The Romanian market is dominated by international giants such as P&G and Unilever, as well as by private labels, i.e. no –name products developed by retailers.
Each Romanian spends EUR10 per year on 4.8 kilos of detergent – on products such as Dero (Unilever), Ariel, Bonux and Tide – all of which are brands in P&G’s portfolio.
“According to the latest data, the Romanian segment of detergents is valued at around EUR190 million, the eighth largest on the Romanian consumer goods market,” says Iulia Floricica, senior brand building manager Laundry within Unilever South Central Europe.
She does not say what the other seven segments are, but according to ZF data markets such as cigarettes, beer, juices, mineral water and coffee boast higher-value sales than the detergent market.
One of the main indicators that shows the market’s development rate is the penetration of automatic washing machines, 65-67%. In Romania there are still households with non-automatic washing machines, as well as those that lack washing machines altogether. One of the reasons for the underdevelopment is that there are still homes not connected to running water.
Unilever has the best-selling detergent brand by volume in its portfolio– Dero. Representatives of the Dutch giant do not provide information on the volumes sold or on the other top brands.
According to ZF data, in 2012 the best-selling detergent brands by volume were Dero (Unilever), Ariel (P&G), Bonux (P&G), private labels and Tide (P&G). Moreover, a year ago representatives of Unilever said one in three detergent boxes sold in Romania is Dero.
The importance of brand
“We believe the main advantage of Dero is brand power. This is the oldest brand on the Romanian detergent market, with a history that started in 1966 and continues at the Ploiesti plant. Moreover, Dero is the only Romanian brand on the detergent market. Iulia Floricica says on a competitive market, such as the Romanian one, the brand is the most important element.
“In the past few years people have been increasingly mindful of the brands they buy and are much better informed.”
However, at a time when consumers are increasingly price-sensitive, private labels have climbed in the ranking of the best-selling products by volume, to no. 4, ahead of an established brand such as Tide.
But in the case of private labels, they are analyzed together as a generic category, so brands such as Dero and Ariel do not fight against one single private label, but against a whole category.
In addition, while established brands fight against one another with significant promotional budgets, private labels are not in competition, as they are present only in the chain that owns them. Private labels are lower-priced than their brand-name counterparts.
Larger packs are in demand
“In the past, detergent consumers went for smaller packaging because of the smaller price per pack. But after the financial crisis struck, consumer behavior has changed. Now shoppers tend to go for larger detergent packs, of 6-10 kilo, because they come with a better price per wash,” Floricica says.
Larger packaging saves money in the longer term. That is why consumers prefer discounts on larger packaging.
According to ZF data, almost 80% of detergent sales (in volume) are made in the big store chains.
On the other hand, kiosks and food retailers left over from communist times barely have 10-20% of detergent sales. The market is small anyway, with consumption per capita lower than the European average.
Unilever South Central Europe, to which sales of the Romanian company are registered, ended last year with sales of around 790 million lei (EUR177 million), up 9% on the year before.
(English version by Daniela Stoican)