SL shifting towards premiumisation – Nielsen SL Chief

25 August 2014 05:04 am Views - 3020

ri Lankan consumers are increasingly becoming more brand conscious and are shifting towards premiumisation while their choice between international and local brand consumption is also getting narrowed, according to a top executive of a global market research firm. According to Nielsen Sri Lanka Managing Director Shaheen Cader, this is not just a Colombo-centric phenomena but a shift that is also seen in rural economies as well.

“There is a shift towards premiumisation. Even rural sector consumers are shifting from just commodities to aspirational products and brands,” he said at the CIMA Management Accounting conference.  It was only last week the multi-brand luxury watch retailer Chatham Luxury Watches Director Vinod Hirdaramani said local demand for luxury watch brands were on the rise and the future market potential in Sri Lanka was even more optimistic.  Nielsen survey further shows that Sri Lankans are now opting for foreign travel to spend their vacation and this has grown significantly during the last 5-years.

Meanwhile Sri Lankan consumers have now become more health conscious and “want to look good,” Cader said.

During the first six months of this year (1H’14), demand for personal care products such as deodorant, creams and lotions, shampoos, shaving equipments and the likes have grown up by 16 percent Year-on-Year (YoY) while the country’s Rs.300 billion Fast Moving Consumer Goods (FMCG) has grown by only 8.0 percent YoY.
“Personal care products which offer convenience are the fastest growing,” he remarked.

More interestingly, during the 12-months to June 2014, Green-Tea volumes have grown by as much as 97 percent while sanitary napkin unit sales have picked up by 13 percent.

It was only recently the Ceylon Chamber of Commerce Chairman Suresh Shah urged the business community to be prepared to serve the needs of ‘Consumer7000’ – a consumer with a per capita in excess of US $ 7,000 by 2020.

“Thanks to rising incomes and cheaper access to modern communications tools such as smart phones and tablets, he or she would be far more connected. They would travel more than today’s consumer.  Due to greater connectivity and easier access to information, “Consumer7000” would be more aware of what is available in the world and this in turn will make him or her more demanding. Our products and services will need to match up in terms of features, quality and price. They will demand global brands,” Shah said at the recently concluded Economic Summit.

Cader further said that Sri Lanka’s modern trade has been challenged by online sales due to increased consumer connectivity. In 2013, smartphone shipments to Sri Lanka have gone up by 80 percent and every 20 persons out of 100 use a smartphone device in the country.