The shampoo market in India grew rapidly in the three months to June, but the two largest companies in the business did not benefit too much from the growth.
The Rs1,500 crore in sales shampoo market may have remained almost flat in 2006-07 and grown just 6.6% in terms of value, but it grew by a more-than-healthy 14.4% in the three months to June, according to market research firm ACNielsen. However, Hindustan Unilever Ltd (HUL) and Procter & Gamble (P&G) India do not seem to have significantly benefited from this growth.
HUL’s share in the shampoo market registered a marginal increase from 46.9% (in terms of value) in the March quarter to 47.5% in the June quarter, while rival P&G’s share dipped from 25% to 24.8% in the same period, ACNielsen said.
Both HUL and P&G did not respond to an email query.
While HUL’s best-selling brand Clinic Plus continued to lead the segment with a 31.3% market share, the share of Rejoice, a mass-market brand of P&G, slipped from 2.6% to 2.3%. P&G’s Pantene, however, increased its share by 0.6 percentage points to 12% in the June quarter over the previous quarter. Dabur India Ltd’s Vatika had a share of 4.9% while the share of smaller brands such as Nyle and Ayur stood at 1.6% and 3.2%, respectively.
According to analysts, several companies are now eyeing the growing shampoo market and existing players are having to defend their turf by launching new products, reducing prices, and focusing on promotions. “Companies are pushing rural penetration by focusing on the sales of sachets,” said Anand Shah, an analyst with Angel Broking, a Mumbai based brokerage firm. Godrej Consumer Products Ltd recently made an aggressive entry into the market with the launch of its brand Godrej No. 1, priced at 50 paise. The launch challenged the share of value-for-money products such as Chik, owned by Chennai-based CavinKare. The latter’s share in the market fell by 0.4 percentage points to 12.7% in the June quarter.
“Sachets account for around 70% of the market. Premium brands such as Garnier have also started selling sachets to tap the growth opportunity,” said Sameer Deshmukh, an analyst at IL&FS Investsmart Securities Ltd. In the Rs400 crore by value anti-dandruff shampoo market, P&G scored over HUL. P&G’s Head & Shoulders brand, the market leader in the segment, saw its share increase by 3.3 percentage points to 54.8%. HUL’s Clinic All Clear saw its share fall by 2.4 percentage points to 39.6%. HUL launched an anti-dandruff men’s shampoo called Activsport in April-June.
“HUL paid more attention to renovation rather than innovation of products. The policy limited the incremental growth opportunity,” said Deshmukh. A research report released by IL&FS Investsmart Securities on 31 August said: “Quarter after quarter, HUL’s personal care segment, including shampoos, has proved to be a disappointment. The division’s Ebit (earnings before interest and taxes) margins are the highest among all divisions in the range of 29-30%. Consequently, the performance of this division is extremely critical.”