Colgate and P&G head for the emerging markets, reports find

By Simon Pitman

- Last updated on GMT

Related tags Research Developed country Economic growth

The recession has served to emphasize both Procter & Gamble’s and Colgate-Palmolive’s ambitions to target emerging markets for future growth, latest financial reports find.

Although the personal care market was once considered to be recession proof, some of the biggest players in the industry were seriously impacted by the recent recession as consumers became increasingly price sensitive, particularly in the more developed markets.

This meant that many players targeting the ‘masstige’ market, amongst them both P&G and Colgate, were hard hit by consumers trading down to cheaper products that they felt represented better value for money.

Trading down hits hard

This trade down has meant these particular companies and other big players in the personal market, have been faced with market stagnation in the more developed markets of Europe and North America, a phenomenon that is the focus of latest financial reports from Wall Street Equity Research (​).

Although the big players have responded to the situation with significant discounting and loyalty programs, many of these initiatives are likely to have a temporary effect that cannot disguise the underlying situation in the developed markets, while also serving to dent profits.

Wall Street Equity Research’s latest market reports emphasize how both companies are likely to turn to emerging markets as a source of future growth revenue in light of this situation.

“The ongoing economic challenges are bringing companies out of their usual business comfort zones as they move to new locations,”​ the research company says.

China and India firmly on the radar

The company’s latest reports draw particular attention to the potential of the China and India markets, stressing that rapid economic growth, increasing consumer spending power and greater attention to personal care regimes has led to huge potential that companies such as P&G and Colgate are both targeting.

However, in describing the companies’ traditional business market as being ‘comfort zones’, the market researcher equally underlines how these emerging markets can present new challenges rarely dealt with before.

In particular, the researchers stress the huge hikes in food prices seen recently in the Indian market, a situation that has led to consternation over how to price many fast moving consumer goods companies price their products on the market.

Wall Street Equity Reaserch provides research on the main players within the personal care segment, including Colgate-Palmolive and Procter & Gamble.

Related news

Show more