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Every accomplishment requires efforts and I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals. I would like to extend my sincere thanks to all of them. I would like to extend my gratitude my subject teacher Prof. J.K.Sharma for giving us an opportunity to prepare a report on Detergent Industry in India FMCG Sector and get an insight into the subject. I would like to thank him for his guidance & also for his support in completing the project. I am highly indebted to my colleagues for their incessant guidance and support while drafting the project without which preparation of this report would have been very difficult.

Mohd.Fraz Farooqui

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Indian fabric wash product market was a highly fragmented one. There was a sizeable unorganized sector,however since the last decade a lot of consolidation has taken place and now a few major players are dominating this market. Historically HLL and swastika were the first companies to manufacute detergent in india. HLL test marketed its brand surf between 1956 to 1958 and began manufacturing it from 1959 Swastik lauched Det, a white detergent powder, in 1957 India is the third largest detergent market in the world. In the 2004-05 the turnover was about 6000 crore in size and 23 lakh tones in volume. The detergent industry has shown a steady growth of 6-8 percent over the last two decades. See Exhibit 20.1 to observe the demand growth since 1990-91. In the coming future the growth rate is expected to reach 8-10 per cent mark. In india, detergent usually come under two categories: a) Detergent bars b) Detergent powders. According to estimates for.detergent bars constituted 40% and detergent powders 55% of the total market. The remaining 5% was taken up by synthetic detergents in liquid form. Washing powders were categorized into four segments - economy (selling at less than Rs.25 per kg), mid-priced (Rs.25 - Rs. 90 per kg), premium (Rs. 90 - Rs. 120 per kg) and compact (selling at over Rs. 120 per kg). The compact, premium and medium priced segments together accounted for 20% of the volume share and 35% of the value share. The economy segment made up the remaining lion's share of the market. The fabric wash industry in India was characterized by low per capita consumption, especially in rural markets. The major players in the Indian detergent market were HLL, P&G, Nirma and Henkel (through its joint

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venture with SPIC, a leading petrochemical company based in the south Indian city of Chennai).


The Indian fabric wash market consists of synthetic detergents (comprising bars, powder and liquids) and oil-based laundry soaps Although the per capita consumption of detergents in India (3.2 kg pa) is comparable to some countries like Indonesia, China and Thailand (around 2 kg pa), it is lower than in others such as Malaysia, Philippines (3.7 kg) and the USA (10 kg). The Indian detergent market is expected to grow at 7-9% pa in volume terms. The synthetic detergent market can be classified into premium (Surf, Ariel), midprice (Rin, Wheel) and popular segments (Nirma), which account for 15%, 40% and 45% of the total market, respectively. The product category is fairly mature and is dominated by two players, HLL and Nirma. Nirma created a revolution in the market by pioneering the concept of low-cost detergents. Currently, the market is highly segmented with the differential between the premium and

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Growth High consumer awareness and penetration levels will enable the market to grow at an average 8-10% per annum with slightly higher growth in the rural areas. Higher penetration stems from popularity of low-cost detergents. Hence, besides increase in per capita consumption, there is tremendous scope for movement up the value chain. HLL, Nirma and P&G are the major players in the market with 40%, 30% and 12% share, respectively. While HLL dominates the premium segment, Nirma is the leader in the popular segment. These are consumer products and their quality, price, marketing and distribution network determines the success of the units in the sector. The industry has developed both in the small scale sector and organized sector. The manufacture of detergents and toilet soaps has been deli censed The Indian personal care market is estimated to be worth US$ 4 Billion (approx. Rs. 20,000 crore) this includes Bath and Shower products, Hair Care, Skin Care, Cosmetics, Fragrances and Deodorants. Bar Soaps also has grown at a growth rate of 5% per anum over the last 5 years and stands at market size of US$ 1.5 billion (approx Rs. 7500 crores). The overall Indian personal care market has the potential to grow at 15-16% per annum and thereby double to US$ 8 billion (approx 40,000 crore) by 2012. India is third largest detergent market. Total detergent market is of Rs.6000 crores. Detergent powder is Rs.3300 crores (23 lakh tones/ annum).

