September 24, 2015

VW Will Inevitably Lose Its Global Sales Crown as a Result of the Emissions Scandal

Neil KingAnalyst Insight by Neil King - Automotive Analyst

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The news surrounding foul play by Volkswagen in the EPA emissions tests is a major blow to the group and in particular the core VW brand in the US, which has already seen its share of US light vehicle sales contract from 3.0% in 2012 to 2.2% in 2014 and further to 2.1% in the year-to-August 2015. The investigations are on-going and so it may well be that other OEMs become embroiled in this scandal yet but VW’s aspirations in the US will inevitably suffer a major setback and it seems inevitable that the Volkswagen Group will lose its global sales crown that it has only just won from Toyota based on the volume of deliveries announced by each company for the first half of 2015.

VW Group and Toyota Motor Corp Light Vehicle Sales, 2009-2014 and Deliveries, 2015 H1


Source: Euromonitor International/JATO Dynamics

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Importance of the Eurozone to the Global Economy


The eurozone has faced much turbulence in recent years but why does this matter beyond the region? Although its population accounted for just 4.7% of the world total in 2014, combined GDP contributed 17.3% to the global economy, while exports made up a quarter of the world total. Germany and France dominate with nearly 50.0% of the region’s GDP and consumer spending in 2014 while Greece, the epicentre of the eurozone sovereign debt crisis, accounted for less than 2.0% of regional GDP.

This datagraphic investigates the importance of the region through three key pillars: Economy, Population and Consumer Spending. Learn more about these research offerings.

September 23, 2015

Slowdown in Consumer Electronics Leaves Room for Toys in Holiday Budgets

Mykola GolovkoAnalyst Insight by Mykola Golovko - Senior Toys and Games Analyst

The growing popularity of smartphones and tablets over the past few years has had a mixed range of consequences for the global toys and games industry. Aside from providing fertile ground for the development and popularisation of mobile games, the popularisation of connected devices greatly increased consumer access to media, resulting in greater demand for licensed toys based on popular entertainment franchises. The popularity of smartphones and tablets has also been a significant drain on holiday spending budgets, as the products were popular gift items around the world. The dynamic became particularly negative for toymakers as mobile games made smartphones and tablets ever more appealing for young children. However, by 2015 market saturation and price erosion resulted in declining value sales in both smartphones and tablets, leaving more room for toys in holiday spending budgets.

Global Retail Value Sales Growth in Smartphones and Tablets


Source: Euromonitor International

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General Mills Posts Solid Profit Growth in the US but International Sales Remain Worrying

Pinar HosafciAnalyst Insight by Pinar Hosafci - Packaged Food Analyst

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General Mills has recently announced its first fiscal quarter results revealing net revenue growth of  4% in constant-currency basis and profit growth of 20%, one the highest rates in its recent history. Profit growth came off the back the aggressive cost-cutting measures including trimming the workforce, closure of underperforming manufacturing facilities and ousting of extraneous businesses like Green Giant. The US accounted for the bulk of revenue growth, which was driven by Annie’s Homegrown, which the company acquired in October 2014, and ongoing renovation and innovation in cereals leading to 6% growth against the 1% decline in the overall category.  General Mills’ better-than-expected  performance stands in stark contrast with Kellogg, which operates in similar categories. The two companies overlap in multiple markets including the US and Canada breakfast cereals, France snack bars and US frozen bakery which are low growth categories and yet General Mills still managed to grow its share while Kellogg failed to do so.

The push towards organic and natural underpins General Mills’ success in the US


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YouTube Bloggers and Celebrities in Beauty: Powerful Advertising Tool or Competition?

Nicole TyrimouAnalyst Insight by Nicole Tyrimou - Beauty and Personal Care Analyst

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Beauty conglomerates locate a large portion of their finances on the marketing and advertising of their offerings including employing high profile celebrities and more recently fashion and beauty bloggers/vloggers. Estée Lauder has tapped on both ends over the past three years by employing both Emily Schuman from Cupcakes and Cashmere and reality TV star and model Kendal Jenner. Bloggers and celebrities are used to create buzz around a brand and for their perceived status as an influencer in consumers’ purchase decisions. They can also raise awareness of a brand among a specific demographic group which the brand has traditionally low penetration in.

