BANGALORE : Walk into a city supermarket and you would see
brands from Hindustan Lever (HLL), P&G, Colgate and Godrej still
dominate the soaps, detergents and personal products shelves. But if
you think these traditional brands are perched comfortably there, you
could be wrong.
Pressure is building on them, from a range of upstarts,
and one indication of this came earlier this week, when HLL announced
a none too impressive financial performance for 2003.
Several marginal players are today thinking big. The
Rs 500-crore Anchor group, better known for its exploits in the electrical
devices business, is now anchoring itself as a FMCG player. The company,
which has built a fairly successful toothpaste brand, launched a talcum
powder a few months ago, and will shortly be getting into the highly
competitive soaps and shampoo businesses.
Ajanta India , one of the world's largest manufacturers
of clocks, recently announced in Bangalore the launch of a range of
products including soaps, shampoos, talcum powder, toothpaste, toothbrush,
hair oil and shaving cream. The company already has a production facility
in Morbi in Gujarat and is now planning another in Himachal Pradesh.
LG (India) Household & Healthcare, part of the
South Korean LG group, appears to be preparing to replicate the group's
extraordinary success in the consumer durables business in India with
its recent launch of as many as 30 products in the oral care, hair care,
skin & body care and kids care segments.
Marico has just extended its Parachute hair oil brand
to shampoos. The Sahara group is reported to have big plans in FMCG.
Bangalore-based nutraceuticals company Sami Labs is preparing
to introduce a range of skin care and hair care products.
The list is long, and getting longer. And that despite
markets like soaps, detergents, talcum powder and shaving cream stagnating
for some time.
Established players are inclined to dismiss the upstarts.
"Many have come into the sector in the past and have been forced
to leave. People think margins are good in this business and it's easy
to build brands. But that isn't so at all," says Hoshedar K. Press,
executive director & president of Godrej Consumer Products.
The newer players see it differently. Anchor group
CEO Sashi Nair says there is room for players in such seemingly intense
markets if one adopted smart strategies. "If you look at the shampoo
segment, the competition is very divided. One can pick certain price
points, and then compete hard. Same is the case in soaps. There could
be 30 different soap brands in the market, but there would still be
room for manoeuvring," he says.
Indeed, that's exactly what explains Nirma's and CavinKare's
amazing exploits in areas like detergents, shampoos and fairness creams.
Both of them came with products with unique value propositions. Anchor's
toothpaste success amidst degrowth in the segment owed a great deal
to its `vegetarian' toothpaste proposition. Ajanta is looking at a low-price
Sami Labs' plan is to bring science into cosmetics
by providing for clinical documentation and biostandardisation, which
would enable exact measurement of impact in biological terms of things
like skin lightening and skin/wrinkle conditioning.
Several of the new players also have the advantage
of deep pockets and/or established distribution networks.
In sum, the big guns of FMCG have quite a challenge
before them. And the consumer looks set to have lots more choice.