By AYOOLA OLAOLUWA
The strain on expendable income of Nigerians and the changing strategies in the battle for consumers’ pockets have created massive disruption in the Fast Moving Consumer Goods (FMCGs) sector, with hitherto dominant players struggling to survive, Business Hallmark findings can reveal.
Checks revealed that FMCGs companies in the country, Unilever Nigeria Plc, Procter & Gamble (P&G), PZ Nigeria Plc, Holdent International Limited and Cleanmax Industries Limited, among many others are unrelenting in their quest to dominate the market.
Apart from adding more value to their product offerings, such as cutting prices to attract consumers’, they have also embarked on massive re-branding, re-packaging, re-designing and reducing sizes in order to retain consumers’ interest as purchasing power continued to dwindle.
According to BH findings, one of the leading FMCGs companies hit by the changing trend is Unilever Nigeria. Plagued by several problems, including the downturn in the nation’s economy which has brought about a decline in the purchasing power of an average Nigerian; unfavourable economic environment; effects of the Covid19 pandemic, as well as the strategies employed by competitors to gain more market share, the company’s products are daily loosing ground to newer and cheaper brands manufactured by rivals.
Checks revealed that several household items produced by the company like Omo and Sunlight Detergents, Lipton tea, Blue Band margarine, Sunlight Liquid Wash, Pears baby care goods, Lux soap, Close Up and Pepsodent toothpastes, Knorr and Royco seasoning and others have been dethroned by other brands.
For example, in the liquid soap category, Sunlight Wash manufactured by Unilever is lagging behind other brands.
A market survey done by our correspondent shows that Morning Fresh and Mama Lemon by PZ Cussons Plc and Holdent International Limited respectively are clear market leaders. Followed by gbc Lemon Fresh Dishwashing Liquid by GBC Murphy Limited., Sunlight Wash by Unilever Nigeria Plc and Cleanmax Sparkle by Cleanmax Industries Limited.
While the five brands are market leaders, Morning Fresh by PZ Cussons towers above others. Buyers have the choice of picking between three variants: Original Fresh, Zesty Lemon and Anti-bacterial made solely for dish washing, including porcelain, plastic, acrylic and stainless.
Most Lagosians who spoke with BH, said they prefer the product because of the way it was packaged and because it does not require one to scrub dishes too hard to get clean results.
One advantage the product has over others is that it can easily be found in shops and retail stores nationwide.
Though, the product is relatively expensive than its peers, it is still the most preferred by Nigerians. A 450ml size currently sells for N650, 200ml N330 and 1000ml, N1,300.
Closely on the heels of Morning Fresh is Mama Lemon Dishwashing Liquid by Holdent International Limited. According to some of the fans of the product, they choose it because of many of its attributes, which include more lather for easy washing, it could be deployed for other laundry functions, it last longer as it has an expiration period of 3 years.
Findings revealed that Sunlight Dish Washing Liquid, manufactured by Unilever Nigeria, is not doing too well in the market despite the fact that it is one of the pioneer brands of dish washing liquid in the country.
It is relatively cheaper than its peers as the 400ml variant sells for N500 and 750ml for N1000.
in many stores. Some lovers of the product said they prefer it for two main reasons – because it is the most economical brand available and is gentle on the skin.
However, a critic of the product said it is not ideal for cleaning and scrubbing surfaces, as it leaves stains on them overtime.p
On the other hand, Cleanmax Sparkle Dishwashing Liquid by Cleanmax Industries Limited, is playing strong in the market because of several factors.
BH observed that is is preferred by hospitals, eateries and offices because it has an anti-bacterial make up effective for killing bacteria and germs. It is one of the few brands that has hand wash variants and is used as disinfectant to fight Covid19. The 500ml variant sells at N550 in many stores.
Also in the detergents category, Unilever Nigeria products are playing catch up to other brands. One of such products is Omo (Old Mother Owl) Detergent, once an household name in the country. However, the product continues to fight for relevance as Nigerians taste continue change.
A one-week survey conducted by BH indicates that Omo has been overtaken by other brands and is not doing too well in the market. It was discovered that brands such as Ariel, Klin, Good Mama, Magik WAW, So Easy and Canoe are now the choice of many Nigerians, due to several factors.
One of the factors is pricing. Our correspondent garthered that many Nigerians now go for cheaper brands in order to save cost.
‘I have stopped taking my wife to the market for shopping because we dont normally come back until very late in the night” said a civil servant in Lagos, Mr. Soji Adedotun.
‘Because of just N10 difference, my wife can visit all the stalls in the market to price goods. At the end of the day, after walking round the market for about one hour for just one product, we often return to where we started to buy the good.
“My wife wont start buying until she has priced what she wanted to buy in all the stalls and noted the difference in prices. Initially, I used to be angry with her but I now understand. She is just trying to save money for other things needed by the family”, said Adedotun.
Our correspondent gathered that the trend is prevalent among Nigerians, especially women. However, while they are happy to get good bargains, the losers are manufacturers whose products are on the high side.
A price survey conducted by BH shows that a 500g Omo Detergent sells for between N600 and N650 while the 900g pack cost between N1200 and N1300 depending on the market.
On the other hand, a 500g Ariel Detergent is between N530 and N600; 500g Klin, N450 and N500 and Good Mama N550.
Meanwhile, it is not all doom for Unilever Nigeria as one of its products, Sunlight Detergent, is second only to Ariel in the battle for the detergent market.
According to the result of the survey, Ariel is the number one choice of most Nigerians, with 35% market share, followed by Sunlight with 30%, OMO with 10% and Klin got 7%, Good Mama 6% and others 12%.
The situation in the toothpaste segment is not too different from the other segments. Though still the market leader, Close Up, produced by unilever, is facing stiff competition from other brands. Brands such as Colgate, Oral Up, My My, Darbur Herbal, are giving Close Up a run for its money.
Check revealed that a tube of Close Up in the market is between N380 and N420, Oral B N450 to N500, Colgate N420 to N480, Darbur Herbal N300 to N350 and My My N250 to N300. Due to the sharp differences in prices, the demand for My My and Dabur Herbal is on the rise.
Another toothpaste brand produced by Unilever Nigeria, Pepsodent, is however not doing too well. According to BH findings, only 1 out of 20 respondents prefer Pepsodent to others, compared to Close Up which controls around 40% of the market. The product sells in the market for between NN380 and M450.
Other product by Unilever, namely Blue Band magarine, Royco seasoning, Pears, among other have all been displaced by cheaper brands.
Expectedly, the fortune of the company has taking a massive hit. It has repeatedly recorded back-to-back loses. For example, in H1 2020 (January to June), its revenue dropped by 36.1%. According to the financial statements the firm released to the Nigerian Stock Exchange (NSE), the company posted the sum of N27.3 billion as turnover for the period ended June 30, 2020, compared with the N42.7 billion recorded in the same period of 2019.
A breakdown indicated that the two main segments of Unilever Nigeria contributed to the reduction in the revenue generated in the period under review.
The revenue generated from the food products arm of the business went down to N15.3 billion from N21.4 billion in H1 2019, while the home and personal care business raked N12.1 billion versus N21.3 billion generated in the first half of last year.