The Hindu Business Line : P&G looks to enter more product categories

Chennai, Dec. 20 Consumer goods giant Procter & Gamble, which is present in eight product categories in India, will look to increase its presence in the local market by picking more brands from P&G’s stable of 21 categories that it has in the US market.

Unwilling to divulge the categories the multinational, which has been present in the Indian market since 1988, would enter in the near future, Mr Robert McDonald, Chief Operating Officer, P&G, in an interview to Business Line, said that Indian consumers spend only about a dollar a year on P&G brands while in the US, its most developed market, consumers spend $100 a year on its products across the 21 categories.

“So we would like to replicate that everywhere,” he said. China’s consumers spend about $3, Mexico about $20 and Russia is about $9 a year, he said.

P&G, which owns brands across categories such as Pampers diapers, Ariel and Tide detergents, Gillette shaving systems and Pantene and Head & Shoulders shampoos, is yet to enter several categories in India such as body wash, premium fragrances, household cleaners and cosmetics in which it is present worldwide. “We have to get into those 13 other categories and we have plans in place to do those,” said Mr McDonald.

Growth ‘remarkable’

“Our Indian business is actually growing at a remarkable rate; since the year 2000, our business has quintupled. The difference is that in China too, we started at the same time, in 1988, when the economy opened up. Our total sale is much more in China. Here Hindustan Unilever is very strong and very established. So, we are coming from behind but that can be a competitive advantage as well because you can leapfrog technology and infrastructure,” said Mr McDonald.

Asked specifically about the aggressive price cuts it made in its detergent brands in the early part of the decade and the perception that it withdrew from the challenge Hindustan Unilever posed, Mr McDonald said, “Obviously, if our business quintupled since the year 2000, we wouldn’t see it that way. We have lots of respect for Hindustan Unilever, for Nirma, for all of our competitors; this is a huge market and growing quickly. There is plenty of room for everyone. So we are not fixated with any one competitor. We have to innovate, our challenge is to getting to more people and improving lives.”

Shampoo market

Commenting on P&G’s presence in the shampoo market in India and its relatively slower progress in taking market share, he said, “It takes time, not due to lack of investment or lack of innovation or capability. We went to Japan in 1973 and we made our first profit in laundry there in 1994. So it takes time; we have been around for 170 years so we measure time in long spans. I am confident that we will do in India what we have done in other markets of the world.”

Later, addressing a session on innovation at Pan IIT 2008’s global conference, Mr McDonald said P&G’s innovation process was well integrated into its business model. “It is important to make innovation repeatable and reliable in a company,” he said.

P&G’s innovation process to drive sustainable growth is focused on eight drivers: purpose, goal, strategy, strength, structure, systems, culture and leadership, he explained.

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