Parallel Markets

Many brand owners and multinationals does not really appreciate the word “Parallel”, because in the business world, it has nothing to do with mathematics. Parallel business have been present since forever in many products categories mainly FMCG (fast moving consumer goods), it is also called Re-Export, Grey market or Triangular business.

I have worked in the Parallel world for quite many years, where you will be astonished how business is ran and the quantities of goods that are moved every year from country to another and the incredible prices at which these goods are offered, sometimes you can buy a product below the cost of a local distributor, of course when I say you can buy, I mean large quantities, pallets or containers.

For many years, multinationals tried to fight the parallel business by coding their goods for each markets, differentiating sometimes brand names or even changing some layouts, offering different sizes of the same product with different price structures for each market, focus on heavy promotions, etc… and this never stopped the parallel of growing year after year.

Sara Lee is a multinational with a Body Care division, 2 of their many worldwide known brands are Radox and Mon Savon.

During my visit to Prague last week and while strolling in a retail shop, the price of a Radox shower gel flashed into my eyes, while I am used to buy almost the same products from Mon Savon for a cheaper price in Lebanon. Below is a comparison table showing the price difference between the 2 products.

You can also check the packaging which are almost similar and the sales tickets from Tesco for Radox and Géant for Mon Savon.

So the conclusion of the above is that the multinationals are sometimes blessing the parallel indirectly and this is how new parallel business is born everyday!