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Cleaning sample report


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Research of cleaning products market in Russia. Sample report, study dated October 2011. Full and updated report can be provided upon request

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Cleaning sample report

  1. 1. Cleaning products market research BRIF Group| | October 2011
  2. 2. Table of contents Project scope 3 Key findings and conclusions 4 Distribution 6 Offered product lines: existing product groups (market niches) of cleaning products in Russia 7 Offered product lines: other products distributed in the same channels as cleaning products 9 Product groups competing with cleaning products/technologies that are distributed by the largest distributors 10 2BRIF Group |
  3. 3. This report is a part of a more comprehensive study. The full report contains 25 top cleaning products distributors in Russia selected using the following criteria: 1. They sell cleaning products to customers in various sectors, 2. They sell cleaning materials in specific market segments, 3. They have a strong market share and/or strong presence in specific market segments. Distributor list includes data on top 25 distributors in Russia: company name, website address, address, contact person, phone, fax, email, market share estimation, regions of supplies. Please email for purchasing the full version of this report. The research can be updated upon request. Project scope Project scope was defined by an EU producer of cleaning products that was considering an opportunity to launch sales in Russia. Project scope includes analysis of Russian market trends based on expert interviews and desk research: 1. Market survey of cleaning tools, products and materials. Market development steps, trends, major differences from European market, professional associations and their tasks. 2. Distribution options: major and minor distribution channels for local and foreign products, product flows between companies of different profiles existing in the market (e.g. distributors, wholesale, contracting companies etc.). 3. Offered product lines: existing product groups (market niches) of cleaning products in Russia; other products distributed in the same channels as cleaning products; product groups competing with cleaning products/technologies that are distributed by the largest distributors. BRIF Group | 3
  4. 4. Key findings and conclusions (1/2) Sales volume of cleaning companies amounted to USD 1 billion in 2010 in Russia. (1, 2) Moscow currently holds significant market share of approximately 50% of Russian cleaning services because the market started to develop from this region 10+ years ago. (2) Cleaning services in St-Petersburg began to develop in 2003-2004. (2) Cleaning services in other regions began to develop later due to regional expansion of Moscow retail chains that had been outsourcing cleaning services in their Moscow supermarkets and head offices. (1) Demand for cleaning services will probably increase by 20% in 2011. (1) Demand for cleaning products and tools will probably increase by 40% by 2014-2015, according to Procter and Gamble’s forecast. (3) Cleaning market growth drivers are: • Delayed demand from the companies that preferred to insource cleaning services during the 2008 crisis; • Demand in markets which have reached pre-crisis financial status – e.g. hotel market, construction market. (1) Owners of offices and commercial property consume 80% of cleaning services in Russia. (4) Cleaning companies are not using cleaning technologies (neither cleaning supplies, nor cleaning equipment) as competitive advantages in their promotion materials. (5) Needs for professional cleaning both inside and outside buildings are higher in Russia than in Europe, due to: 4 Demand for cleaning products and tools will probably increase by 40% by 2014-2015 in Russia.  More severe climate (longer winter);  Roads in winters are often scattered with chemicals (not gravel) which are brought inside buildings on shoe soles. Interest to Green cleaning* is emerging in Russia. The topic appeared in Russian mass media in 2006 and is discussed until now. However, there are no cleaning companies specialized in Green cleaning yet. The most advanced cleaning companies apply standards HACCP and INSTA 800 (1, 5, 6, 7). Sources: (1) Cleaning market review, (2) review, (3) «Stationary» magazine, products review, (4) Websites of 10 leading Russian leading companies, (5) Article at, (6) Hazard analysis, Wikipedia, (7) Article at BRIF Group | 52% 28% 20% Russian market for cleaning services (4) Moscow St-Petersburg Other cities
