Motorbikes, the new family vehicle – Nielsen survey shows
A January 2014 presentation charting Sri Lanka’s consumer trends, by researcher Nielsen, has unearthed a number of new developments changing the landscape of local consumer behaviour, first amongst which was the fact that the motorbike had replaced all private motor vehicles as the new family vehicle.
According to the “Nielsen Annual Review 2013 Sri Lanka: Opportunities and Challenges” presentation, there are now over four million motor vehicles for five million households. And, while registrations for cars, three-wheelers and dual-purpose vehicles (vans) slowed down, motorbike ownership grew steadily to 2.7 million.
The same presentation also revealed that, while increasing television and refrigerator sales numbers were attributable to consumers replacing older models with newer, more energy efficient models, the 250,000 new computer owning and 550,000 new rice cooker owning households, as per 2012, grew even further in 2013. Penetration for computers rose from 27 per cent, in 2012, to 32 per cent, in 2013, while rice cooker penetration increased from 48 per cent, in 2012, to 59 per cent, in 2013.
It was further reported that, while fixed and mobile voice connection numbers were either in decline, or flat, mobile broadband connection numbers were increasing steadily, with approximately 1.2 million mobile broadband connections logged between January and September 2013. As such, Nielsen concluded that, with mobile broadband connection numbers rising to 485,000, as at end-2011, and 942,461, as at end-2012, there was a high growth opportunity for mobile broadband. Also, the same applies to Wi-Fi connectivity, which could also grow to rival the level of mobile broadband, with both of these accelerating even further once the two technologies reach critical mass locally.
Additionally, Nielsen also determined that there was an opportunity to increase Internet usage further in the 15-25 age group, namely in the areas of lifestyle and entertainment applications, while also making
inroads amongst 26-35 year olds. It was also noted that 52 per cent usually accessed the Internet through a dongle, 57 per cent through mobile means and 15 per cent through ADSL, with some using multiple means of access.
In terms of fast moving consumer goods (FMCG), growth for these type products was pulled down by a negative showing in the area of household care. This was also despite personal care products, such as deodorants, experiencing double digit increases. However, it also emerged that the decline in volume growth witnessed in 2012 has almost completely reversed in the last two quarters of 2013, with Nielsen advising marketers that the opportunity to raise prices may present itself in 2014. Nielsen also opined that recovery in the food and beverages category, as well as the household care category, could result from a strong turnaround in the agriculture sector, where 30 per cent of the working population are currently employed.
Meanwhile, according to Nielsen, the fastest growing categories fell mostly into the areas of lifestyle or personal care products, being, ranked from one to 10, deodorant, hair dye, soya meat, sanitary napkins, creams and lotions, talcum powder, perfumes and colognes, cooking aids, face wash and noodles. Additionally, Nielsen also revealed that the ‘magic’ price point for food and beverages was Rs. 30, while Rs. 40-45 was for personal care and Rs. 35 was for household care.
Further, Nielsen also highlighted traits of the consumer group known as ‘Generation Y’, now popularly referred to as ‘Millennials’, which comprise those born in the 1980s and 1990s. This group has been indicated to be more optimistic than all other groups, and more likely to spend on themselves. In addition, it was also noted that this group was best engaged via events, media habits, social media and even radio. According to Nielsen, it is this group that is leading the highest growth in terms of FMCG, as well as being the biggest broadband user group, while also, if successfully engaged, having the greatest potential for online financial and other services.