 "Worry lines appear on F&L")
For 38 years, Hindustan Unilever (HUL) has depicted Fair & Lovely (F&L) as a girl's best recourse to better her prospects in life and career. Adding that touch of glow to her face, it would boost her confidence. As a result, the fairness cream has lorded over the Rs 2,700-crore fairness market.
But Fair & Lovely's charm may be fading, as the Rs 1,500-crore brand, (with a market share of close to 55 per cent), has been struggling for the last few quarters.
By the company's own admission during its recent June quarter results, the fairness cream, one of its blockbuster products in its portfolio, which until a few seasons ago, consistently delivered double-digit growth, was responsible for pulling down the performance of personal care - a segment that gives the Rs 25,810-crore company nearly 30 per cent of its overall revenues.
A relaunch gone wrong
For long, the brand has catered to the Indian pre-occupation with fair skin. However, its customers in urban centres have since moved on to other forms of skincare such as multi-purpose moisturisers, anti-ageing creams etc.
HUL's travails began, analysts say, with the relaunch of Fair & Lovely's flagship product in June last year.
The relaunch saw the core variant being positioned as a multi-purpose product that not only lightened skin colour, but also helped minimise dark spots, remove suntan and dead cells and reduce dark circles. HUL also increased the price of Fair & Lovely by about 14 per cent. That is when its relevance with rural audience got affected.
"Things began going downhill from then," says Nitin Mathur, consumer and retail analyst at Mumbai-based brokerage Espirito Santo Securities. "A one or two rupee increase may not make a big difference to us, but it does to rural consumers," he adds.
Coming at a time when consumers were cutting back on discretionary spends, the price hike, explain analysts, pushed users to the extreme of spurning the product. "When a household has to choose between essentials and those products whose purchases can be deferred, a fairness cream will certainly fall in the latter category," V Srinivasan, FMCG analyst at Mumbai-based Angel Broking says.
Mistaken for a knock-off
The colour of the cream hadbeen changed from white to pink and the packaging was recast during the relaunch. As a result, there has been a lack of consumer acceptance of the advertised makeover, especially in areas that do not have wide-ranging media access.
Paranjpe in an analyst call following the results on Friday had said, "We have found that product acceptance has been an issue, particularly due to the change in colour...in media-dark areas. Consumers there were unable to see the communication around this. As a result of which in large places, which are media-dark and small rural markets, (making up) large parts of India that still don't get enough media, there were concerns about this not being the original, but a spurious product."
Fair & Lovely, which till now had triggered a thriving market of knock-offs, was at the receiving end.
While Paranjpe declines to discuss his strategy on Fair & Lovely in the months to come, he does point out, "We are taking necessary action to address the issue and bring Fair & Lovely back on track".
Future recourse
Persons in the know, however, say that a possible relaunch, yet again, is on the cards in the second half of this fiscal to address the impression of a spurious product.
HUL, in the June quarter, did attempt to tackle this by launching what it called the 'Five Crore Challenge', where it announced through a commercial that it would give Rs 5 crore to any individual who could prove that another fairness cream was better than its product.
Rivals such as L'Oreal were quick to hit back with print ads that said it had a complete solution to fairness in its portfolio.
But why reposition a brand if nothing was wrong? Analysts say, HUL is staring at a fairness cream market that is fast maturing in urban areas and a consumer base which is finding alternate solutions.
A fading market
While the men's fairness-cream market, which had resorted to Fair & Lovely for decades, is growing in double digits, the market for use by women, which is the bigger of the two, is growing at about 7-8 per cent.
In the last few years, consumers, especially in urban India, have evolved in their preference for skin lightening solutions, moving to products that appear to have an international appeal and edge to them.
Everyone from Nivea to Procter & Gamble, L'Oreal, Garnier, Emami and Dabur have addressed this with products that boast of either new technology (such as Olay Regenerist or Nivea's Skin Whitening Solutions) or natural ingredients (such as those from Dabur and Emami). HUL's diversified skincare has fared well too. It has innovated across brands such as Dove, Ponds and Vaseline with skincare for ageing, skin-lightening etc.
Moreover, the paradigm of the daily skincare cream has changed from fairness and antiseptic creams of yore. New categories such as beauty-benefit creams are being positioned as multi-benefit products that have moved away from the notion of good skin being synonymous with fairness.
Fair & Lovely's recent relaunch had tried to address the demands of a changing audience. Only, urban areas, say analysts, no longer offer Fair & Lovely traction as earlier. That means the rural and semi-urban areas offer the only hope for the brand.
Hence, a setback in these markets has been so pronounced on the brand. The company will now try to revive the magic of Fair & Lovely in these markets.
