Demand for premium detergent brands decline amid shrinking consumer wallet

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The rapidly worsening economic fortunes of Nigerians have forced most households to dump costly, premium soap (detergent) brands in the country for cheaper and newer brands. The reduced purchasing power among consumers which is further pressurised by rising unemployment has left most household with no choice than cut spending.

The Nigerian laundry soap market has different market segments with each competing for visibility and profitability in the market space. This includes the bar soap, powder detergents, and liquid soap.

Until a few years ago, bar soaps are the most popular in households, then, liquid soap was only popular among the elites. Today, with a growing awareness about the health benefits of hand washing and easy access to liquid soap, consumer behaviour seems to have changed towards liquid soaps.

Market dynamics over the years

In the past, OMO detergent (a household name which stands for “Old Mother Owl”) from the stables of Unilever Plc. was the undisputed leader in the detergent market. The dominance of OMO as the detergent of choice dwarfed the performance of rivals as it boxed other small players, into a tight corner.

This was eventually challenged in 1996 when Eko Supreme Resources, makers of So Klin, made entry into the Nigerian market with innovation, a white detergent, which was an industry first.

It started by nibbling at the fringes of OMO’s market share and in addition,  its offer of detergent with a deep-washing function gave Nigerians reasons to switch their loyalty to the new brand. For them with So Klin, they did not need to spend extra money to buy bleach for their white clothes.

Another interesting dimension was introduced into the market by another manufacturing-giant, Procter & Gamble with the launch of Ariel detergent brand into the market. These major manufacturers are however unrelenting in their quest to dominate and hold the ace in the detergent market.

Bearing in mind the various challenges posed by new entrants into the detergent product line, major producers now have more threats from the ‘not so huge players’ such as Nasco Industries, producers of Brytex and Bonus, and Limex Global, the manufacturer of Miss Bimbo who are now making huge impacts in the detergent market.

Sekinat Adewale, a seller at Ojota under bridge noted that most buyers now go for cheaper brands.

“When people come here they just ask for the prices of the various brands and pick the cheapest,” she said.

She further added that buyers now patronize local hand washing liquids for their kitchen duties rather than the expensive washing liquids from manufacturers.

“You know many people now have training on how to make liquid soap, so instead of buying the expensive ones, they would just buy the cheaper liquid soaps” she noted.

Unfortunately, this paradigm shift by consumers has impacted negatively on the revenue of the major manufacturers in the country. PZ Cussons a major player in the consumer goods space recently disclosed that its financial performance for the full year 2019 which ends in May will not be very profitable.

This situation, according to the company, is largely due to the lackluster performance by its Nigerian subsidiary, PZ Cussons Nigeria Plc. where consumers’ purchasing power has reduced. Mr. Sunday Ekong, 45,  a dry-cleaner said that most of the detergent brands are doing well in the market basically because they all recognise that consumers want more for little amounts. According to him, most consumers consider price, size, and packaging when deciding on a brand in the market.

“The limitations of traditional bar soaps have led to the development of synthetic detergents that are superior in performance. He noted that Sunlight, Ariel and So Klin are major contenders for the leadership position in the market, but that the odds favour Sunlight and Ariel brands.”

BusinessDay also noticed that major players are now in the race for more value-addition to their brands, such as pleasing fragrances to attract and retain consumers’ interest. Also, re-branding, re-packaging, re-designing and reducing sizes to be more pocket-friendly with the reduced purchasing power of consumers are some of the other strategies employed by these big players to ensure that they capture more of the market for themselves.

 

OLUFIKAYO OWOEYE

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