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According to recent trends, liquid cleansing products are outpacing the traditional bar soap and powder cleaning products. In addition to environmental and health considerations, societal transformation has propelled the changes in the soap and detergent industry. Size The industry includes about 700 companies with combined annual revenue of about $17 billion. Major companies in the consumer sector include divisions of P&G, Unilever, and Dial. Major companies in the commercial sector include US Chemical and divisions of Ecolab. The industry is highly concentrated with the top 50 companies holding almost 90 percent of the market. The market size of global soap and detergent market size was estimated to be around 31M tonne in 2004, which is estimated to grow to 33M tonne by 2008. Toilet soaps account for more than 10% of the total market of soap and detergents. In Asia, even though the countries like China and India are showing rapid growth in the toilet soap section, the Japanese toilet soap industry is showing signs of decline due to the preference of consumers for liquid soaps. This trend is also observed in other developed markets like the US and Europe, which is adversely affecting the toilet soap industry. Market share of body wash was estimated to be around 2% in 2004 and is showing signs of healthy growth in these markets. Laundry detergents account for 40 % of the overall market, while soaps for 20 % and dishwashing detergent for 15 %.

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Hindustan Lever Ltd: Hindustan Lever Ltd (HLL) is India's largest Fast Moving Consumer Goods (FMCG) company. HLL's brands like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's are household names across the country and span a host of categories, such as soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. Presently, HLL has over 16,000 employees including over 1,200 managers. Its mission is to "add vitality to life." the erstwhile Tata Oil Mills Company (TOMCO) merged with HLL, effective from April 1, In February 2007, the company has been renamed to "Hindustan Unilever Limited" to strike the optimum balance between maintaining the heritage of the Company and the future benefits and synergies of global alignment with the corporate name of "Unilever". The detergent brands by HUL in India are Surf Excel, Rin & Active Wheel.

Procter & Gamble : William Procter, a candle maker, and James Gamble, a soap maker, immigrants from England and Ireland, respectively, who had settled earlier in Cincinnati, who met as they married sisters, Olivia and Elizabeth Norris, formed the company initially. Alexander Norris, their father-in law, called a meeting in which he persuaded his new sons-inlaw to become business partners. On October 31, 1837, as a result of
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the suggestion, Procter & Gamble was born.In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. The company began to build factories in A Monthly Double-Blind Peer Reviewed Refereed Open Access International eJournal - Included in the International Serial Directories other locations in the United States because the demand for products had outgrown the capacity of the Cincinnati facilities. The detergent brands by P&G in India are Ariel & Tide. Nirma Ltd : A Humble Beginning In 1969, Karsanbhai Patel (Patel), a chemist at the Gujarat Government's Department of Mining and Geology manufactured phosphate free Synthetic Detergent Powder, and started selling it locally. The new yellow powder was priced at Rs. 3.50 per kg, at a time when HLL's Surf was priced at Rs 15. Soon, there was a huge demand for Nirma in Kishnapur (Gujarat), Patel's hometown. He started packing the formulation in a 10x12ft room in his house. Patel named the powder as Nirma, after his daughter Nirupama. By 1985, Nirma washing powder had become one of the most popular detergent brands in many parts of the country. By 1999, Nirma was a major consumer brand offering a range of detergents, soaps and personal care products. Nirma's success in the highly competitive soaps and detergents market was attributed to its brand promotion efforts, which was complemented by its distribution reach and market penetration. Nirma's network consisted of about 400 distributors and over 2 million retail outlets across the country. This huge network enabled Nirma to make its products available to the smallest village. The detergent brands by Nirma in India are Nirma Washing Powder,Super Nirma Washing Powder& Nirma Popular Detergent Powder

