Home Brands Low cost detergents displace older brands as economy struggles

Low cost detergents displace older brands as economy struggles

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… Magik, Good Mama, Sunlight are new top brands

No king reigns forever. This is true of the powder detergent industry in Nigeria, perhaps, more than any other. Once, Unilever’s signature product, Omo ruled the market. It was later dethroned by So-klin and more recently, Ariel – both of which have held sway for many years. But it would appear that the fate of Omo is gradually befalling So-Klin and Ariel.

The industry, like in most climes, is very competitive. With products offering nearly the same value, each competitor has to adopt strategies to retain a significant percentage of market share. Here it would seem the most important is pricing as the realities of the country’s struggling economy hit home. And as far as this goes – especially in the most parts of the South West, including Lagos – at the moment, Nourdm Global Company’s Magik appears to have gotten it alright. But mostly in the mini pack category.

“If you don’t redefine your marketing strategy, you would be definitely affected by the current economic conditions because if you look at the market, you will observe that there is concerned budget on the part of consumers,” notes Dr. Bongo Adi, analyst and senior lecturer at Lagos Business School.

Obvious from BusinessHallmark’s market survey is that new kings have emerged in the form of Magik, Expand Global Industries’ Nitto, Eko Supreme Resources’ Good Mama, Unilever’s Sunlight and PZ Cussons’ Canoe. And among these new kings, Magik is staking claim to the biggest crown. This is an interesting new reality that has emerged, as a result of a combination of factors the principal of which is, of course, economy. But before then, a brief look at the industry’s long road.

Omo is a generic product. Perhaps, no Nigerian alive can possibly tell of when there was no Omo. Indeed if any elder had a story to tell about Omo, it would certainly be about how once it was so dominant that every powder detergent was called by its name. So dominant was Omo in its day that neither Elephant nor Surf detergents produced by another industrial giant, PZ Cussons, could sustain a challenge against it.
It literally dwarfed all. And it did so for a very long time. Indeed, for as long as anyone can remember… until the late 90s when the era of Eko Supreme Resources’ So-Klin began and eventually eclipsed Omo. It continues to struggle for relevance.

Introduced first around 1996, So-Klin changed the look of detergent in the country. It came in white colour, first to do so. Omo and the others before it had been blue. So-Klin proved an effective stain remover – but also as many would discover later, too harsh on clothes. From the fringes, it gradually cut deep into Omo’s market share, becoming the favorite detergent. Omo has not recovered, perhaps never will, especially in the face of growing competition in the industry with preponderance of new products battling for market share.

For a few years, So-Klin held sway. It had no real challenge. That was to change, however, with gradual acceptance of Procter & Gamble’s (P&G) Ariel. Although Ariel was first introduced in the late 90s, it never really took off until the early 20s, during which period it deployed heavy advertising.

Ariel had one big advantage over So-Klin. Many had begun to complain about So-Klin being too harsh on clothes, such that it faded and wore out clothes’ texture within a short period. Ariel was an answer to that complaint. And it had nice fragrance too.

Ariel cut deep into So-Klin’s market share, especially in the 90g category sold at N50 for a long time. But while Ariel did better in this category, So-Klin retained a large percentage of the market share in the smaller 28g category sold at N20, especially in the Eastern Nigeria market. Now sold at N30, the So-Klin 28g is still doing quite well in the East – so is Ariel -because other newer brands are yet to take root.

However, in the Lagos, Ogun and other states of the South West which hosts the manufacturing plants of most detergent industries, competition is more intense. Ariel and So-Klin have been dethroned by the new kings. The critical tool here is pricing. As Katherine Paine noted “The moment you make a mistake in pricing, you’re eating into your reputation or your profits.”

“These are also highly elastic commodities. Given relatively high inflation rate, concerned budget of households and individual consumers, some will shift away from the higher end products to lower quality but more affordable varieties,” Adi says.

“So, the determining factor for consumers is affordability rather than quality. You will generally observe a shift away from those high end products like Ariel and So-klin towards more affordable products in the market.”

Indeed, in a struggling economy like Nigeria’s where nearly 90 million of its estimated 200 million population now live in extreme poverty according World Poverty Clock, and where the Middle Class rarely exists, price as opposed to quality is easily the major deciding factor in consumer preferences. This is precisely why So-Klin and Ariel, particularly the latter, which have until recently, dominated the market, are already on the road to possible oblivion.

