While large companies have the advantage of economies of scale, enabling them to offer products at lower price points, consumers still demand variety and choice, enabling strong competition from smaller players. This video from Euromonitor International examines realistic expectations for large companies’ market share across various industries and markets.
Learn more about Euromonitor’s Center for Analytics, Modelling and Innovation (CAMI) here.
Of equal, and possibly more interest, for SDR and our clients: what does this analysis tell us about small/medium privately held consumer product companies?
The Pet Products example is an interesting examination. As the preferred Investment Bank for numerous Pet Product companies, we understand the market dynamics created by a top-heavy industry. With the top 10 Pet Product companies accounting for 95% of all sales in the industry, these leaves only 5% of the market for the thousands of remaining pet product companies. While initially a staggering statistic, the relative size of global pet expenditures suggests that total pet expenditures will reach $58 billion in 2014 (source: The American Pet Product Association). This figure suggests that $2.9 billion of pet expenditures flow-through businesses not in the top 10.