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    Russian Update

    Retail Chains May Provide Competition to Personal Care Manufacturers

    ...

    Retail Chains May Provide Competition to Personal Care Manufacturers
    Related CONTENT
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    Eugene Gerden, Russia Correspondent10.08.18
    Global producers of nonwoven-based personal care products may face serious competition from retailers during the next several years, due to retailers’ plans to significantly increase their private label product offerings, according to predictions of analysts from the Russian Association of Non-Wovens Producers, (a public and research association, which unites the Russia leading nonwovens producers).

    This trend is expected to be particularly strong in emerging nations, however it will also affect the EU and other developed nations in due course. In these emerging nations, in recent years, local consumers (and in particular those from China, India and Russia) have started to pay more attention to the price of products, showing a preference for cheaper goods. That became mainly due to the ongoing financial uncertainty in those countries, caused by the decline of global oil prices, devaluation of their currencies and other factors.

    This, in turn, has resulted in the decline of demand for branded products and the change of the balance of market supply and demand.

    Starting from the second half of this year, in emerging markets like China and Russia, the balance  of nonwoven-based personal care products will change, in favor of supply, which will continue to grow and will have a negative impact on the margins of global majors, forcing them to revise their strategies of further development in local markets.

    The ever weakening positions of global majors may force them to cut prices for their local range in order to remain competitive amid the current market conditions.

    To date, the expansion of retailers in the segments of nonwovens products, which, to date, have been uncommon for them, has already started.

    For example, the Russia X5 Retail Group, one of the country’s largest retail groups, has recently announced its plans to expand in the segment of sanitary and hygienic products by establishing its own production of a wide range of personal care products. The company hopes that its future range will be competitive with the production of global majors such as Procter & Gamble, Kimberly-Clark and some others, which have traditionally dominated in Russia.

    It is planned that in the future a range of retailers will include such products as feminine hygiene products, disposable diapers and some others. Analysts expect that such a move of retailers may provide tough competition to well-known brands, which is also due to the plans of retailers to position their products for the middle and low-priced segments of the market, which may attract additional interest from consumers.

    Practically the same situation is currently observed in China, where, due to the devaluation of the local currency, prices for the products of global majors have significantly increased, which provided an impetus for the increase of domestic production, including by retailers.

    Overall, according to the Russian Association of Non-Wovens Producers predictions, the positions of global majors will continue to be weakened in the majority of emerging markets, while much will depend on their ability to adapt to the current market conditions.
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    • Eastern Europe/Russia | Western Europe
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    • Chinese Nonwovens Industry Aims for Massive Export Growth This Year

      Stagnant economy, lower yuan value have led producers to look outside of China for growth.
      Eugene Gerden 04.05.19

    • Kimberly-Clark, P&G Announce Expansion of Russian Business

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    • German Nonwovens Industry on Verge of Steady Growth

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    • Eastern Europe/Russia

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      Russian Nonwovens Industry May Reach Historical Highs This Year

      Russian Nonwovens Industry May Reach Historical Highs This Year

      The nonwovens industry in the country has grown 35% thus far in 2017.
      Eugene Gerden 10.09.17

    • Diaper, Baby | Eastern Europe/Russia

      Leading Diaper Makers Make Appeal to Russian Government

      Producers call on officials to ease conditions for doing business in Russia.
      Eugene Gerden 03.27.17


    • Russian Diaper Market Recovers From Crisis

      Low saturation, increasing consumer demand should drive growth.
      Eugene Gerden, Russia Correspondent 12.01.16

    • China Eyes Massive Expansion in Russian Nonwovens Industry

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    • Feminine Hygiene | Western Europe

      Global Nonwovens Majors May Bear Significant Losses in Russia

      Government initiatives likely to influence establishment of local diaper makers.
      Eugene Gerden, contributing editor 04.12.16


    • Construction | Wipes

      Belarus May Become Center of Nonwovens Production in Eastern Europe

      Private, public efforts should lead to rapid increases in nonwovens production over the next five years.
      Eugene Gerden, contributing editor 03.16.16

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