Consumer Trends Inside the Soap Category in India Soap is a product that many people might take for granted or consider rather ordinary, but for some, lathering up can be a treasured part of a morning or nightly routine.

Scented or unscented, in bars, gels, and liquids, soap is a part of our daily lives. In the United States, soap is a $1.390 million (US$)* industry with over 50 mass market brands. But in some markets the sales potential for soap is only beginning to be realized. At the end 2000, soap was a $1.032 million (US$)* business in India. IFF's marketing experts offer the following overview of this growing category.

*Source: Information Resources Inc. 2001 data for Year-End 2000

Overview of the Indian Soap CategoryIndia is a vast country with a population of 1,030 million people. Household penetration of soaps is 98%. People belonging to different income levels use different brands, which fall under different segments (see table below), but all income levels use soaps, making it the second largest category in India (detergents are number one). Rural consumers in India constitute 70% of the population. Rural demand is growing, with more and more soap brands being launched in the discount segment targeting the lower socio-economic strata of consumers.

Soap Price (per 75 gram cake)Segment in

rupeesin US$

Carbolic* 5.00 10 centsDiscount 7.00 15 centsPopular 11.00 23 centsPremium 17.00 36 centsSuper Premium

35.00 75 cents

* The carbolic segment consists of soap that has crysellic acid (e.g. carbolic acid) as an active ingredient to remove body odor. These soaps have a strong medicated/germ killing connotation.

History of Soap in IndiaDuring the British rule in India, Lever Brothers England introduced modern soaps by importing and marketing them in India. However, North West Soap Company created the first soap manufacturing plant in India, which was situated in the city of Meerut, in the state of Uttar Pradesh. In 1897, they started

marketing cold process soaps.* During World War I, the soap industry floundered, but after the war, the industry flourished all over the country.

Mr. Jamshedji Tata set up India's first indigenous soap manufacturing unit when he purchased OK Coconut Oil Mills at Cochin Kerala around 1918. OK Mills crushed and marketed coconut oil for cooking and manufactured crude cold process laundry soaps that were sold locally. It was renamed The Tata Oil Mills Company and its first branded soaps appeared on the market in the early 1930s. Soap became a necessity for the moneyed class by around 1937.

*Cold process soaps are manufactured by mixing all ingredients (soap base, perfume, fillers, actives, etc.) in a large pot and heating them up to 70 degrees while they are stirred manually. Once the mixture is ready, the soap is plodded based on its size with the logo by a machine. In a machine made soap, the mixing process is called milling and this is done by a rotary operated machine and not manually.

Brand Positioning Then and NowSoap manufacturers originally targeted their products to the lowest income strata in urban as well as rural areas, positioning their brands as a way to remove dirt and clean the body. For some brands, that positioning persists even today with a focus on removal of body odor and keeping the user healthy. However, soap positionings are moving towards skin care as a value-added benefit.

Consumer Use TodayToilet soaps are always used in the bar form—there is no other form in the Indian market—and they are used in the bath. Showers are a distant dream for 70% of India’s population, who live in the villages where there is not even a regular supply of drinking water. In the urban areas, people bathe by using a bucket of water, mug, and a bar of soap. In villages, they usually bathe by the river bank or village ponds. Although most of the urban houses have a shower facility, showers are seldom used because of the scarcity of water.

Consumer PreferencesConsumer preferences are varied and are more regionally specific. India is divided into four regions: North, East, West, and South.

Consumers in the North prefer pink colored soaps, which have floral profiles. Here the fragrance preference is for more sophisticated profiles reflecting their lifestyles. Freshness soaps with lime and citrus notes are also popular preferences as the climate in the North is very hot and citrus/lime scented soaps are seen to be refreshing.

The East is not a big soap market; hence no particular preference skews. Consumers in the West exhibit preferences for strong, impactful

fragrances and somewhat harsher profiles compared to the North. Preferences are more for the pink soaps with floral fragrances, primarily

rose, which are positioned on the beauty platform. In the South, the skew is towards specific soap segments like the

Herbal/Ayurvedic profiles and also the Sandal profiles. Consumers here do not exhibit high brand loyalty and are ready to experiment and try out new brands. Hence, most fast moving consumer goods companies tend to launch their new brands in these markets, which they call test launch markets.

MarketingSoap is primarily targeted towards women, as they are the chief decision-makers in terms of soap purchase. Medicated positionings like germ killing and anti-bacterial are marketed to families.

About 75% of soap can be bought through these different types of outlets:

Kirana Store: This is the most common source for buying soap, which usually forms a part of the month’s grocery list (which is purchased from these Kirana Stores). Consumers exhibit loyalty to these stores, which is largely dependent on proximity to consumers’ homes. Here consumers buy across the counter and do not have an option of browsing through display shelves.

Pan-Beedi Shops: These are really small shops, almost like handcarts, and they are primarily set up to dispense cigarettes and chewing tobacco. However, one would find such a shop at every corner and they are the main sources of soap purchase for the lower socio-economic classes. These kinds of shops exist by the dozen in rural areas.

Department Store: In India, there are very few department stores and the “Indianised” version of department stores are called “Sahakari Bhandars.” It is still a fairly new concept. However, department stores have good display counters and this is the only place where consumers get a first hand experience of shopping and choosing from available options. Here soap prices are also discounted below the retail prices.

Top five companies in soap industry?Hindustan Lever LtdGodrej Soaps Proctor & GambleHenkel India (****)Nirma detergents

Personal Wash (Soaps)Personal Wash (Soaps)

The personal wash can be segregated into:

Premium- Lux, Dove Economy- Nirma Bath, Lifebuoy Popular- Nirma, Cinthol

The price of the premium segment products is twice that of economy segment products. The economy and popular segments are 4/5ths of the entire soaps market. The penetration level of toilet soaps is 88.6%. However, the per capita consumption of soap in India is at 460 gms per annum, while in Brazil it is at 1,100 gms per annum.

In India, soaps are available in five million retail stores, out of which, 3.75 million retail stores are in the rural areas. Therefore, availability of these products is not an issue. 70% of India's population resides in the rural areas; hence around 50% of the soaps are sold in the rural markets.

Growth With increase in disposable incomes, growth in rural demand is expected to increase because consumers are moving up towards premium products. However, in the recent past there has not been much change in the volume of premium soaps in proportion to economy soaps, because increase in prices has led some consumers to look for cheaper substitutes.

The major players in personal wash (Soap) market are HLL, Nirma and P&G.

Hindusatan unilever limited:-

"Our market share is 55.9%

The domestic soap industry is expected to register a growth rate of about 7 percent per annum due to the high penetration levels achieved in recent times

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