  5. 5. Key findings and conclusions (2/2) Processes and performance Salaries amount to 75% of costs within Russian cleaning companies. Wrong choice of cleaning equipment and materials increases labor intensity. Therefore training on correct choice of cleaning equipment and materials is crucial for cleaning companies business success. (1) Such training is usually provided/ sponsored by cleaning tools and supplies producers and distributors. This is an efficient way to communicate with customers (cleaning companies) and to increase their loyalty to cleaning products. Locally produced cleaning supplies are approximately 20% cheaper than imported. (2) Local producers cannot compete with Western brands within specialized market niches, for example, protection of floor coating. (2) There are 2 major cleaning industry associations in Russia, both of them established by producers, distributors and other companies operating on cleaning market (3, 4): 1) Association of Russian Cleaning Companies (ARUK) established in 2000. ARUK participates in development of industrial legislation in cooperation with the Government of Russian Federation, in implementation of national and regional industrial projects; 2) International Cleaning Companies Association (ICCA) established in 2002. ICCA promotes cleaning in Russian regions, introduces international experience and achievements in Russia, provides legal support to its members. Distribution There are less than 100 companies that distribute cleaning supplies and tools in Russia. Some of these companies concentrate on equipment distribution, or cleaning services, or are focusing on mono brand sales. 5 Locally produced cleaning supplies are 20% cheaper than imported and are usually of lower quality. Sources: (1) Interview with Alexander Doroshenkov, manager Vileda Professionals, (2) CleanNow forum, (3) ICCA members, (4) ARUK members Example of cleaning tools promotion (1): Vileda Professionals provides free training to cleaning companies management on efficient choice of cleaning equipment. Vileda Professionals provides free training to cleaning companies field workers on cleaning technologies use. Vileda Professionals has 2 training managers as members of staff in Moscow. BRIF Group | 75% 25% Russian cleaning companies costs structure Salaries Other
  6. 6. Distribution 6 Foreign and local cleaning materials are usually distributed via specialized distributors. Exclusive distributor deals are frequent on the market. Sources: (1) Interview with Ekaterina FEdotova, manager Vileda Professionals, (2) Tana Professional, (3) SpetsSintez, (4) Creoline Local producers Foreign producers Distributors Contracting companies 1 2 Vileda has a representative office in Russia, but is not selling directly to cleaning companies. Sales are implemented only via distributors. (1) 1 2 3 4 Minor channels Major channelsRussiaOther countries End customers 4 5 3 5 Large contracting companies are able to directly purchase supplies, tools and equipment from largest producers. Promop is a Russian company producing cleaning tools. It also distributes Tork & Vileda. CJST “MS FinStyle” is an exclusive distributor in Russia of Tana Professional cleaning supplies, ICCA member. (2) Specsintez and Creo distribute their chemical products via dealers. (3, 4) BRIF Group |
  7. 7. Offered product lines: existing product groups (market niches) of cleaning products in Russia (1/2) 7 Distributors most frequently include 2 brands in each product group 3 major product groups within Russian cleaning market supplies are: cleaning supplies (or products), daily cleaning materials (or tools), cleaning equipment. (1, 2) Typical product groups of large cleaning products distributor include: Cleaning equipment Cleaning tools Cleaning supplies ■ Cleaning carts and buckets ■ Sponges, brushes, mops etc. ■ Wiping materials ■ Means of individual protection (gloves, glasses etc.) ■ Mudguards ■ Professional cleaning supplies (so called “chemistry”) ■ Cleaning supplies and materials for kitchens ■ WC hygienic products and equipment (liquid soap dispensers, towels dispensers, liquid soap, tissues etc.) ■ Cleaning equipment (vacuum cleaners, washing and drying machines etc.) ■ Ceaning circles for floor washing machines and spare parts for vacuum cleaners Sources: (1) Interview with Konstantin Zemlyakov, Cleaning Director, Premier Service (2) CleanNow, (3) websites of top cleaning materials distributors Distributor Cleaning equipment Cleaning tools Cleaning supplies Clean Market Ready Machines Vileda •EcoNobel •Hygiene products (Lime, Tork) Clean Master •Johnson Diversey •Rubbermaid Commercial Products Vileda Professional, 3M, Kimberley-Clark Professional, Rubbermaid Commercial Products 3M, Kimberley-Clark Professional, Rubbermaid Commercial Products Axioma Trading •Cleanfix •Vileda •SpetsSintez •Hygiene products (Lotus, Tork) Vikont •Columbus •Gmatic •Vileda Professional •Unger Buzil, Farmos, Ecolab, Johnson Diversey, Lotus, Tork, Kimberley-Clark) Table 1: Sample product / brand portfolios of leading distributors BRIF Group |
  8. 8. Offered product lines: existing product groups (market niches) of cleaning products in Russia (2/2) 8 There are 393 disinfectant suppliers in Europe (4), and only 6 major disinfectant suppliers operate in Russia. (1) Disinfectants are sold as a separate product group by few distributors in Russia, e.g. Detergo, Axioma Trading, Alians Plus. Examples of cleaning product brands positioning in different market segments (11, 12) Premium Medium Economy Franklin, Ecolab, Kiehl, Hagleitner, Envirodri, Promop Spartan, local production Quantity of disinfectants’ suppliers vs. size of population Disinfectant brands Products profile Uralstinol Bio Medical institutions, food production, home use (5) Orion Medical institutions: tools, surfaces, skin, specialized (6) Velt Group Food production, medical institutions, transport, personal hygiene etc. (7) Metropolitan 168 Distribution of Chinese disinfectants (8) Lad Company S.R.O. Industrial chemicals (9) Bentus Laboratories “Sanitelle” antiseptic hands gel (10) Table 2: Activity profiles of companies selling disinfectants in Russia Sources: (1), (2) Wikipedia, (3) Wikipedia, (4), (5) Uralstinol Bio, (6) Orion-Med, (7) NPO VELT, (8) Metropolitan 168, (9) LAD Company, (10) Bentus Laboratories, (11) Forum CleanNow, (12) Forum CleanNow Prochem, Butchers, Chemspec, Vileda Russian market is less saturated with disinfectant brands than EU markets BRIF Group | 6 7 10 11 19 20 49 50 112 142,3 8,3 10,8 60,4 47,1 64,7 81,8 16,6 62 0 50 100 150 Russia Austria Belgium Italy Spain France Germany Netherlands UK Population, mln people (2, 3) Disinfectant suppliers (1)