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Rohit Surfactants Private Limited :A family business started around 1970 for manufacturing & marketing of oil soap with a turnover of a couple of Lac turned into a corporate in the year 1998 along with the manufacturing of detergent With the passage of the time, by adopting latest technology & using premium quality raw material. Company does the manufacturing and trading of detergents, toilet soaps and other FMCG products. It developed detergent powder under the brand name Ghari


Detergent market in India can be segmented in three broad categories: Premium Category : It includes Ariel Ultramatic, Spring clean Surf Automatic, Quick Wash etc. Mid-Priced Category : It includes Surf Excel Blue, Tide & Stain Champion etc. Mass Market Category : It includes Nirma, Ghari, Wheel, Fena etc.

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Strength The Indian detergent sector has many advantages which most
manufacturer of the world can only dream of, its listed below -Low operational Cost: The main strength of indina detergent market is the low cost their cost is low because of cheap raw material which they get at a subsidies rate and the big giant like HUL has done tie-up with TOMCO of tata and getting cheap raw material, and the cost of labour add benefit to reduce the cost -Established distribution network: The distribution network of all the major companies like HUL,P&G etc can its hard to shaken-up and the rural players like RSPL etc have develop diverse market and still growing at faster rate. -Presence of Global Players- Here in india the number of international players are huge and only three main giant HUL, P&G and Henkel and capture the 75% of market share in india, hence we get quality product at a reasonable price

Weakness- In the present market scenario with the increase in numbers of user the weakness is also growing by following measure. -Low Intervention from technology: In this sector the charm of new technology is not really seen after a long break-through liquid detergent has come after powder and bars it doesnt seems to generate interest in the eyes of customer so there is a need of urgent revolution in technology -No Entry Barrier: Every fortnightly you see new advertisement in the news xyz brand has this quality etc, these brand damage the existing companies who are doing well in the market, so this is the major weakness of the this secto0r Opportunities The Company can utilize upon the changing lifestyle of the people for increasing the demand of the product by concentrating on customer needs and by giving the best product thereby the detergent market can widen the scope and can increase the demand. -Rural Market: India rural market is diverse in terms of scope of market share when 70% of population lives there then there is a huge possibilities to explore and detergent companies are trying hard to develop their network but it is in the intial stage -Rising Income level: Indian detergent market is directly propotional to income level of the consumer if consumer earns more then they will invest more hence the sale will be increase so the rising income level is the good sign for this sector.
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Threats The possible threats of this sector can be very dangerous for the future of this industry
-Chemicals:This secor might face some legislative pressures as the chemicals that are used in the production of detergents are harmful for the human body and natural environment. There might be environmental effects as the detergent contains chemicals that are harmful for human being and natural resources. Therefore the company must make sure that it makes environment friendly products. -illegal mimic of the label: It is very prevalent in the market that the misuse of brand name and label is done for example: surf excel bar is sold by xyz into the rural with name sarf excel this comes in lime light when one lady got hospitalized due to harmful chemical used into the bar .

