At a supermarket, you have to decide between Brand X and Brand Y. The price is the same, but Brand Y is 10 grams heavier than Brand X. Which brand will you choose?
Data, insights and consulting company Kantar says the Filipino consumer will pick the brand that gives value for money.
Value for money leads the list of consumer trends that manufacturers of fast-moving consumer goods (FMCG) should watch out for in 2022 if they want to accelerate their recovery from pandemic slump, says Lourdes Deocareza-Lozano, New Business director at the Worldpanel Division of Kantar Philippines.
Another trend that Kantar observed is that more Filipino consumers have been buying their necessities from sari-sari stores (neighborhood stores) following the lockdowns that restricted mobility.
Other factors that will determine which products will go into the Filipino consumer’s shopping basket are e-commerce, the gradual resumption of face-to-face classes, and environmental concerns.
“FMCG companies must be able to assess and understand the changing behaviors of Filipinos in order to attract them to choose their products and buy it as frequently as possible,” Deocareza-Lozano said.
Here are the trends that will affect the FMCG market:
Value for Money
With more than half of the 156 categories monitored by Kantar raising their prices by more than 5% in the last two years, shoppers will continue to switch to brands that offer them greater value.
This search for such products that offer their money’s worth, especially among the lower socio-economic classes, will continue and brands that are able to address this need can join the ranks of other growing and fast rising value brands.
New Channel Missions
Mobility restrictions over the past two years have resulted to less shopping trips, which translates to less opportunities for products to make their way into the shopping baskets of Filipinos. Shoppers have also adjusted where they shop, and have returned to more traditional channels such as sari-sari stores.
Laurice Obana, Shopper and Consumer Insight director for Kantar, believes that with the return to neighborhood stalls, brands that can get themselves into the limited shelf space will be the ones who stand to gain the most.
The number of Filipinos who shop online will continue to grow, with the personal care category currently dominating the online shopping basket. With only 8% of Filipino homes shopping online, there is a huge opportunity for brands to leverage this platform. Obana, however, said the e-commerce category will truly take off when Filipino shoppers turn to online channels to purchase their food and beverage needs.
Return To School
The Department of Education is starting to prepare public schools in areas with the lowest alert level and a significant decrease in active COVID-19 cases for face-to-face classes.
The FMCG categories that are likely to grow are categories that will support this new lifestyle. This include those that will keep children safe and fresh (sanitizers, baby powder and colognes), while also ensuring that they have nutritious lunchboxes and are properly hydrated while in school.
Moreover, households may see an increase in demand for laundry detergents with more instances for children to change outfits.
In 2022, sustainability will be more critical than ever.
Ledz Lim, Kantar Expert Solutions director, said 82% of shoppers declared that they are personally affected by environmental problems, while 68% admitted to not buying certain products which they feel greatly impact the environment and society.
Moreover, Filipino shoppers believe that various stakeholders, including FMCG companies, have a bigger role in taking action and pursuing a more sustainable path.
Craft your strategy based on these trends
Kantar said FMCG companies must look at these five shopping trends when developing marketing strategies that can further expand their reach to Filipino shoppers.
“It is equally important to be agile in these ever-changing times. We can only do so if we continuously monitor how our shoppers are behaving," Deocareza-Lozano said.
"Having the right insights and tools will allow our FMCG brands to plan and simulate scenarios for their growth. With that in mind, we will be able to capture and optimize this momentum of recovery happening before us,” she added. (Marites Villamor-Ilano/Ventures Cebu)