This briefing looks at changes in Euromonitor International’s home care forecasts across the 54 markets covered by the Industry Forecast Model, as part of our quarterly forecast review. An update of macroeconomic factors, including GDP growth and unemployment rates, has led to a marginal downgrade of our forecast projections. Complementing the existing pessimistic COVID-19 forecast scenarios, an optimistic scenario has been added to account for the possibility of a faster pandemic recovery.
This report comes in PPT.
Global GDP projections remain well below pre-pandemic levels. COVID-19 is still spreading and, in many countries, social distancing measures remain in place. Home care was among the very few industries that saw growth as a result of the pandemic outbreak, albeit in deteriorating economic circumstances. The threat to health and home seclusion have proven to be very powerful consumption drivers.
When analysing home care demand drivers, income is of secondary importance. Consumption of home care products is primarily linked to (perceived) necessity. As home care is strongly linked to hygiene, this necessity increased considerably during the pandemic. Consumers started prioritising their expenditure on hygiene-related products, and this is expected to continue in the forecast period. Compared to other industries, home care is relatively income inelastic.
The Q1 quarterly update meant a slight decline in actual value sales across the 54 markets, translating into a value sales contraction of USD333 million by 2025. Among these markets, India saw the strongest downgrade in forecast value, as the country was among the countries worst impacted economically by the pandemic. It is set to make a slow recovery, with GDP forecast to return to growth by 2021 and staying positive over the forecast period.
Asia Pacific and the Middle East and Africa are the two regions with the highest unmet potential globally. A combination of low per capita spending and rising average disposable income in many of their markets provides fertile ground for consumer migration to more sophisticated product areas within home care. The shift from manual to automatic laundry in Asia Pacific alone is set to add an additional USD3.7 billion in laundry detergent sales by the end of the forecast period.
This is the aggregation of laundry care, dishwashing products, surface care, chlorine bleach, toilet care, polishes, air fresheners and insecticides.
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