PEST analysis provides more efficiency towards scan the environment for future strategic planning. PEST stands for Political, Economical, Socio cultural, Technological, and it is very useful tool for develop new planning. Political/Legal Analysis Political and legal factors have huge impact on the business for develop new strategies. Unilever is subject to local, regional and global rules, laws and regulations. These rules and regulations cover diverse areas such as product safety, product claims, trademarks, copyright, patents, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes. Failure to comply with laws and regulations could leave Unilever open to civil and criminal legal challenge and may result in fines or imprisonment of personnel. Further, reputation could be significantly damaged by adverse publicity relating to such a breach of laws or regulations. Changes to taxation and measures to minimise unemployment have also affected Unilevers
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economic performance. In some regions Govt. has imposed heavy duties on imports and raw materials and it had a negative impact on production capacity. However, Unilever is quite good in managing relations with Governments. Economic Analysis Indian detergent industry environment is becoming highly competitive with more number of competitive players in the market. Macroeconomic environment is highly uncertain. Consumers would not want to buy expensive product or brands due to current economic tide. Economic Decline in business during an economic downturn has resulted in customer and suppliers to default. Indian detergent industry business is dependent on continuing consumer demand for its brands. Reduced consumer wealth driven by adverse economic conditions has resulted in consumers becoming unwilling or unable to purchase Indian detergent industry, which has adversely affected cash flow, turnover, profits and profit margins. Adverse economic conditions have resulted in the impairment of some of intangible assets which are in the form of brand names. However, recession has increased the demand for some of the home care products. Indian detergent industry is operating in different markets, which have reacted to recession in different ways. Social Analysis Indian detergent industry has developed a strong corporate reputation over many years for its focus on social and environmental issues, including promoting sustainable development and utilisation of renewable resources. It is very conscious about safety and health of its employees and accident rate is decreased every year. Indian detergent industry vision is to help people feel good, look good and get more out of life with brands and services that are good for them and good for others. It has successfully maintained high social and environmental standards by designing and producing products that are safe for consumers. Indian detergent industry is working on so many social welfare projects like World food programme and safe drinking water. Indian detergent industry is using environment friendly materials and packing stuff. The Unilever brand logo now displayed on all products and advertising, increases its external exposure. Unilever has built its image as an environment friendly and socially responsible company.

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Technological Analysis Indian detergent industry has reaching new hights likeUnilever has been spending on IT to improve its business especially in the area of e-business so as to improve brands image and quality of its products. Unilever know that failure to provide sufficient funding to develop new products, lack of technical capability in the R&D function and quickly roll out the products may adversely impact its cash flow, turnover, profit and profit margins and affect reputation. High level of automation is one of the critical success factors of Indian detergent industry that differentiates then from their competitors and serves as a source of competitive advantage. Today, Unilever is trying to minimize cost through IT efficiencies at global level. In addition, Unilever Technology Venture works in collaboration with Unilever R&D group to help Unilever meet consumers needs. Area of concern is genomics, advanced bioscience, advanced materials science and nano technology

Growth Prospect: In Indian detergent industry the user is increasing and the
growth and risen from Compound Annual Growth Rate (CAGR) of 11.2% from 2000 to 2010, with an average annual volume growth of 8.5% and there is a huge scope in rural area for the premium companies because they dont have availability


2001-02 ( in 000

2009-10 (in 000)

% Increase

Urban Rural

847.1 1006.2

1485.4 1847.8

75.3 83.8

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Threat of substitution: Threat from liquid detergent in wide powder and

bar segment at cheaper rate. Expert believes that liquid detergent give better washing quality than detergent powders because liquid detergents are better when it comes to retaining the brightness of the clothes. Liquid detergents are used for specific type of clothes like woolen or delicate ones. So if a liquid detergent comes out in market which can appeal to a large segment (with price and quality) for all types of clothes then it may give a serious competition to Existing giants.


The critical success factors in detergent industry are : Brand Equity Has distinctive Superior & Consistent quality Satisfies customer needs Provides better value for money than other competing brands Distribution Network Availability near the consumer Low unit value products & frequently purchase

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Market Entry


Bars Powder Liquid Handwash

Easy Easy Easy

Supplier Power Sodium Tri Phosphate Supplier Packaging Paper Supplier Manufacturers

Power Intense

Competitors Rural Urban

Rivalry Intense

Substitute Bars

Number Many Few Very Few

Strong Powder few Many Liquid Hand wash


Powder Bars


Buyer Power Cutomer Base Bargaining power Choice

Power Weak Weak Strong

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http://www.moc.gov.in http://www.indutrialindia.com/news/enterpriseit/top-10-indian-detergent-companiesnid-129370-cid-7.html http://info.shine.com/industry-information/telecom/183.aspx http://theviewspaper.net/competition-in-mobile-telecom-is-more-better-2/ http://www.businessreviewindia.in/soapanddetergent/detergent/-unilever-industry-indias-success-story http://www.economictimes.com

Business Policy & Strategic Analysis