Chemistry is a matter of technology – Newspaper Kommersant No. 2 (7447) dated 01/10/2023

The decrease in the activity of global manufacturers of household chemicals stimulates interest in this market and local players from other industries. Thus, the Arima company, which owns the Scarlett brand of household appliances, is planning to launch its own brand of cleaning and washing products. But experts warn of difficulties with the organization of production, high costs of promoting a new product and intense competition.

Arima, which owns the Scarlett home appliance brand, plans to enter the household chemicals market. This follows from the vacancies of the commercial director and sales director for the new project published in January 2023 in the Arima profile on the HeadHunter portal. Candidates are required to have experience with household, cleaning and laundry products. And among the duties are negotiations with clients on listing and holding promotional events, fulfilling the plan for shipments, monitoring the work of competitors, etc. Arima did not answer Kommersant’s questions on Monday.

The Scarlett brand has existed since 1996, under which factories in Southeast Asia produce small and medium-sized household appliances for the kitchen, home and personal care, the brand’s website says. Also in the Arima portfolio are the Timberk water heater brand and the Neverest fitness equipment brand. The entrepreneur Sergey Mashukov is considered the founder of the business.

Roman Kvinikadze, CEO of NappyClub (produces products for baby hygiene, cosmetics, household chemicals), considers it logical for new players from related industries to enter the household chemicals market. Against the background of a reduction in the assortment by some global players in the segment of household chemicals, niches are being vacated, says Mikhail Burmistrov, CEO of Infoline-Analytics.

After the outbreak of military operations of the Russian Federation in Ukraine, the American P&G (brands Fairy, Ariel, Tide, etc.) announced the suspension of investments and plans to reduce the local portfolio, leaving only the main goods. And the German concern Henkel (brands Persil, Vernel, Somat) is going to sell the Russian business. From January 1, 2023, the company will operate in Russia as an independent organization under the new Lab Industries brand. According to a Kommersant source, after the change of ownership, the company’s plants in the Russian Federation will not be able to use global brands.

According to Mikhail Burmistrov, Arima may face difficulties in organizing sales of a new product in retail, as different retail chains operate in the markets of household chemicals and household appliances, and it will not be possible to ensure synergy in working with key customers. Petr Bobrovsky, Executive Director of the Association of Manufacturers of Perfumery, Cosmetics, Household Chemicals and Hygiene Products, believes that Arima should focus on highly specialized cleaning products, for example, for the kitchen, or related products for household appliances: screen, glass and other surface cleaners.

Roman Kvinikadze adds that organizing the production of household chemicals from scratch in Russia, even with investments, will not be easy: in most cases, equipment is purchased from Europe, trade relations and logistics with which are currently difficult. And when choosing Chinese equipment, you need to be prepared for difficulties with its configuration, warranty and stability, he says. In addition, the reduction of investment by large Western players in production in Russia has led to problems with components, Mr. Kvinikadze notes. Petr Bobrovsky also recalls that in the category of household chemicals, at least 60% of sales come from discounted goods, which requires manufacturers to invest heavily in promotion and increase the payback period.

According to Mr. Borovsky, the Russian market of household chemicals remains very competitive: local manufacturers are increasing their share, imports of new brands from Southeast Asia and Turkey are growing. Lenta introduced household chemicals from Turkish ABC to its assortment, and the Association of Retail Companies reported a doubling of South Korea’s position in the segment of cosmetics and household chemicals.

Alina Savitskaya