Shampoo Industry

1. Shampoo Industry 20.11.02 Category : FMCG Product : Shampoo

2. This Presentation Covers • What is FMCG ? • Characteristics of FMCG products • Hair Care Category in India • Types of Shampoos • Hair Care Facts • Market Size • Awareness • Shampoo usage details • Penetration details • Growth in this industry • Evolution of shampoo as a product • The top brands • Ad Spends, and brands on the net

3. What is FMCG ? FMCG refers to consumer non-durable goods required for daily or frequent use. Typically, a consumer buys these goods at least once a month.

4. FMCG Products • Detergents • Toilet soaps • Toothpaste • Shampoos • Creams • Powders • Food products • Confectioneries • Beverages • Cigarettes

5. Typical Characteristics of FMCG products • Individual products are of small value. But, all FMCG products put together account for a significant part of the consumer’s budget • The consumer keeps limited inventory of these products and prefers to purchase them frequently, as and when required • Many of these products are perishable • The consumer spends little time on the purchase decision. Rarely does he / she look for technical specifications ( in contrast to industrial goods ) • Brand loyalties or recommendations of reliable retailer / dealer drive purchase decision • Trial of a new product i.e brand switching is often induced by heavy advertisement, recommendations of the retailer or neighbors / friends.

6. Typical Characteristics of FMCG products…contd. • These products cater to necessities, comforts as well as luxuries • They meet the demands of the entire cross section of population • Price and income elasticity of demand varies across products and consumers

7. Hair Care Category in India • There are 5 main products • Hair Oil • Shampoo / Conditioners • Styling products • Herbal Remedies • Hair Dyes / colors

8. Shampoos Did you know, that the word Shampoo is derived from the Hindi word “Champi”. Remember Johnny Walker’s famous song - Meri Jaan, Meri Jaan, Sunday Ke Sunday, Teil Maalish - Champi Teil Maalish. The British loved the massage so much, they started calling Champi as Shampoo

9. TG for Shampoos • Hair Shampoos and Conditioners are targeted at • Upper middle class • Now, also middle class and house wives • Upper class rural consumers • Teenagers - they are the major segment

10. Types of Shampoos • Shampoo market is segmented on benefit platforms • Cosmetic ( shine, health, strength ) • Anti - Dandruff • Herbal

11. Hair Care Facts • The frequency of shampoo usage is very low. Most consumers use shampoo only once or twice in a week. In many cases, these products are used on special occasions such as weddings, parties etc • Some customers use shampoo only to address a specific problem such as dandruff or when they need to condition their hair • Use of conditioners is not common. It is restricted to the super premium segment or those who are very involved with their hair care • Some consumers use natural conditioning agents such as henna • About 50% of consumers use ordinary toilet soaps to wash their hair • About 15 % of consumers use toilet soaps as well as shampoo for cleaning their hair

12. Hair Care Facts…contd. • Brand loyalties in shampoo are not very strong. Consumers frequently look for a change, particularly in fragrance • Consumers attribute lathering to the act of cleaning • Major expectations from the product are improvement in texture and manageability, giving softness and bounce to hair, curing and avoiding damage to the hair • An Indian needs more shampoo for a proper wash ( average 6 ml ) compared to 4 ml needed in Western countries as most Indian women have long hair • Most consumers do not use shampoo daily • Regular users would need smaller quantity of shampoo per bath. Hair tend to collect more dust due to dusty environment and oiling habits • Southern market is predominantly a sachet market, accounting for 70 % of sachet volumes

13. Hair Care Facts…contd. • In Contrast, shampoo bottles are more popular in the Northern markets • About 50 % of the shampoo bottles are sold in the Northern region alone • In the North, local brands such as Ayur have strong equities and these products being low priced dilute sachet’s USP of low price

14. Shampoo market Size in India • Size of shampoo market - 930 Cr • Anti - Dandruff Shampoo - 20 % of above • Sachet Sales - 70 % of above

15. Shampoo Awareness in India • Urban areas - 90 %, accounting for 80 % of shampoo sold in the country • Rural areas - 80 %, accounting for 20 % of shampoo sold in the country

16. Shampoo Usage • Per Capita consumption of Shampoo in India - 13 ml • Per Capita consumption of Shampoo in Indonesia - 160 ml • Per Capita consumption of Shampoo in Thailand - 330 ml

17. Shampoo Penetration in India • All India Shampoo - 14 % • Urban - 40 % • Rural - 10 %

18. Growth in Shampoo Market • Average Growth over the last few yrs - > 20 • Expected Average growth over the next few yrs - 25 % AD segment is the fastest growing segment, growing at 10 - 12 % every year. H & S growing at 15 - 20 % every year.

19. Evolution of Shampoo in India • HLL undisputed leader from the early 90’s • Sunsilk launched in 1964 ( General Shampoo platform ) • Clinic Plus launched in 1971 ( Family, health shampoo platform ) • Clinic All Clear launched in 1987 ( Therapeutic AD Shampoo ) • Sunsilk re-launched in 1987 - Shampoo + Conditioner ( Beauty platform ) with Sachet SKU • HLL Goes rural with Sachet • Clinic Active launched in 1991 ( with Pro Vitamin B - health platform ) • Sunsilk re-positioned and re-launched in 1994 ( Nutracare) - Pink for dry hair, yellow for normal hair, green for oily hair and black for long hair

20. Entry of Competition • Why did competition Enter India • Teeming millions • Burgeoning middle class • Westernized youth • low penetration levels • Huge untapped market

21. New Entrants into the Market • P & G enters India in Nov 1995, with the world’s largest selling brand - Pantene • Colgate Palmolive launched Optima also in Nov 1995 ( break through in Keratin treatment ) • Nirma launched Nirma Shampoo which went into rough weather because it also had a detergent and soap with the same name. The brand name also had low price connotations

22. Shampoo Boom in India • In mid 1997, per capita consumption of Shampoo increased • Of the Rs. 350 Cr. Shampoo market, the AD segment accounted for a 20 % share • P & G launched its Internationally acclaimed A & D shampoo H & S in 1997 with Zinc Pyrithine ( ZPT ) - a unique anti-microbial agent. There were 2 variants - regular and menthol • Sachet sale became 40 % of all shampoo consumption in the country

23. HLL Dominance • Clinic, Sunsilk, Organics and Lux and their various brand extensions dominate the shampoo market • In 1998, the company re-launched Clinic and Sunsilk brands • Sunsilk was re-launched with Fruitamins. • Today HLL has a 63 % market share in the shampoo market • In South India, Clinic Plus and Clinic All Clear put together have a market share of about 70 %

25. The top Shampoo brands • Normal Shampoo’s • Clinic Plus • Sunsilk • Chik

26. The top Shampoo brands • Herbal Shampoos • Ayush • Dabur Vatika • Nyle

27. The top Shampoo brands • Anti Dandruff Shampoos • Clinic All Clear • Head and Shoulders • Dabur Vatika AD

28. The top Shampoo brands • Premium Products • Shehnaz Hussain • Revlon Flex • L'Oreal

29. The way forward • While toilet soaps have reached saturation, there is immense potential for penetration of shampoos into Indian households. • According to NCAER, Shampoo penetration is expected to grow from 314 thousand households in 1998-99, to 502 per thousand households in 2006-07.

30. Ad Budgets are on the rise • The reasons are • Lot of competition in the market • Low penetration levels • High potential • Untapped rural market to reach to There are a few brands that are already on the net

31. Brands on the Net • Clinic All Clear • Sunsilk • Head & Shoulders • Pantene

32. Thank You