Shampoo majors slug it out

Yesterday HLL announced the launch of 23 variants under the Sunsilk umbrella. The announcement came within a week of arch rival Procter & Gamble's global relaunch of its shampoo brand, Pantene. The timing of these two launches are not coincidental. And it's not the first time this is happening, at least in India. In 2001, for instance, Sunsilk extended to hair colour in India, to steal the thunder from P&G.

Then, P&G had just launched a new range internationally under the Pantene umbrella and it was a matter of time before the products would hit Indian shelves. Hair colour provided HLL the perfect opportunity to create excitement in the Sunsilk brand.

India was the first market outside Thailand, where Sunsilk extended into hair colour. Apart from the extension into hair colour, which eventually was pulled out, Sunsilk also added a dash of excitement to its shampoo portfolio. In 2006, it's no different. HLL has again dug into its international portfolio to launch a new range of colour enhancers and conditioners.

"Large multinational corporations always plan their move meticulously. So this could be anything but a knee jerk reaction," says a Mumbai-based marketing consultant. According to sources, the launch of the Sunsilk variants were planned a month in advance, much before P&G unveiled its closely-guarded Pantene plans to the media.

So is P&G the product innovator, while HLL (and its parent, Unilever) are sharp with market intelligence? Harish Bijoor, CEO, Harish Bijoor Consults, a marketing consultancy partly agrees.

"P&G has always been innovative, not only in terms of products, but also advertising and media use and developing service dimensions into the product development area," he said. But he added that both companies have a finger on the pulse of the market which is apparent in the way each one follows the other with their time-to-market strategies.

But there is another point of view. A Mumbai- based consultant says that Sunsilk has been smarter when it comes to India specific innovations. Sunsilk Black which was launched specifically for this market is among the most successful variants, points out another marketing consultant.

"While P&G has been strong on product innovation, like the coconut oil enhanced shampoos it launched last year, Sunsilk has been market led. In India atleast, Sunsilk has come up with a larger range of value added products, ranging from the 9-9 leave-on conditioner to the present launch," said the consultant.

But there are more reasons why the FMCG companies are bullish on the Indian shampoo market, despite penetration being low. Overall penetration levels for shampoos in India are extremely low at 38 per cent. Even in urban India, penetration is as low as 52 per cent. In value terms the per capita spend on shampoos is $ 0.3 as compared to Indonesia ($ 1.1) or Malaysia ($ 2.7). Only China is behind India at $ 0.2.

As a report by broking firm K R Choksey, points out, "Low penetration indicates the existence of unsaturated markets and provides an excellent opportunity for the industry players in the form of a vastly untapped market."

A sharp gap in the penetration levels and low per capita consumption provides tremendous growth opportunity for the FMCG companies in India."