Naturals now account for 41% of personal care market: Nielsen
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Mumbai: Sales of personal care products made of natural, herbal and ayurvedic ingredients, the so-called naturals category, are growing 1.7 times as fast as the overall market, consumer data analytics firm Nielsen India said.
In a report titled “But Naturally!”, Nielsen said the naturals make up 41% of India’s personal care products market by sales and is valued at Rs18,500 crore.
“We have seen that ‘naturals’ (segment) has done better than its ‘non-naturals’ cousin,” Sameer Shukla, executive director at Nielsen India, said. “Naturals contribution has inched up in the last few years, growing 4-5% in the last 4-5 years. So on an average, ‘naturals’ is eating up 1% (category share) every year. It could go up to 50% in the next few years.”
The fastest growth has come from ‘rest of urban’ towns which comprise tier 2 and 3 cities, growing 9% in value while the category grew 8.4% in the metros, Nielsen said. The biggest channels for the category has been chemist shops, that led to 19.4% value growth, the report said.
But while in 2016 hair oil, the largest naturals product category, grew 5% and toothpaste grew fastest at 20.1%, sales of toilet soaps declined 1.3% because the category already has a high household penetration, leaving little headroom for growth, Shukla said
The report identified core natural brands – whose entire brand proposition in a ‘natural’ one – as leading the growth of the category. These include brands like Dabur, Patanjali, and Himalaya whose entire product line is based on herbal, ayurvedic, or natural formulations.
Larger consumer goods firms have been introducing “natural” variants of their existing brands in a bid to enter the fast growing segment. In FY16-17, Hindustan Unilever Ltd, India’s largest packaged consumer goods maker, introduced naturals versions of shampoo brands Tres Semme and Clinic Plus, and for fairness face cream Fair & Lovely. HUL has also expanded its naturals ‘master brand’ Lever Ayush, which is currently available in South India.
“Brands with an entire portfolio of naturals have done much better in 2016 as compared to 2015,” Shukla said. “The non-core ones have not done as well, but that is historical data we are reading. The growth potential (difference) between core naturals and non-core naturals is only 2-2.5%. So non-core naturals brands can play catch up if they put adequate focus and get their communication and media channels right.”
Region-wise growth in this segment is likely to come from Delhi, West Bengal and Uttar Pradesh that will grow between 7.4% and 16.3% compared to the national average growth of 7.4% in the naturals category, led by southern Indian states, Maharashtra, Madhya Pradesh and Punjab.