Despite rising input and labour costs, the Rs 200,000-crore home and personal care (HPC) industry is set to grow 15 per cent year-on-year in the next five years, owing to continuous growth seen by domestic players, and the entry of multinational companies through innovative products. The industry has recorded eight per cent growth in the last few years.
Global fast-moving consumer good (FMCG) manufacturers, including Stepan, Dow and Huntsman are planning to foray into the Indian market, while companies like Unilever, Clariant, BASF and Akzo have already established their leadership in their different fields. India is now home to the biggest international players in the fragrance sector, like Shiseido, Elizabeth, Arden and Pierre Cardin, along with direct-selling firms Avon and Oriflame. Recently, another direct marketing firm, Modicare, also launched a range of cosmetics and skin-care products.
“Economic growth has shifted from the West to the East. Hence, global leaders plan to introduce innovative products in India,” said Nadir Godrej, managing director, Godrej Industries, one of India's largest producers of personal care products.
“While the fear for the squeeze in margins continues due to stiff competition, the overall industry would grow with the introduction of innovative products,” Godrej said.
While comparing the Indian HPC industry with that of China, industry veteran B R Gaikwad said, “From the volume perspective, the HPC industry has 6.3 million tonnes of output in India, compared with 8.2 million tonnes in China. Hence, the HPC industry in India has immense potential for growth.”
The opening of the HPC industry in India offers new opportunity for consumers and challenges for manufacturers. There are concerns regarding the domestic tariff structures that can negate growth, chemical classification and opportunities through innovations which focus on sustainable carbon-neutral products from palm oil. China has demonstrated that laundry liquids, which are environment-friendly, have reduced the requirement for energy and water in washing.
According to Satish Wagh, chairman, CHEMEXCIL, input cost have risen in the last one year, and this would hit producers and retailers' margins substantially. “Quantifying the exact rise in raw material price is difficult. Still on an average, we can assume a 20 per cent spurt in input costs. Similarly, labour costs have also gone up significantly in the last few years.”
