Sales of beauty and personal care declined in 2024. This decline was primarily due to a reduction in consumption as households were faced with a rise in living costs and a sharp rise in prices, with Sri Lanka continuing to experience elevated inflation. As well as economic considerations, the market in Sri Lanka is also being shaped by a combination of changing consumer preferences and growing awareness of personal health and wellness.

The population of Sri Lanka is predicted to increase due to changes in net migration and natural change, standing at a total of 24.5 million citizens by 2040. By 2040, the most people will be middle-aged (aged 45-64). Generational cohorts will continue to influence consumer expenditure based on their specific purchasing habits and unique demands. Major cities will continue to develop and expand as more consumers settle here, while Colombo will remain the largest city by 2040.

Tissue and hygiene in Sri Lanka grew steadily in 2024 despite inflationary pressures and macroeconomic challenges. Sales of tissue and hygiene products increased both in value terms and volume terms, supported by innovation, urban consumer demand, and the recovery of institutional and away-from-home channels. However, higher production costs, driven by increased raw material prices, contributed to rising retail prices, which in turn dampened demand in more price-sensitive groups. Premium and eco

Home care in Sri Lanka evolved in 2024. Economic trends and health and hygiene awareness shaped demand. Overall, retail volume sales rebounded, as the average retail current unit price decreased, after hikes in 2022 and 2023. As inflationary pressure fell sharply, players lowered or slowed price increases to pique the interest of consumers. While price and essentials were the key factors for many consumers, some traded-up to products offered in modern formats, such as liquid, gel and electric.

Economic freedom is repressed and corruption is endemic, whilst state finances remain weak. Although deflation has taken some pressure off households, recession continued in 2023, but tourism could be supportive. Population expansion will boost the consumer market and discretionary spending could rise, but inequality is widening and higher educational attainment is very low. Mobile use is growing and prospects are bright for some technology sub-sectors, but 5G rollout has faced further delays.

Hot drinks saw strong growth in Sri Lanka in 2024 backed by an improving economy and a large influx of tourists. The search for convenience boosted sales of tea bags and instant coffee, while an increasing number of consumers looked for healthier hot drinks such as products with functional claims. The competitive landscape has been influenced by fluctuations in the cost of raw materials alongside an improvement in the economy, as well as an increasing focus on healthy and sustainable products.

Sales of soft drinks saw strong growth in off-trade volume terms in 2024 thanks in part to improvements in the local economy. Consumers are showing an increasing inclination towards healthier options – such as reduced sugar and functional products. Larger companies expanded their product lines to include natural ingredients, while smaller companies focused on sustainability and eco-friendly packaging. The ongoing expansion of e-commerce can be attributed to the growing desire for convenience.

Sales of cooking ingredients and meals in 2024 were heavily influenced by several important aspects. Sri Lanka's economic and political unrest negatively impacted consumer purchasing decisions, while there was a notable drop in store visits during the monsoon season. However, a slow but steady decrease in inflation stimulated a modest positive trend in higher spending. Aggressive pricing helped certain grocery retailers achieve success and boosted the popularity of private label products.

In 2024, staple foods in Sri Lanka saw shifts in consumer behaviour due to economic factors like inflation and political unrest. These pressures pushed consumers towards cost-effective choices, such as bulk buying and private label brands, boosting supermarket sales with aggressive pricing. As inflation eased, consumer activity rebounded, leading to increased demand for staples and more frequent shopping, highlighting the influence of price and economic conditions on consumer preferences.

Consumer health has seen a recovery in the supply chain in 2024 with most products available in pharmacies again, although government supplies remain uncertain. Ayurveda has expanded in part due to its affordability and the rising cost of imported consumer health products. The National Medical Products Regulatory Agency plans to use special labelling to safeguard consumers and halt the sale of fake pharmaceuticals. Despite supply issues the quality of pharmaceuticals has improved in Sri Lanka.

