories Inc focused on mouthwash flavour innovation and introduced a new breath spray in 2013. In 2013, Colgate-Palmolive Philippines Inc enhanced its distribution by being available in SM Hypermarkets, SM Supermarkets and SaveMore. It should be noted that the company‟s brands were not retailed through modern grocery channels for a few years. This helped bolster the sales trend of Colgate in 2013. Price is an important consideration among Filipino consumers in the purchase of oral care products. Most consumers buy standard products which are often retailed in smaller sachets. Sachet packaging makes products affordable to consumers, especially in toothpaste. The high price of power toothbrushes hinders sales growth. Filipinos stick to a basic oral care regimen of brushing teeth and most consumers consider oral care products apart from toothbrushes and toothpaste unnecessary.










Unilever Philippines Inc maintained its market leadership in skin care with 29% o f retail value sales in 2013. Its portfolio of strong brands includes Pond‟s, Olay, Dove and Vaseline. Unilever Philippines Inc continued to capitalise on its strong financial muscle that enables i t to invest in advertising campaigns that feature high-profile celebrities, and research and development that harness the power of state-of-the-art technology for its products. The company continued to enhance its product line with exciting and more efficient products which are endorsed by popular celebrities. Avon Cosmetics Inc ranked second thanks to its top selling brands Avon Skin So Soft, Avon Naturals and Avon Lotion. While Unilever Philippines Inc leads in facial care, Avon Cosmetics Inc‟s success is derived from its strong position in body care. The company led the Ps11.5 billion general purpose body care market where it accounted for 25% of total retail sales in 2013. The direct seller‟s brands are p referred by lower - and middle-income consumers in the provincial areas who appreciate the flexible payment scheme that it offers. Multinationals contribute a greater proportion of skin care sales than their domestic counterparts. Among all domestic players, only Splash Corp has a sig nificant retail value share. Splash Corp is the manufacturer of Skin White, Maxi-Peel, Extract, Biolink, and Extraderm, all of which are positioned as whitening products. Splash Corp‟s competitive edge is its lower pricing strategy that appeals to price-sensitive buyers. The company introduced a reformulation of its SkinWhite line in 2013 and enhanced its distribution to improve its presence in traditional grocery channels. These strategies helped bolster its sales. Beiersdorf AG took a step further in improving the whitening efficacy of its product. The company introduced the first-ever whitening body serum in the Philippines. Nivea UV Whitening Serum is infused with 95% Vitamin C purity for whiter skin and SPF 25 PA++ for sun protection. Whitening continued to evolve in order to suit the preference of the local market. Filipinos are known to seek a fairer complexion but recent studies show that buyers are not satisfied with


Passport

23


pale white skin but are looking for a rosy white glow. In 2013, Pond‟s, the market leader in skin care, launched another whitening innovation which promises not just rosy white skin but translucent, reminiscent of Korean pop star, skin. Pond‟s newest product line is formulated with saffron and Korean ginseng to give that flawless white, rosy, and translucent skin. Premium brand Clarins also launched its White Plus Total Luminescent line, which promises not just whitening and spot correcting but a rosy white glow of healthier skin. 

Skin care manufacturers are harnessing the power of technology to gain brand awareness, directly interact with and strengthen relationships with buyers. Online campaigns and presence in social media complement the traditional tri-media ad vertising strategies of players. It should be noted that even though companies promote products via radio and television, they often refer to their Facebook, YouTube and Twitter pages. The internet is emerging as an important touch point that allows players to deliver holistic marketing campaigns. The use of beauty bloggers for pro duct reviews, the organisation of blogger events and exclusive Facebook contests were prominent in 2013.








