Hind Lever kicks off shampoo price war

Offers one free with every bottle of Sunsilk & Clinic Plus.

The price war between consumer goods giants Hindustan Lever and Procter & Gamble in the detergents market has spilled over to shampoos.

Hindustan Lever, which leads the shampoo market with an over 50 per cent share, is offering a bottle free with every bottle of Sunsilk and Clinic Plus. This essentially means a 50 per cent price cut.

Clinic Plus and Sunsilk have 25 per cent and 15 per cent market shares, respectively. Procter & Gamble has an over 15 per cent share in the shampoo market.

A source in Hindustan Lever indicated that the offer could be extended to the company's other brands, which include Clinic All Clear, Lux and Ayush. Clinic All Clear has a 10 per cent market share, Lux 3 per cent and Ayush 1.5 per cent.

"Though this initiative will reduce the company's profitability in the short term, it will scale up economies. Thanks to appropriate sourcing and leveraging of supply-chain efficiencies, we will be able to neutralise the impact," said a Hindustan Lever executive.

However, Procter & Gamble Executive Director Ashok Chhabra said: "We will not be able to comment at this stage. We focus on offering quality products to consumers and not on competition."

The shampoo business contributes around Rs 500 crore to Hindustan Lever's turnover. Since sachets account for 70 per cent of its shampoo sales, sales through bottles bring in only around Rs 150 crore, which is less than 2 per cent of its turnover.

Procter & Gamble currently has three shampoo brands in its stable, Head & Shoulders, Pantene and Rejoice.