  9. 9. Offered product lines: other products distributed using the same channels as cleaning products 9 Cleaning products are often added to office suppliers product portfolio. Cleaning products distributors, in their turn, add various non-cleaning products to their offers. Office suppliers Retail “stationary” companies specialized in corporate office supplies usually add cleaning products to their product portfolio alongside with household appliances, food, souvenirs, dishes and house wares. (1) Cleaning products sold via “stationary” companies are usually non- professional and consist of: cleaning supplies (“household chemistry”) and tools. (1) Mass promotion of professional cleaning products started around 2007 in Russia. Cleaning carts were introduced in 2008. (1) 75% of non-professional cleaning products are imported (1) Cleaning tools ■ Tools for dry and wet floor cleaning, ■ Accessories for cleaning of windows, ■ Tools for cleaning of open air territories ■ Etc Cleaning supplies ■ Hand washing products, ■ Floor and carpets cleaning products ■ Window and furniture cleaning products ■ Products for canteen and dishes cleaning ■ WC cleaning ■ Laundry ■ Air fresheners Cleaning products distributed via “stationary” suppliers Product groups Sample distributor •Books and posters •Materials/equipment for cleaning industrial zones (blades, scrapers, squeegees, brushes, buckets etc.) •Trash bags •Ashtrays and trash bins •Hand dryers Azbuka Chistoty •Cleaning tools for glass Cleanfix •Household (non-professional) cleaning supplies and tools Vikont •Tools for cleaning outside (in the street) •Ventilators (fans) and heaters •Office and hotel interior design elements Vse dlya uborki •Shoe cleaning machines •Snow removing machines •Laundry supplies and materials Detergo •Materials for interior design •Table cloths and napkins Alians Plus •Glass mats Axioma Trading Table 3: Product groups distributed via cleaning products distribution channels Sources: (1) «Stationary» magazine, (2) web-sites of top cleaning materials distributors and stationary distributors BRIF Group |
  10. 10. Product groups competing with cleaning products/technologies, that are provided by the largest distributors 10 Consistent distribution policy, above average product added value and clear communications with distributors and contracting companies resulted in Prochem’s winning Russian market (2009-2010) Chemspec Prochem Product: Chemspec is considered a high quality brand, premium segment. Cleaning experts appreciate its product portfolio, including niche products such as enzyme stain remover, RX All Purpose removing even old blood spots. Chemspec products need to be carefully outwashed. It requires more powerful cleaning equipment than an average contracting company uses in Russia. Chemspec Formula 90 caused cough and throat spasms to may users. (1) Imitation (forgery) of Chemspec products by Chinese producers resulted in a negative impact on product perception by customers. (2) Product: Prochem is considered a high quality expensive brand, premium segment. Prochem’s competitive advantages consistently promoted by Radnik are ”quality, availability, regular supplies, additional services from the distributor”. (3) Distribution: Chemspec was distributed by Training & Resource Bureau (TRB), cleaning supplies distribution was not its core business. Chemspec’s client service was poor (e.g. client manager would be on vacation without a substitute; products were unavailable regularly and average delivery terms of 2 weeks were uncompetitive. (3) Another distributor Rotex cleared Chemspec stocks in 2009. Distribution: Prochem’s leading distributor Radnik used to concentrate on selling supplies for regular cleaning. (3) Price (3): Textile Rinse 5L RUR 614.25 dilution 1:100 Formula 321 Traffic Lane Cleaner RUR 1166.25 dilution 1:32 no wool-safe sign Concentrated Liquid Defoamer 5L RUR 1064.25 dilution 1:200 Browining Treatment 5L RUR 463.50 ready to use Proce (3): Fibre & Fabric Rinse RUR 973.00 dilution 1:2—1:30 Prespray Gold RUR 1429.12 dilution 1:32 wool safe Liquid Defoamer RUR 1375.84 dilution 1:500 Browning Prescription RUR 916.96 dilution 1:5, 1:1 Prochem’s products have higher prices and higher concentration, than Chemspec’s. (3, 4) Present market position: Currently chemspec is distributed in Russia by another company Procarpet.(5) Present market position: Currently Padnik continues to distribute Prochem in Russia, delivers seminars and consults contracting companies online. (4) Sources: (1), (2), (3) CleanNow, (4) Radnik, (5) Procarpet BRIF Group |