INDUSTRY STRATEGIES OF SHAMPOO PRODUCTION INDUSTRY

This Presentation Covers

What is FMCG ? Characteristics of FMCG products Hair Care Category in India Types of Shampoos Hair Care Facts Market Size Awareness Shampoo usage details Penetration details Growth in this industry

Evolution of shampoo as a product

The top brands Ad Spends, and brands on the net

What is FMCG ?
FMCG refers to consumer non-durable goods required for daily or frequent use. Typically, a consumer buys these goods at least once a month.

FMCG Products
Detergents Toilet soaps Toothpaste Shampoos Creams Powders Food products Confectioneries Beverages Cigarettes

Typical Characteristics of FMCG products

Individual products are of small value. But, all FMCG products put together account for a significant part of the consumers budget The consumer keeps limited inventory of these products and prefers to purchase them frequently, as and when required Many of these products are perishable The consumer spends little time on the purchase decision. Rarely does he / she look for technical specifications ( in contrast to industrial goods ) Brand loyalties or recommendations of reliable retailer / dealer drive purchase decision Trial of a new product i.e brand switching is often induced by heavy advertisement, recommendations of the retailer or neighbors / friends.

Typical Characteristics of FMCG productscontd.

These products cater to necessities, comforts as well as luxuries They meet the demands of the entire cross section of population Price and income elasticity of demand varies across products and consumers

Hair Care Category in India

There are 5 main products
Hair Oil Shampoo / Conditioners Styling products Herbal Remedies Hair Dyes / colors

Shampoos
Did you know, that the word Shampoo is derived from the Hindi word Champi. Remember Johnny Walkers famous song - Meri Jaan, Meri Jaan, Sunday Ke Sunday, Teil Maalish Champi Teil Maalish. The British loved the massage so much, they started calling Champi as Shampoo

TG for Shampoos
Hair Shampoos and Conditioners are targeted at
Upper middle class Now, also middle class and house wives Upper class rural consumers Teenagers - they are the major segment

Types of Shampoos
Shampoo market is segmented on benefit platforms
Cosmetic ( shine, health, strength ) Anti - Dandruff Herbal

Hair Care Facts

The frequency of shampoo usage is very low. Most consumers use shampoo only once or twice in a week. In many cases, these products are used on special occasions such as weddings, parties etc Some customers use shampoo only to address a specific problem such as dandruff or when they need to condition their hair Use of conditioners is not common. It is restricted to the super premium segment or those who are very involved with their hair care Some consumers use natural conditioning agents such as henna About 50% of consumers use ordinary toilet soaps to wash their hair About 15 % of consumers use toilet soaps as well as shampoo for cleaning their hair

Hair Care Factscontd.

Brand loyalties in shampoo are not very strong. Consumers frequently look for a change, particularly in fragrance Consumers attribute lathering to the act of cleaning

Major expectations from the product are improvement in texture and manageability, giving softness and bounce to hair, curing and avoiding damage to the hair
An Indian needs more shampoo for a proper wash ( average 6 ml ) compared to 4 ml needed in Western countries as most Indian women have long hair Most consumers do not use shampoo daily Regular users would need smaller quantity of shampoo per bath. Hair tend to collect more dust due to dusty environment and oiling habits Southern market is predominantly a sachet market, accounting for 70 % of sachet volumes

Hair Care Factscontd.

In Contrast, shampoo bottles are more popular in the Northern markets About 50 % of the shampoo bottles are sold in the Northern region alone In the North, local brands such as Ayur have strong equities and these products being low priced dilute sachets USP of low price

Shampoo market Size in India

Size of shampoo market - 930 Cr Anti - Dandruff Shampoo - 20 % of above Sachet Sales - 70 % of above

Shampoo Awareness in India

Urban areas - 90 %, accounting for 80 % of shampoo sold in the country

Rural areas - 80 %, accounting for 20 % of shampoo sold in the country

Shampoo Usage
Per Capita consumption of Shampoo in India - 13 ml Per Capita consumption of Shampoo in Indonesia - 160 ml Per Capita consumption of Shampoo in Thailand 330 ml

Shampoo Penetration in India

All India Shampoo - 14 % Urban - 40 % Rural - 10 %

Growth in Shampoo Market

Average Growth over the last few yrs - > 20 Expected Average growth over the next few yrs - 25 %
AD segment is the fastest growing segment, growing at 10 - 12 % every year. H & S growing at 15 - 20 % every year.

Evolution of Shampoo in India

HLL undisputed leader from the early 90s Sunsilk launched in 1964 ( General Shampoo platform ) Clinic Plus launched in 1971 ( Family, health shampoo platform ) Clinic All Clear launched in 1987 ( Therapeutic AD Shampoo ) Sunsilk re-launched in 1987 - Shampoo + Conditioner ( Beauty platform ) with Sachet SKU HLL Goes rural with Sachet Clinic Active launched in 1991 ( with Pro Vitamin B - health platform ) Sunsilk re-positioned and re-launched in 1994 ( Nutracare) Pink for dry hair, yellow for normal hair, green for oily hair and black for long hair

Entry of Competition
Why did competition Enter India
Teeming millions Burgeoning middle class Westernized youth low penetration levels Huge untapped market

New Entrants into the Market

P & G enters India in Nov 1995, with the worlds largest selling brand - Pantene Colgate Palmolive launched Optima also in Nov 1995 ( break through in Keratin treatment ) Nirma launched Nirma Shampoo which went into rough weather because it also had a detergent and soap with the same name. The brand name also had low price connotations

Shampoo Boom in India

In mid 1997, per capita consumption of Shampoo increased Of the Rs. 350 Cr. Shampoo market, the AD segment accounted for a 20 % share P & G launched its Internationally acclaimed A & D shampoo H & S in 1997 with Zinc Pyrithine ( ZPT ) - a unique anti-microbial agent. There were 2 variants - regular and menthol Sachet sale became 40 % of all shampoo consumption in the country

HLL Dominance
Clinic, Sunsilk, Organics and Lux and their various brand extensions dominate the shampoo market In 1998, the company re-launched Clinic and Sunsilk brands

Sunsilk was re-launched with Fruitamins.

Today HLL has a 63 % market share in the shampoo market In South India, Clinic Plus and Clinic All Clear put together have a market share of about 70 %

The top Shampoo brands

Normal Shampoos
Clinic Plus Sunsilk Chik

The top Shampoo brands

Herbal Shampoos
Ayush Dabur Vatika Nyle

The top Shampoo brands

Anti Dandruff Shampoos
Clinic All Clear Head and Shoulders Dabur Vatika AD

The top Shampoo brands

Premium Products
Shehnaz Hussain Revlon Flex L'Oreal

The way forward

While toilet soaps have reached saturation, there is immense potential for penetration of shampoos into Indian households. According to NCAER, Shampoo penetration is expected to grow from 314 thousand households in 1998-99, to 502 per thousand households in 2006-07.

Ad Budgets are on the rise

The reasons are

Lot of competition in the market Low penetration levels High potential Untapped rural market to reach to

There are a few brands that are already on the net

Brands on the Net

Clinic All Clear Sunsilk Head & Shoulders

Pantene

THANK YOU