Beiersdorf AG is the largest manufacturer of sun care products in the Philippines in 2013. Its brand Nivea has one of the widest ranges of sun care products in the Philippines, comprising of variants in different formats for both face and body. Beiersdorf AG also continued to commit itself to improving its product line through the formulation of products with more added value and suited to consumer needs. Aside from these, the company is also aggressive in terms of advertising. It teamed up with the Department of Tourism to boost awareness of its products among tourists. Imported brands have greater appeal as they are perceived to have better quality. Investment in advertising and research and development is a key factor in establishing a strong brand name, which is better accomplished by large multinationals. Manufacturers are keen to use internet technology to boost awareness of their brands and generate better demand. Market leader Beiersdorf AG continues to tap beauty bloggers in the promotion of its sun care products. For the release of its new Nivea Sun Protect & Refresh, the company offered an all-expenses paid trip to Palawan to bloggers attending its events. The company also continues to communicate to its customers through its Facebook page. Meanwhile, Banana Boat takes advantage of the popularity of online group buying sites and offers discounts on its products at Ensogo.ph. The sale of premium sun care brands is still insignificant. Premium brands‟ availability and distribution is often limited. Mass brands are more affordable and are retailed through a wider distribution network. Private labels are still unavailable.




In 2013, sets/kits experienced a spike in growth at 41% due to the strong marketing efforts of direct sellers such as Avon Cosmetics, Nu Skin Enterprises and UHS Essential Health. Due to the strong economic growth experienced during the year, consumers were able to purchase items in sets/kits instead of the usual sachet packaging. Manufacturers often use sets/kits as promotional and limited-edition items. One important way of convincing consumers to buy particular sets/kits is the cost saving associated by purchasing the whole set instead of b uying products individually. This is especially true for mass brands where the target consumers are often price sensitive. Aside from boosting sales,


Passport

24


offering sets/kits allows manufacturers to encourage consumers to try items in the product line which are marketed to have better results. This is especially true for skin care products. 













Fragrances sets are more popular in premium fragrances than in mass fragrances. Fragrances sets are often limited edition and gender specific. Meanwhile, bath and shower sets, hair care sets, and make-up kits/sets are dominated by mass brands. Frequently, manufacturers of mass brands will offer gift/sets with packaging that informs consumers of the discount associated with the purchase. Thus, most sets/kits are often priced lower compared to individual products. Trial packs and starter kits are more popular in skin care, where manufacturers try to market their whole product line. Trial packs often include smaller packages than regular ones. In colour cosmetics, make-up kits which include lip products, eye make-up and facial make-up in one box are gaining popularity, especially among first-time make-up users such as teens and students. These products are retailed as low as Ps100 and appeal to price-sensitive consumers. Avon Cosmetics Inc is the largest sets/kits manufacturer in the Philippines. The company shares 42% to total category sales in 2013. The company‟s capitalises on wide range of brand in beauty and personal care and its leadership in numerous categories. Nu Skin Philippines Inc, ranked second with 9% of retail value sales, mostly derived from its skin care line. It should be noted that Nu Skin‟s skin care lines are often purchased in sets/kits to guarantee best results. Domestic players, which often compete on price, have little influence on sets/kits. The only local player with a significant share is Ever Bilena Cosmetics Inc, which offers cheap make-up kits. Most local players offer their products in smaller p ackages, making them affordable and attractive to lower- and middle-income buyers. L'Oréal Philippines Inc introduced a skin care set/kit in 2013 called the L'Oréal Paris Revitalift Laser X3 Set, which claimed to prevent the signs of ageing through its wri nkle corrector, neocollagen stimulator and tissue re-tightening agent. In order to make the product more appealing, it offered a 25% discount during the third quarter. Sets/kits is expected to register a CAGR of 2% at constant 2013 prices over the forecast period. The availability of and consumers‟ preference for more affordable sachet packaging could hinder growth in sets/kits. Demand will continue to be limited to midd le-income consumers who are more concerned about the cost savings from buying in larger quantities instead of buying them individually. With the expected increase in disposable income in the Philippines due to the more vibrant economic landscape, manufacturers can work on augmenting demand for sets/kits by emphasising the savings attained through the purchase of more products. It should be noted that some middle-income Filipinos are starting to recognise the cost savings associated with bulk purchases. Meanwhile, sets/kits of products in sachets can also be pushed by companies in order to ensure consumers‟ loyalty to the entire product l ine.


Passport

25

Beauty and Personal Care in PH Euromonitor Oct2014.pdf

Recommend Documents