Consumers around the world, including Malaysians are displaying a growing preference for global brands rather than locally manufactured products, said a new study by performance management company, Nielsen.
The annual Nielsen Global Brand-Origin Report highlights consumersâ€™ preference for and sentiment towards products manufactured by local manufacturers versus large global or multinational brands across 34 categories. 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.
In Malaysia, at least nine in 10 consumers prefer global brands when it comes to baby products â€“ baby wipesÂ and/or diapers (90%) and baby foodÂ and/or formula (87%). Other categories where Malaysian consumers showed low preference for local brands include pet foods (14%), feminine care products (15%), vitamins and/or supplements (16%) and skin care products (18%).
On a global scale, consumer preference for a global brand was also strongest in the baby wipes or diapers and baby food or formula categories – where just 7% and 10% of global consumers, respectively, said they prefer to buy brands from local manufacturers.
Top 10 products Malaysian consumers would buy from global manufacturer
On the contrary, categories where Malaysian consumers were more inclined for a locally manufactured product over a global brand included biscuits, chips, snacksÂ and/or cookies (52%),Â tea and/or coffee (45%), dairy products (44%), mineral water (43%) and instant noodles (40%).
Top 10 products Malaysian consumers would buy from local manufacturer
Globally, categories that saw the most notable swing in preference away from local brands compared to the previous survey conducted in 2015 include mineral and/or 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 and/or diapers (down 11 pps to 7%). The hair care (18%), alcohol (16%) and baby food and/or formula (10%) categories all saw a 10 pps decline in preference for local brands from 2015.
â€śIn todayâ€™s world of hyper-connectivity and globalisation, consumers have a wider array of product choices than ever before,â€ť Regan Leggett, head of foresight and thought leadership, growth markets at Nielsen said.
Importantly, Leggett said, 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, there is 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 and/or 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% versus 16%), while Southeast Asian consumers showed stronger affinity for local instant noodle brands compared to the global average (39% versus 21%).
The variation across regions illustrates the relative strength of local manufacturers within specific categories, particularly where they are appealing to local consumersâ€™ tastes. In Southeast Asia, for example, where noodles are a staple in consumersâ€™ 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 added, â€śIn an increasingly global world, the battle of the brands comes down to understand consumersâ€™ 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.â€ť