Shampoo war enters its second round

Procter & Gamble cuts Rejoice price by a fifth.

The price war between consumer goods giants Hindustan Lever and Procter & Gamble has intensified in the Rs 1,000 crore shampoo market. Procter & Gamble has slashed the price of Rejoice, its mass-market shampoo brand, by over 20 per cent. Rejoice is positioned against Hindustan Lever's best selling brand, Clinic Plus.

The price of a 100 ml pack of Rejoice has been slashed by 23 per cent to Rs 30 while a 200 ml pack has been marked down by 21 per cent to Rs 59.

In April, Hindustan Lever had relaunched Clinic Plus as a hair health benefit formulation and had also cut its price. Clinic Plus is sold at Rs 30 for 100 ml, Rs 55 for 200 ml and Rs 90 for 300 ml. For the first time, Procter & Gamble is matching Hindustan Lever's prices, at least in the 100 ml segment.

Chester Twigg, director (marketing and sales), Procter & Gamble India, told Business Standard: "We have seen a very encouraging response to the launch of Rejoice in India. The new prices are in keeping with our policy to offer world-class brands to Indian consumers at a competitive price. Procter & Gamble has no plans to further reduce prices of its Pantene and Head & Shoulders shampoo brands."

When contacted, Hindustan Lever executives refused to comment on the Procter & Gamble move. They also declined to comment on whether the company would follow suit.

Hindustan Lever Chairman MS Banga had been saying that the company would take all necessary steps to enhance and protect its market share. Hindustan Lever's shampoo brand portfolio, including Sunsilk, Clinic Plus, Clinic All Clear and Ayush, command a market share of 50 per cent. Procter & Gamble, with Pantene, Head & Shoulders and Rejoice, accounts for 15 per cent of the market in value terms.

Launched in 1988, Clinic Plus has a 25 per cent market share. Rejoice was launched in January 2004 and, according to Procter & Gamble, Rejoice has been performing well in the market.

Sachets account for over 70 per cent of the Rs 1,000 crore shampoo market. The per capita consumption of shampoos in India is estimated at 38 ml, very low compared with global consumption levels.