Global consumer goods brands have increased their presence in Bangladesh capitalising on the significant growth in the number of urban consumers, industry people say.
World’s top brands like Nestlé, Mondelez International, Del Monte Philips and VLCC to name a few have set foot in the country and already strengthened their position.
Toshiba and Panasonic, which are presently distributing products teaming up with local marketing firms, are planning to open their own stores for joining the bandwagon of consumer goods market, according to market insiders.
“Bangladesh with 16m people offers vibrant consumer market for the global brands,” said Syed Alamgir, executive director (consumer brands) of ACI, told the Dhaka Tribune.
“People are becoming more conscious about brands as purchasing power is increasing and the economy continues to achieve growth.”
In April, a US-based family products manufacturer SC Johnson & Son made a vigorous entry into the Bangladesh market by acquiring three leading cleaning products of ACI brands, including ACI Aerosol, Mosquito Coil, Cockroach Killer Spray, Angelic Air Freshener and Vanish Toilet Cleaner.
Sanjay Bapna, CEO of Philips Electronics Bangladesh Limited, said the consistent economic growth over a decade and better prospects in the coming days is behind the reason to come here.
“Middle class population is growing with increased purchasing capacity, who are showing an increasing interest about brands while choosing goods.”
Philips Electronics Bangladesh is the latest to expand portfolio here in July with a range of new products, including kitchen appliances, grooming, coffee, baby care products and air purifiers.
According to national and international organisations, the Bangladesh economy showed strong performance with an average of annual real GDP growth at 6% during years from 2009 to 2013, with an economic outlook remaining positive and anticipation that the real annual GDP growth will stand at 7% on an average between the years of 2014 and 2018.
Only over 30% of the population lived in urban areas currently, although the expanding garment industry and growing employment opportunities are encouraging more people to live in urban areas.
The mean age of the Bangladeshi population stood at 30 years in 2013, and it is anticipated that the population in Bangladesh will reach 170m by 2020.
Growing disposable income and an expanding urban middle class bolstered sales of non-essential items.
As a result, categories such as beauty and personal care products (CAGR 15% over 2009-2013), home care (CAGR 12%) and tissue and hygiene (CAGR 20%) also performed strongly, according to a London-based market intelligence firm Euromonitor International.
In its report released recently, Bangladesh, Cambodia, Laos, Myanmar and Sri Lanka were identified as the region’s next generation of consumer markets.
“Bangladesh’s consumer market is by far the largest of the five countries – bigger than the other four combined,” it said.
The report said with consumer expenditure of $139bn in 2014, Bangladesh is a similar size to Finland, said the report.
With per capita spending of only $880 in 2014, low purchasing power means it is not an easy market for multinationals, but with the country’s most sizeable consumer product categories, it offers opportunities for those with the right products and services, it said.
“Bangladesh is expected to add 1.6m urban inhabitants per year between 2015 and 2030 - equivalent in size to the US city of Philadelphia in each year. These urban consumers are driving growth for western brands.”
It said through overseas travel, more middle class Bangladeshis have been exposed to Western brands, and with consumers’ expectations growing alongside their incomes, this is also increasing opportunities for consumer goods companies.
Euromonitor International in its analysis on baby food market of Bangladesh said between 2009 and 2014, 18.9m babies were born in Bangladesh.
But the baby food market was worth just $55m in 2014, and the baby and child-specific beauty and personal care segment is just $10.9m, the report said.
“This compares with $1,237m and $45.8m respectively in Vietnam, a country with a similar total consumer expenditure base and half as many babies born in the same period.”
