Economics

Global Kitchen Towels: Opportunities and Barriers for Broader Sales

Kitchen towels remain a product for developed markets. Low incomes, a lack of product awareness and inadequate distribution channels are among the key barriers to growth in developing countries. However, rising incomes and the westernisation of consumption culture, particularly in Eastern Europe and Latin America, reveal potential and are attracting multinationals as well as local tissue manufacturers into the category.

Strong developed markets bias

In 2013, a substantial 86% of total retail volume sales of kitchen towels were generated by developed markets, with low incomes the chief reason for growth in the category being hampered across the developing world.

North America leads consumption

Per household consumption is particularly high in the US. Consumers appreciate the convenient nature of so-called “paper towels” and frequently use them for a wide range of tasks around the home, often as a replacement for traditional cloths.

Little presence in Asia Pacific

Despite rapid income growth, kitchen towels are still a relatively undeveloped category in Asia Pacific. Even in high income countries, such as Japan and Singapore, kitchen towel consumption remains low, often due to a lack of product awareness and limited marketing activities by manufacturers.

Commoditisation

Private label accounts for as much as 80% of value sales in some Western European markets. Brand loyalty tends to be low, as consumers see kitchen towels as a commodity and therefore typically opt for the cheapest product available, more often than not private label.

De-commoditisation

In order to keep value sales buoyant in mature or saturated markets, manufacturers are investing in innovation – despite generally being a category where the scope for innovation would appear to be limited – encouraging consumers to trade up.

Retailers play a crucial role

Western retailers are expanding in developing regions and with them their business model. Since kitchen towels comes in a rather bulky format, the category benefits from an increasing number of supermarkets and hypermarkets which can allocate more shelf space than traditional grocers. Customers have greater product choice, and private label options make the product affordable to lower income consumers. 

Source: Euromonitor

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