But Fair & Lovely's charm may be fading, as the Rs 1,500-crore brand, (with a market share of close to 55 per cent), has been struggling for the last few quarters.
By the company's own admission during its recent June quarter results, the fairness cream, one of its blockbuster products in its portfolio, which until a few seasons ago, consistently delivered double-digit growth, was responsible for pulling down the performance of personal care - a segment that gives the Rs 25,810-crore company nearly 30 per cent of its overall revenues.
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"We delivered double-digit growth in most other segments in personal products including haircare, oral care and colour cosmetics. Even within skincare, brands such as Lakme, Ponds and Vaseline did well during the quarter. What impacted growth, however, was Fair & Lovely," Nitin Paranjpe, MD & CEO, HUL, who has been elevated to president, home care, Unilever, said about the two per cent growth that personal products as a whole saw during the June quarter.
A relaunch gone wrong
For long, the brand has catered to the Indian pre-occupation with fair skin. However, its customers in urban centres have since moved on to other forms of skincare such as multi-purpose moisturisers, anti-ageing creams etc.
HUL's travails began, analysts say, with the relaunch of Fair & Lovely's flagship product in June last year.
The relaunch saw the core variant being positioned as a multi-purpose product that not only lightened skin colour, but also helped minimise dark spots, remove suntan and dead cells and reduce dark circles. HUL also increased the price of Fair & Lovely by about 14 per cent. That is when its relevance with rural audience got affected.
"Things began going downhill from then," says Nitin Mathur, consumer and retail analyst at Mumbai-based brokerage Espirito Santo Securities. "A one or two rupee increase may not make a big difference to us, but it does to rural consumers," he adds.
Coming at a time when consumers were cutting back on discretionary spends, the price hike, explain analysts, pushed users to the extreme of spurning the product. "When a household has to choose between essentials and those products whose purchases can be deferred, a fairness cream will certainly fall in the latter category," V Srinivasan, FMCG analyst at Mumbai-based Angel Broking says.
Mistaken for a knock-off
The colour of the cream hadbeen changed from white to pink and the packaging was recast during the relaunch. As a result, there has been a lack of consumer acceptance of the advertised makeover, especially in areas that do not have wide-ranging media access.
Paranjpe in an analyst call following the results on Friday had said, "We have found that product acceptance has been an issue, particularly due to the change in colour...in media-dark areas. Consumers there were unable to see the communication around this. As a result of which in large places, which are media-dark and small rural markets, (making up) large parts of India that still don't get enough media, there were concerns about this not being the original, but a spurious product."
Fair & Lovely, which till now had triggered a thriving market of knock-offs, was at the receiving end.
While Paranjpe declines to discuss his strategy on Fair & Lovely in the months to come, he does point out, "We are taking necessary action to address the issue and bring Fair & Lovely back on track".
Future recourse
Persons in the know, however, say that a possible relaunch, yet again, is on the cards in the second half of this fiscal to address the impression of a spurious product.
HUL, in the June quarter, did attempt to tackle this by launching what it called the 'Five Crore Challenge', where it announced through a commercial that it would give Rs 5 crore to any individual who could prove that another fairness cream was better than its product.
Rivals such as L'Oreal were quick to hit back with print ads that said it had a complete solution to fairness in its portfolio.
But why reposition a brand if nothing was wrong? Analysts say, HUL is staring at a fairness cream market that is fast maturing in urban areas and a consumer base which is finding alternate solutions.
A fading market
While the men's fairness-cream market, which had resorted to Fair & Lovely for decades, is growing in double digits, the market for use by women, which is the bigger of the two, is growing at about 7-8 per cent.
In the last few years, consumers, especially in urban India, have evolved in their preference for skin lightening solutions, moving to products that appear to have an international appeal and edge to them.
Everyone from Nivea to Procter & Gamble, L'Oreal, Garnier, Emami and Dabur have addressed this with products that boast of either new technology (such as Olay Regenerist or Nivea's Skin Whitening Solutions) or natural ingredients (such as those from Dabur and Emami). HUL's diversified skincare has fared well too. It has innovated across brands such as Dove, Ponds and Vaseline with skincare for ageing, skin-lightening etc.
Moreover, the paradigm of the daily skincare cream has changed from fairness and antiseptic creams of yore. New categories such as beauty-benefit creams are being positioned as multi-benefit products that have moved away from the notion of good skin being synonymous with fairness.
Fair & Lovely's recent relaunch had tried to address the demands of a changing audience. Only, urban areas, say analysts, no longer offer Fair & Lovely traction as earlier. That means the rural and semi-urban areas offer the only hope for the brand.
Hence, a setback in these markets has been so pronounced on the brand. The company will now try to revive the magic of Fair & Lovely in these markets.