Consumers around the world are displaying a growing preference for global brands rather than locally manufactured products. The latest NielsenIQ Global Brand-Origin Report highlights consumers’ preference for and sentiment towards products manufactured by local manufacturers versus large global/multinational brands.
While the survey findings have pointed to a relatively balanced view across global and local brands in recent years, the latest results show consumer preference is tipping toward global brands across the majority of categories.
Preference for a global brand was strongest in the baby wipes/diapers and baby food/formula categories, where just 7% and 10% of global consumers, respectively, said they prefer to buy brands from local manufacturers. In Malaysia, at least nine in 10 consumers prefer global brands when it comes to baby products – baby wipes/diapers (90%) and baby food/formula (87%). Other categories where Malaysian consumers showed low preference for local brands include feminie care products (15%), pet foods (14%), vitamins/supplements (16%), and skin care products (18%)
On the contrary, categories where Malaysian consumers were more inclined for a locally manufactured product over a global brand included biscuits/chips/snacks/cookies (52%), tea/coffee (45%), dairy products (44%), mineral water (43%), and instant noodles (40%).
Globally, categories that saw the most notable swing in preference away from local brands compared to previous survey conducted in 2015 include mineral/bottled water (down 22 percentage points [pps] to 30%), instant noodles (down 21 pps to 21%), pet foods (down 13 pps to 12%), carbonated soft drinks (down 12 pps to 18%), and baby wipes/diapers (down 11 pps to 7%). The hair care (18%), alcohol (16%) and baby food/formula (10%) categories all saw a 10 pps decline in preference for local brands from 2015.
“In today’s world of hyper-connectivity and globalization, consumers have a wider array of product choices than ever before,” observes Regan Leggett, Head of Foresight and Thought Leadership, Growth Markets, NielsenIQ. “Importantly, consumers also have greater access to global brands than they have in the past, thanks to factors such as expanding distribution, e-commerce offerings, and modern trade retail channels. As a result, we’re seeing a swing in preference toward the big multinationals. Other factors at lay include consumer perception around quality, particularly in high involvement categories such as baby care.”
At a regional level, market nuances were evident, with consumer preference for global versus local brands, varying widely within a number of categories. In the dairy category, consumer preference for local brands was much more pronounced in Africa and the Middle East (73%) and Europe (66%) compared to the global average (54%). In the biscuits/chips/snacks/cookies category, consumer preference for local brands was prevalent in Southeast Asia (50%), Africa and the Middle East (41%), and Latin America (41%) compared to 32% globally. In Europe, consumers were much more likely to opt for local alcohol brands compared to the global average (22% vs. 16%), while Southeast Asian consumers showed stronger affinity for local instant noodle brands compared to the global average (39% vs. 21%).
“The variation across regions illustrates the relative strength of local manufacturers within specific categories, particularly where they are appealing to local consumers’ tastes,” emphasizes Leggett. “In Southeast Asia, for example, where noodles are a staple in consumers’ diets, local manufacturers have been able to maintain a stronghold on the category. Similarly in European markets, locally sourced dairy products are perceived to be of a higher quality than imported products.”
Leggett concluded: “In an increasingly global world, the battle of the brands comes down to understand consumers’ evolving needs, behaviours, lifestyles and tastes. Any brand, be it local or global, that is able to tap into these consumer preferences will be best-placed to win the hearts and minds of consumers in the future.”
