Inflation, crunched cash flows, worsening law & order all these factors have not been able to depress what is called the only 'Entertainment avenue' available to the fun-starved society of Pakistan.
According to a rough international survey done recently, out of approximately 15 crore people, there are nearly 7 crore children (age between 5-16 years) in Pakistan which makes to nearly 46% of the total population.
This segment of population along with being very enticing for marketers for their products due to its enormousity is also quite challenging because of the peculiarity of its consumer (children) behaviour, which is sometimes very bizarre & difficult to judge.
MARKET SIZEThere are a variety of food products available in Pakistan for children. In Pakistan the confectionery market consists of candies, toffees, gums & jellies. It is difficult to estimate the market size in terms of either units or weight because of the numerous varieties of products available in the market.
One thing to be noted is that besides a very low quality, poorly packaged products there are lot of 'Forged' or 'Copied' products in the market. These forged copies are of mostly of the well-known products of Hilal, CandyLand & Pearl Confectionery (Pvt) Ltd.
This is more prevalent in the Punjab region. This stock is not only freely available but gives a good margin to the retailers. But even due to the presence of this forged stock, the sales of the real products are quite good, as considered by themselves.
CATEGORY-WISE VIEW
CANDIES: The candies comprise nearly 35% of the total confectionery market in Pakistan. Hilal was considered to be the leader in this category with its Aamrus, Hajmola, Khopra & Coolyaar products. But now today's prevailing conditions Sweet Hill's range with Cow candy, Butter Up & Dr Milk, Kidco's 4Ever & Mayfair's Creamers' range have been quite successful. CandyLand with its flagship brands like Fanty & Cola also holds considerable share of the category.
TOFFEES: Toffees' share in the total market share is also 15%. The major product is Cadbury's Éclairs.
GUMS: The category's share in the market is nearly 30%. The category of gums has started selling in good terms. The brand 'DING DONG' of Hilal has virtually become the case study in Pakistan market due to its tremendous Brand recall & Equity.
It is the largest selling brand in all the categories of confectionery in Pakistan market. Previously the only mentionable name was of Mayfair Bubble but in the past 5-6 years, CandyLand launched Dyno Gum, Fresh & Juicy, Sim Sim, Campus, B.P. has launched Stick Gum, Hilal launched center filled bubble 'Fresh Up' & Kidco recently re-launched its center filled bubble with the brand name of 'Centro'.
JELLIES: The smallest contributor to the market share with an approximate share of 8 - 10%. CandyLand was the market leader in this category now Hilal & some others have also launched jellies. Mouth Freshener, Meva (Dry Fruit), & Chalia.
The largest of the unbranded or local confectionery segment, its share among the target audience ranges to between 40% in the unbranded sector. Various variants like sweet chalia, supari, Pan masala, Meva (Dry Fruit) & flavored supari etc cater top various tastes.
Hilal is again the category leader with Tulsi & Rasily. After that many brands were emerged as a new entrants in this category like Tasty, GoGo, Naz & Kashmiri Gold Meva. A lot of other small brands have gained strong hold in the regions & segments that are further bifurcated in ages, demographics & even gender.
CONSUMER: The main consumer of confectionery products is a child. Nearly 80% of the total confectionery products are bought & eaten by children. The percentage even increases to 90% in case of candies & toffees. The rest are consumed by people of higher age.
Most of the children have only limited money at their disposal to spend out of which they have to make a choice among the various products available in the shop including candies, toffees, bubble gum, jellies, ice-creams, cold drinks, lolly pops, chips etc.
THIS CHOICE SOLELY DEPENDS UPON:
1. The availability & amount of money in his pocket.
2. His/her liking (Brand Loyalty)
But the previous factor has more weight than the last one.
DEMOGRAPHICS:
-- Ages 4-16 years
-- Both Gender
-- All income groups (mostly lower to middle income)
INDUSTRY ENVIRONMENT: Confectionery, like in other parts of the world, in Pakistan also one of the oldest & most competitive of the industries.
With brand preferences & brand names evolving & going into oblivion, the Pakistan confectionery market has seen the brands form AB to CandyLand, Hilal, B.P. Mayfair, Sweet Hill, City Boy, Kashmiri Gold, & KIDCO. As happened yesterday's leaders have been taken over today's innovators.
Being strictly in the FMCG sector, the main trade is done through the main & the regional wholesale market that have sprout up in every nook & corner of the cities due to the later's spread & ever-growing population. The idea is usually of filling up of the wholesaler who in turn then feeds the smaller retailers of the area.
With the downturn of the economy & gradual shrinking of the purchasing power of the lower to the middle class income group (main consumers of the local confectionery), the market has been the smaller SKUs & even low priced products.
The winner is one who is INNOVATIVE - who churns new & original products at regular intervals of time. This timing can be either launching of a new category or grabbing the space of the brand leader.
As has happened with the other categories, the acceptance of the confectionery in our households has also opened the doors for this to be taken as cottage industry. This is the main origin of the 'Fake', counterfeit or even regionally strong brands.
Most of the brands are short-lived & the companies behind them also did not focus on them. Mostly & mainly the idea has been to "Reap the short-term windfalls" rather than focusing on the long-term. This attitude can be due to either presence of only local companies who does not have the professional & strategic thinking behind their operations; tough competition & worsening economic conditions.
Most of the organisations are distributor & dependent who usually follow the trader approach of dumping the stocks instead of real distribution & getting Instant Cash. The usual margin for all the sectors of the trade ie the Distributor & the Retailer ranges between 12 to 15% that can occasionally go up in case of a special Trade Offer or as a result of competitive strategy by a Company.
There is a strange trend of 'Extra Discounts' on the Official Trade Price of the company. This extra discount is now considered to be a legitimate right of theirs by the retailers & the wholesalers.
The growth of competition has made the confectionery a necessary item of all kinds & categories of retail. Be it a Pan shop, Kiryana, Chemist, even Sports goods all are now having the confectionery ranges with them.
The inception of the coins have given the confectionery a new segment to explore - A class outlets& super markets instead of keeping the cash, give the 1 or 2 Rs confectionery to their customers, who also feel easy rather than having the trouble of keeping the 'Chawannian & Atthannian'.
FUTURE SCENARIO (EXPECTATIONS)With the growth of information & competition, the future looks very interesting. The margins will be in the tight band of 15%, the thing to matter will be the volume achieved, where the real distribution will play the decisive role. More so, the companies will now to have at least one strong brand (preferably Brand Leader) in each category that can act its cash cow.
More organised Marketing planning & sales strategies will be seen & most importantly, as has happened in other sectors & other countries as well, the enormousity & potential of the industry will surely entice foreign brands to jump in. The survival will thus be of the fittest.