After cola, Reliance begins price war in home and personal care space

Earlier, to increase share in beverages market, prices of Campa Cola were cut

After sparking a price war in the carbonated beverages market through Campa Cola, Reliance Consumer Products has taken the pricing battle to the other segments in the fast-moving consumer goods market.

For instance, in soaps, it has priced its product lower than the market leader in the segment at Rs 25 for 100 gms across its three brands – Glimmer, Get Real and Puric.

With Glimmer, Reliance Consumer competes with Lux, which sells a 100-gm soap bar at Rs 36, while Get Real is similar to Hindustan Unilever’s Pears soap bar, which is priced at Rs 54 for 100 gms. In the hygiene space, Reliance has taken on Reckitt Benckiser’s Dettol, priced at Rs 40 for 75 gms. Godrej Consumer Products, one of the leaders in soaps sells its Godrej No.1 sells 45 gms (each) pack of 4 for Rs 40. 

In the dish wash category, it captured the main price points of Rs 5 for 75 gms, Rs 10 for 145 gms, and Rs 15 for 200 gms in bars, and Rs 10 for 65 ml pouch, Rs 20 for around 140 ml pouch, and Rs 30 for 200 ml pouch in liquids. HUL's Vim bar is priced at Rs 5 for a 60-gm pack and Rs 10 for a 125-gm pack, while a 300-gm pack retails at Rs 30. But Reliance has also moved a step further into the sachet space and is retailing a 5 ml sachet of dish wash liquid at Rs 1. Other brands do not sell sachets.

On JioMart, the price of RCPL’s Enzo two-litre front-load liquid detergent is Rs 250, a 43 per cent discount to the maximum retail price (MRP) of Rs 440; the top-load two-litre liquid detergent is available at a 35 per cent discount and now priced at Rs 250. Its compact detergent powder one kg pack is priced at Rs 149, after a 12 per cent discount on its MRP of Rs 170.

HUL’s Surf Excel Easy Wash detergent powder is priced at Rs 150 and Quick Wash at Rs 240 for a kilogram. But Rin detergent powder for Rs 103 and Wheel detergent powder are priced at Rs 73 for 1 kg. Surf Excel’s front load two-litre pack is priced at Rs 390 and top load at Rs 370. Tide’s 1.5 kg detergent powder sells for Rs 225.

In detergents, Reliance has not disclosed which segment it intends to cater to and what price points it will offer in general trade.

The challenger

Reliance is following the challenger strategy like in the telecom space, said Devangshu Dutta, founder at Third Eyesight. He said this is the fastest way to acquire market share, and since Reliance has deep pockets, it can easily fund market share acquisition by launching its products at a significant price difference compared to rivals. 

“Customers will move at least to try the product and if they end up liking the product they will stick to it. This strategy is best suited for market share acquisition,” Dutta explained.

An executive from a top FMCG firm said on the condition of anonymity that there will eventually be a price war in whichever segment Reliance enters. He explained that while Reliance was still setting up its distribution network, over time due to its B2B supply chain, it will be able to push its products into retail stores.

Some distributors who spoke on the condition of anonymity said it would not be easy to move the leaders in the segment as these companies have a fixed customer base and it might be difficult to topple brands that have been in the market for a while.

Reliance followed the same strategy with its carbonated beverage, Campa Cola. It relaunched Campa at a price point of Rs 10 for 200 ml, Rs 20 for 500 ml, Rs 30 for 600 ml, Rs 40 for one litre, and Rs 80 for two litres.