Milk formula and growing-up milk formula remain the main focus of baby food in Sri Lanka. However, sales of milk formula are hindered by the fact that most mothers breastfeed beyond their children are one year old, with the majority breastfeeding during the night up to 18 to 24 months. Prepared and dried baby food remain small categories as mothers do not like feeding prepared packaged food to their children as they believe fresh food offers superior nutrition and quality. Moreover, a further hi

Snacks in Sri Lanka is seeing a return to retail volume growth amid a shift to healthier options and smaller packs in 2024. Players are trying to limit prices while others launch new products to lure consumers. Small local grocers lead distribution but modern physical and digital formats are gaining ground. Collaborative decision-making has become a technology that addresses economic obstacles, offers solutions and propels the Sri Lankan economy, to the benefit of snacks players and consumers.

In 2023, Sri Lanka saw modest growth as rampant inflation hindered any concentrated economic performance. Per capita disposable income experienced growth of less than 1%. Income inequality remained high, as well as the gender income gap, as men had 157% larger disposable income on average than women. Consumer expenditure also increased less than 1%, as consumers took drastic measures in the face of diminished purchasing power due to rampant inflation and consequent price increases.

In 2023, alcoholic drinks in Sri Lanka is facing significant challenges due to stringent regulations, high tariffs, and economic issues. Despite these hurdles, Lion Beer has maintained a dominance of 94% market share, although it experienced a decline in overall sales. Increased beer prices and shifting consumer preferences have contributed to this downturn. Political and economic factors, including inflation and rising import duties, further disrupted the industry, leading to a trend towards mo

The commodities country overview provides comprehensive data on production, consumption and price trends on key commodities markets. The commodities overview in Sri Lanka covers production and consumption trends in agricultural commodities, energy products, electricity, metal products as well as an overview of key economic and business environment trends.

In 2023, Sri Lanka's tobacco sector faced substantial challenges due to significant price hikes for cigarettes amid economic recession and import restrictions. These factors led to a marked decline in smoking rates, especially among lower socioeconomic groups, resulting in significant financial losses for the tobacco industry. The price surge encouraged illicit trade, exacerbating the industry's woes. Concurrently, the vaping sector rapidly gained popularity as a cheaper alternative to tradition

In 2023, Sri Lanka’s economy contracted by 2.0%, despite an IMF bailout. GDP per capita remained notably lower than the Asia Pacific average, owing to high unemployment. Furthermore, inflation declined due to lower commodity prices and stricter monetary policies, with further reductions expected in 2024. The economy is predicted to grow in 2024, as the bailout programme bears fruit, but potential political reform due to government elections could present possible obstacles to policy implementati

Asia Pacific remained the largest global producer of food, beverages and tobacco in 2021, with sales valued at USD3,809 billion. With the release of pent-up demand, the industry’s turnover witnessed an increase in 2021. Going forward, expanding domestic markets and rising productivity are expected to stimulate the industry’s growth. However, with tightening global food supplies amid climate change and geopolitical conflicts, challenges persist, especially for major regional food importers.

With a turnover of USD365.8 billion in 2021, Asia Pacific was the world’s second largest region for recreation, entertainment and arts. Over the next decade, the region’s entertainment industry is poised to grow at the fastest rate, nearly closing the gap with Western European turnover levels by 2030. Recovering tourism, growing investments and economic expansion are set to drive the entertainment industry’s growth in Asia Pacific, with China remaining in the lead.

With production of USD967 billion, Asia Pacific was the largest rubber and plastic producer globally in 2020. Regional production of rubber and plastic products remains highly concentrated in China, Japan and South Korea. Over 2021-2030, Asia Pacific is projected to be the second fastest growing region, driven by a strong economic recovery from the Coronavirus pandemic, rapidly growing manufacturing and construction sectors, and relatively low production costs.

Asian Pacific economies were hard hit by COVID-19, leading to setback in construction activities in the first half of 2020. Robust Chinese recovery, however, boosted construction output in the second half of the year. Heavy infrastructure investments, rebounding consumer and business confidence boost demand for construction through to 2030. Moreover, robust expansion in global demand for building materials boost construction costs, leading to the industry’s rising production value.

Asia Pacific, with a value of USD916 billion, is the largest forestry, wood and paper goods producer in the world. Forecasts for the region’s industry remain positive for 2021-2030, due to developing economies and rising population. However, the biggest changes are happening inside the region as surging India and Southeast Asian countries attract significant investments in production giving increasing competition to the leading China.