However, the use of celebrities in both advertising as well as a spokesperson/endorsement of beauty products has in fact a low influence on consumers’ purchase decisions. In Euromonitor’s Online Survey on Personal Appearances only an average of 15% of consumers indicated that celebrities influence their purchase decision across all four major beauty categories (hair, colour, fragrance and skin). The highest responses came from China, India, Middle East, Mexico and Turkey. India and Turkey had consistently higher percentages of younger consumers that claim to be influenced by celebrities when purchasing their beauty products. In terms of categories, fragrances (where celebrities are most prominent in advertising) was also most influential among consumers with 16.7% of consumers claiming to be influenced by celebrities endorsements and advertising.

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World’s Top Five Most Expensive Spirits Brands

Jeremy CunningtonAnalyst Insight by Jeremy Cunnington - Senior Alcoholic Drinks Analyst

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Distillers frequently introduce special limited editions of brands or luxury variants of their major brands, such as Johnnie Walker’s Blue Label, although they account for a small proportion of the overall brand’s sales. However, in a global briefing on its new value shares model, Euromonitor International reveals the top five most expensive brands, with all variants included.

The ranking reveals a mix of local and international spirits brands with one common denominator –the brands’ volumes were all focused on Asian markets and, all bar Martell, had volumes of less than a million 9-litre cases.

World's Top Five Most Expensive Spirits Brands

    Brand (Country of Origin)  Price (US$/litre) in 2013
1. Han Jiang (China) 380
2. Guojiao 1573 (China) 365
3. Royal Salute (International) 280
4. Imperial (South Korea) 257
5. Martell (International) 224

Source: Euromonitor International 

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September 22, 2015

Q&A: Understanding the ASEAN Consumer

An HodgsonAnalyst Insight by An Hodgson - Income and Expenditure Manager

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Our recent webinar on “Understanding the ASEAN Consumer” explored the diversities and similarities in consumer income and spending patterns across the ASEAN, with detailed examination of the four largest markets in terms of total consumer expenditure (Indonesia, Thailand, the Philippines and Malaysia). The webinar went on to assess the key challenges and opportunities that these disparities and similarities present before ending with a Q&A session, highlights of which are below.

ASEAN-mapApart from the diversities that call for a granular business approach, can you tell us what consumers across the ASEAN have in common?

Beyond the diversities and disparities that we discussed in our webinar, Southeast Asian consumers and businesses share an eagerness to welcome business and investment opportunities with the common goal of prosperity. They are willing to cooperate with each other to generate wealth and improve the standard of living, which culminates in the imminent creation of the ASEAN Economic Community (AEC). In addition, ASEAN consumers are young compared to more developed regions as well as China; they are family focused and are also very technology savvy. These are the similarities that we need to take into consideration when targeting the ASEAN consumer.

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Euromonitor to Speak at The Adventure Travel World Summit 2015


Event Name: The Adventure Travel World Summit 
Event Dates: 5-9 October, 2015

Location: Puerto Varas, Chile

Presentation Time: Friday, October 9th, 9:00-10:30

Event description: Hosted by the Adventure Travel Trade Association, The Adventure Travel World Summit  is the premier gathering of the adventure travel industry. The theme of the Summit will be “Viva la revolucion de la aventura!” Chile is poised to showcase its adventure potential to nearly 700 delegates from around the globe that will gather to learn, to be inspired and to connect more deeply with the $263 billion adventure travel sector. Throughout the plenary sessions, passionate speakers including influential writers and entrepreneurs will share examples of acts of courage, challenges to the status quo, defense of values — and ask how delegates will be part of the adventure revolution. Current session speakers will deliver educational keynotes and sessions focused on adventure travel standards, partnerships and innovation while keeping an eye on marketing to international audiences and community development best practices.

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Food Trucks in Brazil: Democratisation of Premium Food or Premiumisation of Democratic Food?

