The world’s largest consumer products company, Cincinnati-headquartered Procter & Gamble (P&G), has no plans to take its eyes off the second-largest consumption market in the world - India.
"We will continue to evaluate and invest in sustainable growth opportunities to reach more consumers in more parts of India," a company spokesperson said.
The clarification comes at a time when P&G globally has been facing shareholder pressure over its performance in key markets such as the US, China and Western Europe. Slowing sales growth in these markets prompted P&G to cut its growth forecasts twice between April and July, forcing the company's global CEO Bob McDonald to announce a plan to reassure that it was focused on getting growth back on track.
This plan included concentrating on its 40 biggest businesses, 20 biggest new products and 10 most important developing markets. While India is part of P&G's core developing markets club including Brazil, China and Russia, its product launches have been comparatively lower than rivals such Hindustan Unilever (HUL) and ITC in the past few months, say sector analysts.
Barring Olay Face Wash and the high-profile relaunch of air freshener Ambipur recently, analysts point out that there has been no recent launch from P&G.
The company spokesperson says, "We are among the fastest growing consumer goods companies in India. In the past decade, P&G India has entered more than seven new categories – including baby care, skin care, diapers, blades & razors, toothbrushes, hair colour, batteries and air care via a combination of brand launches and acquisitions. We have also had new launches within existing categories like feminine care, hair care, laundry powders & detergent bars, skin care, baby care and blades & razors."
Analysts say that since P&G is under immense pressure from its shareholders globally to shore up numbers, its focus in India is likely to be muted in the short term. However, experts say that the company is expected to bounce back with new product launches and renewed aggression in the domestic marketplace by the next financial year.
P&G’s India units including its unlisted entity P&G Home Products and listed entities Gillette India and P&G Hygiene & Healthcare together contribute just about 1 per cent to the global giant’s $83.7 billion (Rs 4.18 lakh crore) turnover. However, from a market share point of view, the company is significant in India, say analysts. In the core categories of detergents, shampoos and toothbrushes, P&G has a market share of 19 per cent, 30 per cent and 20 per cent respectively, ranking second after HUL. In categories such as baby care and feminine care, P&G is the undisputed leader with its Pampers and Whisper brands.
In competitive categories such as laundry, oral care and hair care, P&G grew its share in the past three years, moving from 14 per cent in detergents, 24 per cent in shampoos and 15 per cent in toothbrushes, say sources.
It is unlikely, then, to let go off its position after having come this far, say analysts.
Says the company spokesperson, “India has always been a consumption economy and that story continues to be strong owing to underpenetrated categories, and strong demographic dividend.”
According to source, P&G is expected to step up its presence in oralcare with the launch of a toothpaste, which has been pending for a while now. It is also expected to increase its aggression in detergents in an effort to improve share.
