The Hindu Business Line : Getting into a lather

ANTICIPATING a hot summer ahead, Dettol has just launched Dettol Cool. To signify its freshness, the soap comes in `light blue' colour and has a new fragrance. As Dettol, the leader in the premium soaps category, is getting ready with its new variant, the popular segment is also witnessing more fragrance-based soaps.

After being one of the larger players in the oil segment, recently the Mumbai-based Ruchi Soya decided to make a foray into the soaps segment with Ruchi No.1 in rose, jasmine and lime variants. Diversifying from its oil business, Ruchi Soya hopes to exploit the synergies in its existing business to get into the popular soaps segment, which has seen a resurgence of late.

Explaining the need to foray into the competitive soaps segment, Amrita Shahra, Head of Business Development, Ruchi Soya, says, "Toilet soap has been identified as one of the largest segments in the FMCG sector. Soaps have the lowest per capita consumption in India compared to other countries."

And it's not just smaller players such as Ruchi who are trying their luck with toilet soaps, bigger FMCG companies such as Marico have been making rapid acquisitions in both national and international markets of late. The highly penetrated yet low consumption patterns observed in the toilet soap category has made the new and existing players launch new variants. However, the success rate of new brands and sustaining shares in the case of the older brands is an ongoing challenge for the companies dabbling in Rs 4,952-crore category which has seen a 3.7 per cent growth in the resurgent FMCG industry.

Observes Kumar Chander, Vice-President (Marketing), Wipro Consumer Care, "It is all about getting the right combination with customers which makes soap brands click. However, it is not something which happens too often in the soaps category." So while biggies such as HLL have been struggling with their heritage brands such as Lux, a relatively small player such as Godrej Consumer Products Ltd (GCPL), has gotten lucky with Godrej No. 1 (it continues to be the largest selling Grade 1 soap).

New entrants

Taking its chances, Marico recently bought a relatively unknown herbal soap brand, Manjal, from the Kerala-based Oriental Extractions. Having tried to acquire bigger herbal brands such as Chandrika in the past, Marico is not giving up on entering the segment. Explaining the strategy, Saugata Gupta, Head (Marketing), Marico, says, "There are not too many soap brands operating on the natural platform in Kerala. There is localised opportunity for the brand in that State and we will see how it works out. There is no aggressive strategy that we have in mind right now."

Realising the limitations of establishing a soap brand, Marico is testing the waters in Kerala with its new brand before it decides to roll out the brand at a national level.

The Rs 9-crore Manjal brand is Marico's second buy since it acquired brands such as Camelia and Magnolia from the Bangladesh-based Personal Care Products Company. Marico intends taking advantage of its extensive distribution network (on the back of its coconut oil brand) to exploit the potential of its acquired brands.

HLL's `revival' strategy

Meanwhile, languishing big brands from the HLL kitty have been trying to make a comeback.

The leader in the toilet soap category is turning up the pitch to push sales for its over Rs 750 odd crore Lux by unleashing new variants on its 75th anniversary.

Chocolate Seduction, Aromatic Glow and Festive Glow are the names of some of the variants, which were launched after its Shah Rukh Khan campaign.

"The toilet soaps segment is growing and we being the leader have decided to create some excitement by creating these limited edition variants for Lux," states Arun Adhikari, Managing Director (Home and Personal Care), HLL.

More Stories on : Strategy | Personal Products | Soaps & Detergents | Hindustan Lever Ltd

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