HUL plays safe with Pond's Age Miracle

Although Pond's Age Miracle signifies Hindustan Unilever's entry into the premium skin care market in India, the company is taking careful steps since the category is still very new in India.

"Our main aim right now is to build the category. We are not afraid of competition, but welcome it instead. More competitors will help us build the category further," said Ashok Venkatramani, vice-president and category head, skin care, HUL.

Priced at Rs 450 per 50 ml bottle, Pond's Age Miracle day cream is the highest selling product in the Age Miracle range, which includes seven different anti-ageing beauty products. The product, however, faces stiff competition from Procter & Gamble's recently launched Olay, an anti-ageing cream priced at Rs 599 per 50 grams bottle.

The company strategically priced the product such that it can be bought by the higher middle class. An internal study conducted by the company had revealed that, on an average, the urban consumer spends Rs 900 a month on skin care. Hence the product has been valued like a prestige brand, but priced and marketed as a masstige brand, prestige for the masses. As part of its category building measures, HUL is investing in advertising and providing skin care consultancy at big retail outlets. In the last two years, the company's total ad spends have gone up by Rs 450 crore. In order to increase its presence in large format retail outlets, HUL has also inked a joint venture agreement with South African company, Smollan Holdings, to provide in-store services and point-of-purchase management.

Anti-ageing, which is a big market in the western world, is catching up in India at a growth rate of 40 per cent. It is valued at Rs 50 crore in the Rs 2,300 crore skin care market in India.

HUL rolled out this range in 500 outlets in the first phase of its launch last year. The brand is currently present in 2000 outlets in 50 cities and several semi-urban areas in the country. The company has plans to expand the number of outlets to 5,000 by the end of next year and is targetting metros as well as second-rung cities. It has received the highest response from Bangalore, Ludhiana and Lucknow.

Pond's Age Miracle is part of Unilever's global portfolio. The company currently sources the entire range from its Thailand facility, but has plans to manufacture it in India. HUL's Personal care products sales, at Rs 3780.15 crore, account for 29 per cent of its total revenues of Rs 13,035 crore. Other brands in the company's personal care product portfolio include Lakme cosmetics and beauty salons.