The Economic Times
Shampoos lather up in rural markets SHUCHI VYAS
TIMES NEWS NETWORK[ THURSDAY, JANUARY 19, 2006 01:24:10 AM]
Consumers in rural markets appear to be driving the double-digit 20-25per cent growth rate that's currently being recorded by the Rs 1,450 crore shampoo market.
The rural market has recorded a volume growth of 40per cent while the urban market is trailing along at 16per cent. Industry officials said higher innovation and improved affordability in the market has helped increase penetration levels in the rural markets vis-à-vis the more saturated urban markets.
Market leader HLL saw its brands, Clinic and Sunsilk, clock a rise in market share to 48per cent in November '05 from 46.8per cent in November '04. Clinic's growth in volumes on a quarter-on-quarter basis was 33.2per cent in Q3 of '06 from 33per cent in Q206 whereas Sunsilk grew from 11.6per cent in Q206 to 12.4per cent in Q3.
In value terms, growth in shampoo sales for Q306 has been 48.4per cent (compared to Q305) compared with 47.5per cent in Q2. In volume terms, there has been an increase of 1per cent each quarter in the rate of growth which is pegged at 53.6per cent for Q3 '06.
CavinKare, another major player in this market with brands Chik, Nyle and Meera has a market share of 22per cent as of November '05. "In terms of individual marketshare, Chik being our largest brand has a marketshare of 19per cent, followed by 2per cent and 1.3per cent for Nyle and Meera, respectively," said KS Ramesh, CEO, CavinKare. "As far as the growth rate is concerned, Chik is growing at 23per cent, Nyle at 1per cent and Meera at 25per cent," he said.
In the shampoo market, 35per cent of the tonnage are big packs and 65per cent are the sachets and smaller packs. The smaller packs are more profitable for CavinKare as 80per cent of the total sales come from this category whereas 20per cent comes from bigger packs.
"The shampoo category comprises 62,809 tonnes and CavinKare has sold 14,000 tonnes in the past one year," said Mr Ramesh. P&G has three categories in this market, viz, Pantene ProV, Head & Shoulders and Rejoice under its P&G Home Products segment. The company's marketshare is 22-25per cent, as per figures from AC Nielsen. Company officials refused to comment on the growth rate of individual brands.