A Report on
Personal Care Products Industry In India
Prof. R.J.MasilamaniBhardwaj(207) Jain Avi Dinesh(222) Gupta(235)
Nishant Prateek Jaiswal(240)
Pratichi Dixit(241) Prerna Karwa(244) Rashmi Sharma(248) Satish Singh(256)
Prerana Sharma(243) Rachita Masand(245) Sanchit Gupta(253)
Saurabh Bhattacharya(257) Swati Bhatter(271)
TABLE OF CONTENTS
INTRODUCTION Market Size and Growth (Indian Perspective) 2.1 Key Trends and Growth Drivers in India 2.2 Personal Care Ingredients in India
3 5 6 6 7 9 10 11 12 14 15 16 17
3. 4. 5. 6. 7. 8. 9. 10.
Major Players in India Industry from Indian Consumers Perspective Industry from Market Player Perspective Demand Dynamics in Consumer Goods Personal Care Industry- The Global View SWOT Analysis of FMCG Sector as a Whole The Rural Market- A Big Target Way Ahead for Personal Care Industry in India REFERENCES
1) INTRODUCTIONPersonal care products are one of the key constituents of the Fast Moving Consumer Goods (FMCG) sector. Personal care is the industry which manufactures consumer products used for beautification and in personal hygiene. Personal care includes products as diverse as chapstick, cleansing pads and wipes, colognes, cotton swabs, deodorant, eye liner, facial tissue, hair clippers, lip gloss, lipstick, lotion, makeup, mouthwash, nail files, pomade, perfumes, personal lubricant, razors, shampoo, talcum powder, shaving cream, skin cream, toilet paper, toothbrushes, and toothpaste, to give a few examples. The major demand is for the products that are of basic need for the consumers like soap, shampoo, hair oil etc. The personal care products industry consists of four major sub-sectors manufacturing a range of products. These sub-sectors and their products are highlighted below:
Face Care Products- Face is the reflection of an individuals physical appearance. Generally, the beauty of a person is described by the look of ones face. Thus, to enhance the beauty of the face people use face care products whose market is growing at double digits. The industry manufactures products like astringent, face cream, face scrub, face toner, moisturizer, cleanser, etc. Some of these products are used for clarification and purification of the facial skin from dust and harmful rays of the sun while others are used for toning. Hand and Foot Care Products- As the name suggest these products are used to enhance the beauty of hands and feet. These include herbal and organic products, as well as products for youthful skin. Men have also started to take better care of themselves, resulting in growth in the mens foot care products market segment. Hand and foot care products can be broadly categorized into cuticle care products, foot scrub, hand and foot cream, nail care products etc. The diagram below shows the various market segments:
Figure 1: Global Market (segment) share in %
Hair Care Products- Hair care was the largest market segment, both in 2004 and in 2005 with sales reaching 350 million dollars globally. The price war has had its impact on the shampoo and styling categories. Sales in hair coloring products have stabilized while hair conditioners and hair repair products, showed significant growth. Consumers are willing to buy special, more costly, products because these products are used for many purposes like hair cleansing, hair conditioning and hair coloring. Some important hair care products are mentioned below:o o o o o o o
Hair Shampoo Hair Conditioner Hair Oil Hair Styling Gel Hair Glaze Hair Spray Hair Colors
Cosmetics- The global cosmetics market continues to benefit from a combination of strong macroeconomic trends creating opportunities for new product niches. Cosmetics are items to enhance or protect the appearance or odor of the human body. The products included in this category are: o Eye makeup product o Face makeup product o Lip makeup product
The above mentioned are the various product lines that the personal care category includes.