Angelica SaladoAnalyst insight by Angelica Salado - Research Analyst

View Andrius Balsys's profile on LinkedIn

2014 was a remarkable year for food trucks in Brazil. During the year, this new format, already very famous outside the country – especially in the US – and which already had some pioneers operating in Sao Paulo, took to the streets of major urban areas across the country. The movement started with the popularisation of gastronomy fairs in major cities and is increasingly perceived as an alternative way to consume high-quality food at fairer prices than those offered by full-service restaurants.

Brazi-Street-FoodStreet stalls/kiosks is expected to grow by 19% in terms of current value sales in 2015 and by 6% in terms of transactions. Over the forecast period, the category is expected to rise at a CAGR of 7% at 2015 constant prices to 2020, performing better than full-service restaurants, with an expected 4% value CAGR at 2015 constant prices over the same period. Trucks’ positive performance is a result of curiosity among those who have not yet tried eating at them, the impact of the economic situation, a desire to spend less when eating out and the increasing presence of such trucks all around major cities.

Pioneers to invest in democratising premium food

As chefs working in famous restaurants started to endorse the campaign to bring high-quality food onto the streets at more affordable prices – such as Alex Atala, who serves his most famous dish prepared with chicken, galinhada, at street fairs and urban events – food trucks began to stand out as an interesting way to invest, reach many consumers and innovate, both in terms of truck design and brand image. One of the most famous trucks in the country is Massa na Caveira, specialising in artisanal pizza and constantly traveling to many states in the country, using intense social networking activity to engage its clients. Other important players that have invested in the food truck format include Rolando Massinha (artisanal pasta) and Buzina Food Truck (artisanal hamburgers). Both of them have shown a good performance over the years, as a result of their quality food, fair prices, constant presence and interaction with consumers on social networks, and focus on the “artisanal” concept of food. As a consequence of strong demand from consumers and with the support of iconic trucks, gastronomy street fairs first evolved into food truck festivals held in shopping centre car parks before, more recently, developing into fixed food parks. These places offer a complete structure, including music/DJs, toilets, parking, tables, chairs and heaters, which ties in with the high-quality street food concept on offer.

Continue reading "Food Trucks in Brazil: Democratisation of Premium Food or Premiumisation of Democratic Food?" »

September 21, 2015

Can Local Start-ups Outperform Global Companies in Spain?

Pedro AguilarAnalyst Insight by Pedro Aguilar - Research Associate

Spain is not only a popular tourist destination; the country is also becoming a successful incubator of high-tech start-ups, with Mundo Reader SL (BQ) and other local companies competing against global companies.

The rise of local start-ups

Between 2009 and 2013, the Spanish economy experienced a general decline in all industries and segments. In 2013, unemployment stood at 26%. And yet, despite this situation, Spaniards found the motivation to materialise their ideas and start their own businesses, such as BQ. These business models are very far from the traditional strong points of the Spanish economy and it seems that Spain has room for technology companies that are able to compete against the likes of Samsung and Apple.

In 2015, the Spanish consumer electronics market benefited from government initiatives, such as the Center for Industrial Technological Development (CDTI). This public corporation under the Ministry of Economy and Competitiveness promotes innovation and the technological development of Spanish companies. It addresses funding applications and supports the research, development and innovation of Spanish companies at both national and international level. In this environment, a number of companies have thrived, and it is now possible to find in Spain companies like BQ, the trademark behind Mundo Reader SL, which began as a small start-up, created by a group of university students. BQ started with USB drives, before expanding its product portfolio to include e-readers, whilst always maintaining a more personalised, post-sales, service-orientated strategy, and moving into the fast-growing smartphones category in 2013. A personalised, post-sales service was possible because BQ’s smartphones were sold directly to the consumer rather than through a mobile operator, which competitors used to do. This enables the consumer to obtain a phone at a better deal than directly from a retailer where Apple and Samsung smartphones are sold at much higher prices. This strategy enabled BQ’s product portfolio to expand to include e-readers, tablets, smartphones and 3D printers.

Continue reading "Can Local Start-ups Outperform Global Companies in Spain?" »


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