The Hindu Business Line : The season of soap

THE big daddy of soaps, HLL, is upping the ante. Claiming that Lux's shares have been on the rise (the company claims the brand is picking up 0.5 per cent month on month since the SRK campaign), the FMCG major is on a relentless drive to create new variants for its Lux franchise.

Apart from creating attractive variants, HLL has decided to tap into those segments in the soaps category which have not been tapped by competition. For instance, in the recent past, HLL floated a new variant, Pears Junior. Unlike Johnson & Johnson, which has already tapped into the baby soap's segment, HLL has decided to bridge the gap in the kids segment which is relatively less crowded compared to the baby soap segment.

Ashok Venkatramani, Vice President (Skincare), HLL, said, ``This is not meant to be a baby soap but is instead targeted at kids. It is meant for those who want to grow out of J&J's baby soaps and right now the market is still not big in this segment. The timing is right and Pears has a better equity in the kids segment." In fact, apart from Doy's brand, Princess, the kid's segment has been largely untapped and even J&J, in spite of having introduced a kids' soap in the past, has withdrawn from the segment. On adding a new user group for the heritage brand of Pears, Venkatramani says, "In the past couple of years, we have been introducing new variants and based on consumer insight, we felt there was an opportunity for a kids' soap in the market."

With massive spends on advertising and promotions, HLL has decided to beef up its soaps portfolio and has even changed ad agencies for its soap brands such as Liril (from Lowe to Mc Cann) and Hamam (from Bates to Lowe). Considering Lowe, Liril's erstwhile agency handled the brand for almost 30 years (it created the brand's iconic girl-under-the-waterfall campaign), giving the heritage brand a new look and feel is the need of the hour for HLL.

Acquisitions - path to growth

Instead of trying to establish a new brand, acquisitions are being looked upon as a quick path to get inorganic growth. For instance, Jyothi Labs, which launched Jeeva nearly four years ago, is still struggling in the category. According to a marketing executive at Jyothi Labs, "The Jeeva brand has not met consumer expectations. We are now trying to create a new look for the brand. Today it is better to acquire a brand rather than create a new one."

Meanwhile, the race to acquire the Chandrika brand a couple of years ago seems to have paid dividends for Wipro. Claims Wipro's Vice-President Chander, "Acquisitions are a way to grow for organisations and soaps are not an exception. Chandrika is an under-marketed brand and has a huge opportunity to grow. Wipro can make the brand much larger," claims Chander.

The Chandrika brand has grown by 8 per cent in the past nine months and is poised for greater growth post re-launch. Adds Chander, "Our belief is that overall growth rates are back in FMCG and toilet soaps should see growth levels of 4-5 per cent. The category is large and all players want to grow their shares in this market. This might explain the interest of new players in this category and the high amount of activation that toilet soaps are seeing." In fact, Wipro has ambitious plans to grow its soaps portfolio, which includes Santoor as well. With the re-launch of Chandrika, there is a new variant, Chandrika Amritam (an aromatherapy soap) which is being test marketed in Karnataka.

With more biggies such as ITC poised to enter the already cluttered segment, there's bound to be more froth in the business.

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