2) MARKET SIZE AND GROWTH (INDIAN PERSPECTIVE)The personal care products (PCP) market in India is estimated to be worth around USD 4 Billion p.a. Personal hygiene products (including bath and shower products, deodorants etc.), hair care, skin care, color cosmetics and fragrances are the key segments of the personal care market. Each of these segments exhibits its unique trends and growth patterns. For example, the largest segment of personal hygiene products, largely dominated by bar soaps has grown at 5% p.a. over the last five years. In comparison, the second largest segment, hair care products has seen a much higher growth of 9-10% p.a. during the same period. The skin care market is relatively smaller and is growing at a relatively high rate while moving away from basic creams and moisturizers to specialized products such as anti-wrinkle and dark circle removing creams. For example, the anti-ageing segment, though only 2% of the skin care market has been growing at a rate of greater than 90% p.a. over the last few years.
Figure: Indian market for personal care products
2.1 Key trends and growth drivers in India As in other parts of the world, the driving force behind personal care products has evolved considerably in India. Starting from purely health notions and moving on to fitness, the current trend is towards well-being coupled with beauty. In an effort to adapt to these changes, the industry has moved from basic products such as soaps, shampoos and hair oils to functional products such as cold creams and now to specialized products such as sun block lotions, body exfoliating creams and skin whitening & anti-ageing products. The sizable Indian population base with rising disposable income offers the personal care industry a burgeoning middle class to market a large variety of consumer products. As compared to China, India has a fairly similar personal disposable income per household and a growing population of women in the 25-44 age groups, the key consumer segment. Several social, market and industry trends signal the possibility of Indian personal care industry realizing this huge potential in the near future. Increasing urbanization, rising participation of women in urban work force and growing importance of looks and personal grooming not only for personal but professional reasons are some of the key social drivers. Market trends like spread of organized retail to Tier II cities, development of non-traditional segments like mens cosmetics (with products like hair gels and fairness creams) and development of a wide range of products at different price points are all factors which could contribute to the growth of the domestic personal care market. Industry trends like increasing competition with entry of large MNCs, increased brand building and customer awareness initiatives by companies are accelerating growth. Subject to sustained overall GDP growth rates of 8-9% p.a., the overall Indian personal care market has the potential to grow at 15%-16% p.a. (much higher rates for select segments like color cosmetics, skin care and deodorants) and thereby double to USD 8 Billion by 2012-13.
2.2 Personal care ingredients in India The Indian personal care ingredients market is currently estimated at USD 300-350 Million. The relatively higher price sensitivity of the Indian personal care market has traditionally limited the role of high value personal care ingredients. This has also contributed to lower R&D spends and fewer innovations by the Indian personal care product formulation companies, few of which are backward integrated in the personal care ingredients space. However the recent market developments and changed competitive landscape with the advent of large corporations willing to take investment decisions for a longer time horizon have contributed to changing the scenario. Global trends like high demand for green products are already well established in the domestic context due to long standing preference of the Indian consumer for herbal products. Other trends like consumers demanding better performance from products, whereby a minimum addition of the active ingredient to justify marketing claims is no longer sufficient, are relatively new. Indian personal care industry typically uses specialty chemicals such as surfactants, fragrance compounds, polymer compounds and UV filters as active ingredients. Growing demand is leading to development of high end specialty active ingredients with a stronger emphasis on organic (natural) ingredients. Driven by increasing consumer preference for products with better
functional benefits, the personal care ingredients market is expected to surpass the growth of the personal care products market.
3) MAJOR PLAYERS IN INDIA
1) HLL: Hindustan Lever Limited (HLL) is India's leading consumer goods supplier, with a focus on the Fast-Moving Consumer Goods (FMCG) category that includes detergents, soap, shampoo, deodorant, toothpaste, and other personal care items, and cosmetics. HLL's personal care brands include soap brands such as Lux, Lifebuoy, Liril, Breeze, Dove, Pear's, and Rexona; shampoos and hair coloring brands including Sunsilk Naturals and Clinic; skin care brands Fair & Lovely and Pond's; and oral care brands Pepsodent and Close-Up. The company's cosmetic line is led by the Lakme brand; HLL also produces a line of Ayurvedic personal and healthcare items under the Ayush brand. HLL maintains a strong manufacturing presence in India, with some 80 factories located throughout the country; the company also subcontracts to more than 150 third-party producers. HLL is itself a subsidiary of Unilever, which controls 51.55 percent of the gro