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New Delhi, Apr 10 With rivals like Procter & Gamble and Dabur giving tough competition, FMCG major Hindustan Unilever’s market share in shampoo segment is declining and analysts pointed out that there is a concern over the firm losing out to competition in its other core segments.
According to the Neilsen’s January-February data, HUL’s market share (volumes) in shampoo segment declined by 1.3 percentage points to 47.3 per cent while P&G gained by 2.4 percentage points with a market share of 17.7 per cent.
Dabur on the other hand gained 0.8 percentage points capturing 6.7 per cent market share in the estimated Rs 3,000 crore Indian shampoo market.
The company’s brands ‘Clinic Plus’, ‘Dove’ and ‘Pantene’ competes against the likes of P&G’s ‘Head & Shoulder’ and Dabur’s ‘Vatika’, ITC’s ‘Fiama Di Wills’
Analysts pointed out that HUL is facing pressure from competitions despite being the market leader.
“It is also losing out share in soaps and detergent segments, which are their core businesses. This is a key concern for them,” India Infoline Research Analyst Ms Vanmala Nagwekar told PTI.
She further said: “HUL has been witnessing some volume growth in the past couple of quarters but market share is not growing at the speed which is expected. It is almost stagnant.”
Another Mumbai-based analyst, who asked not to be identified, said “Because of the huge spend on advertising there is pressure on HUL’s margins.”
Pricing will be an issue and profitability is a concern for the company, the analyst pointed out, adding “they (HUL) have been cautious of price hikes though they have recently increased prices of some of its products“.
The company had recently revised prices upwards of its ’Lux’ and ‘Liril’ soap brands by up to 10 per cent.
In the last couple of years, the company has revamped its entire portfolio in an effort to attract customers. It has been heavily spending on advertising and promotional activities in the last one year.
As per its unaudited results for the nine months ended December 31, 2010, HUL spent around Rs 2,140.95 crore on advertising and other promotional campaigns. It was much more than its net profit of Rs 1,736.83 crore for the same period.
In the toothpaste category, where HUL sells brands like ’Close-Up’ and ‘Pepsodent’, its market share grew by 1.3 percentage points to garner a share of 23.3 per cent during January-February 2011 in the estimated Rs 3,200 crore Indian toothpaste market.
According to the Nielsen data, market leader Colgate Palmolive’s market share declined by 1.2 percentage points to 52.4 per cent.
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