“Ariel used to sell more, but it is no longer so,” said Iya Shade, a shop owner at Bola Hassan, Alapere, Ketu, Lagos. “Now people buy more of Majik.”

“It is price,” she explained. “Magik is N50 and Ariel is N80. So, people just prefer to buy Magik because there is no money.”

Size categories and prices

Powder detergents come largely in four major different sizes. There is the smallest 28g, the 90g, the medium 190g and the family size which range from 900g, 1kg to 2kg.

The smallest 28g size sold at N30 is largely So-Klin dominated. Wow introduced by Expand Global Industries got some attention, but it hasn’t been able to sustain it.

In the low end market where majority of the buyers are, the 90g size category is in hot demand, followed by the 190g. And this is where price has proved to be the biggest weapon.

In the 90g size category, Ariel and So-Klin go for N80, and this is largely why they are nearly out of business in this category. Magik, the most selling brand here, goes for N50; and so are Good Mama – which Eko Supreme Resources introduced in response to the changing market trend; Canoe introduced by PZ Cussons, possibly for same reason; Nittol and Unilever’s Sunlight, the company’s response to its dying Omo brand, and a couple of other newer products.

Mama David, a shop owner at Olokemeji Estate, Ishashi, Ogun State says she no longer bothers with Ariel and So-Klin because “people no dey buy them again.”

“If I buy Ariel, e go stay with me for a long time. I no go sell am. Na Magik, Good Mama and Sunlight people dey buy. Those ones na N50. Meanwhile, Ariel na N80. They want something that is big and cheap. Quality no too matter.”

She was talking when her customer, Taiwo Idris walked in to demand for 90g Magik. Asked why he preferred Magik to other products, he said: “Because it’s smoother, it doesn’t spoil clothes and it is more affordable.”

The next most selling size category is the 190g. While Magik is the emerging clear leader in the 90g category, the 190g is a bit more competitive. Here, Good Mama appears to have a slight edge. But Sunlight, Nittol, Magik, Canoe and Boom – another product of Eko Supreme Resources’ – are not doing badly. Their positions are nearly in that order.

Rana, introduced late 2018, and So-Easy just coming into the market have not been around long enough to make noticeable impact, while Miss Bimbo is neither here nor there. Already, however, the case against Rana is that it doesn’t foam well enough.

Again, Ariel and So-Klin are struggling in this category because of price. While others are sold for N100, they go for N150.

“I don’t buy Ariel and Klin,” said Ngozi, a middle aged woman who displays varieties of detergents at Ojodu-Berger, Lagos. “Those two are higher quality detergents. They are more expensive and people are not asking for them.”

Asked which she sells more, she said “Good Mama. But Sunlight moves too. So, is Magik, Nittol and Canoe.”

Like Ngozi, most of the other sellers at the ever busy Berger street market have neither Ariel nor So-Klin on display, and certainly, not Omo.

In the family size category, Sunlight’s 900kg which sold for N400 in certain supermarkets and N450 in the streets appear to be the clear leader. And the reason is quite easily its relative affordability. It moves better than Sunlight 2kg sold at N1150.

“Sunlight 900kg sells the most,” said Emeka, owner of one of the busiest supermarkets at Ishashi Bus Stop, Ogun State. “The price here is 400.”

Sometimes last year, PZ introduced Tempo 500g for N250, perhaps in attempt to cut into the big detergent market. Initially, people got attracted to it because the price was attractive. The rush prompted PZ Cussons to increase the price to N300. It backfired.

Indeed, even before the hike, many had begun to complain that the product doesn’t foam well and that it lacked quality. PZ eventually returned the price to N250, but it still hasn’t changed Tempo’s fortunes in the market by much.

So-Klin’s 1kg detergent sold at between N700 and N750, Emeka says, “still moves a bit.” Looking at packs of Omo 900g sold at N600 where they are gathering dust, it was obvious that even the big Omo has not fared better.

Magik 900g which sold at between N400 and N450, unlike the 90g, has not moved as such. The company’s strength, it would appear, lies in the smaller size products.

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