Philips is giving a bigger push to men’s grooming products to grow its personal care appliances business in the country.
The Indian woman wants more style from her man. This is the message delivered by Philips Electronics India’s latest television commercial promoting its male grooming appliances range. The commercial uses humour to show John Abraham in various avatars donning several unique facial styles.
The campaign has been triggered by Philips’ decision to give a bigger push to its personal care appliances, especially those for male grooming. The focus is in line with a global shift in Philips’ strategy implemented last year — towards being a health and well-being driven company. And personal grooming was identified as one of the key drivers of this shift. “The thrust on these segments will allow the company to migrate from being just a dependable brand to one that is more youth focused,” says Anjan Bose, business head and vice-president, consumer lifestyle, Philips Electronics India.
Philips’ portfolio in India consists of four categories: Men’s shaving (face shavers), men’s grooming (face stylers), female hair removal (epilators) and female hair care (hair dryers and hair straighteners). But for now, Philips is banking on hair dryers and face stylers as the two pillars of its personal care business. The price for Philips’ male grooming products is in the range of Rs 895-Rs 5,495, whereas female grooming products retail between Rs 725 and Rs 3,495.
The range for women, which Philips saw as a low-hanging fruit, saw significant investment last year. This year, it is the turn of the male grooming range. To begin with, Philips is going after the metro markets.
In India, the contribution of Philips’ personal care division (which includes both male and female grooming products) to its turnover of Rs 3,724 crore is in single digits. But Philips sees this changing in the days to come. The personal care segment is the fastest growing (54 per cent year-on-year) one in the consumer lifestyle business in India. Compare this to China, where personal care contributes to close to 45 per cent of Philips’ small appliance sales.
Room for growth
To put things in perspective, personal care appliances are a nascent market in India. According to industry estimates, this year the category is estimated at 2 million units (2011) and is witnessing 35 per cent year-on-year growth. Hair dryers make up bulk of the sales (1.2 million), while hair stylers (0.2 million), hair straighteners (0.35 million), male shavers (0.2 million) and trimmers (0.35 million) are still small.
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CUT & DRIED Shares of personal care appliances by brand | |||||
| Brand | Company | 2007 | 2008 | 2009 | 2010 |
| Philips | Philips Electronics | 14.4 | 16.3 | 17.4 | 18.5 |
| Panasonic | Panasonic Home Appliances | 1.1 | 12.1 | 13.7 | 14.7 |
| Morphy Richards | Bajaj Electricals | 4.7 | 5.5 | 5.8 | 6.1 |
| Braun | Procter & Gamble | 2.1 | 2.2 | 3.1 | 3.6 |
| Others | - | 77.7 | 63.9 | 60.0 | 57.0 |
| Source: Euromonitor; shares in per cent | |||||
While Philips is the leader, its competitors include heavyweights like Panasonic, Braun (Procter & Gamble), Remington and Morphy Richards (marketed by Bajaj Electricals). Retailers like Croma have also thrown their hats into the ring by importing personal care appliances from China and selling them under their private labels. The bigger threat is the huge unorganised market where Chinese and Taiwanese brands continue to woo consumers with cheaper price points.
Industry watchers say adoption of such products in India has been slow largely due to cultural and geographical reasons. “In Europe and North America, snow and low temperatures make blow drying hair a necessity. Hair styling too is more ingrained in their culture and is not limited to special occasions,” claims Aarushi Agarwal, director, marketing, consumer lifestyle, Philips Electronics India. In the case of hair removal, Indian women prefer the affordable salon services. In the male grooming segment, electrical (dry) shaving as a concept is new to India, where culturally men are used to wet shaving. A Euromonitor 2010 study adds, “Majority of consumers prefer to use razors and blades which are cheaper and do not require electricity to operate.”
Yet Philips sees huge headroom available for growth. Look at the related categories for proof. With young men in urban India showing an increasing appetite for personal care products, companies are ramping up their male grooming portfolios. Procter & Gamble’s Olay and Gillette brands have launched male skincare ranges recently. In the skin care space for women, consumers are up-trading to specialised products like anti-ageing lotions and under-eye creams. The influence of the media, increase in travel and rising disposable incomes are driving consumers to spend more on improving their self-image, say analysts. And for young professionals, using these appliances has become a ‘status symbol’, adds the Euromonitor study.
The road ahead
So how does Philips plans to grow this vertical? A three-pronged strategy is in place: Launching local insight-driven products, building awareness through consumer engagement and education, and a targeted distribution.
The company’s existing personal care portfolio consists of 27 stock keeping units: 14 for women and 13 for men. Over the last one year, the focus has been on local innovation. “In the last three months alone, we have launched five products based on local insight. We hope to close the year with five to 10 more launches,” adds Bose. Close to 60 per cent of the products in the company’s domestic appliances portfolio are localised.
The local drive was prompted by the outcome of a three-month research conducted last year where 11,000 males across eight cities and 10,000 females in 10 cities were interviewed. A key finding was that women in India did not prefer to use hair dryers because they felt the heat damaged their hair. This insight led to the launch of the Salon Shine range of hair dryers built on a technology that prevents hair damage and makes hair shine.
For the male grooming range, the biggest innovation this year has been the 5-in-1 grooming kit which allows four different attachments to trim and style facial hair. This grooming kit has been specifically made for the Indian market and is priced at an attractive Rs 1,995. “It was an outcome of research that showed that a huge chunk of the 18-to-25-year-old category shaved only during special occasions and preferred a stubble look or shadow look. And that look was mostly created at a salon.”
Volumes in personal care appliances are still low so the products continue to be imported. A research and development team from India sends feedback to the global development and design team in Amsterdam, where products are made keeping in mind the Indian consumer. But Agarwal does not rule out the possibility of a manufacturing base in India as the market evolves.
Building awareness among consumers will also be key. Actor John Abraham was roped in to generate awareness on different facial styles. Currently, Philips spends 8-10 per cent of its turnover from personal care appliances on advertising and promotion. However, with increasing focus on the category, Bose sees this increasing to 25 per cent next year.
Tapping digital touch points to reach the youth is also on the agenda. An exclusive Youtube channel has also been created for Philips India to generate awareness for its products through a Facebook page. “Consumer education is at the forefront in driving growth in this category and the company has created a Style Sutra booklet which will be distributed across 4,000 outlets which include modern retail chains,” explains Agarwal. Purnendu Kumar, associate vice-president, Technopak, explains, “Going after youth is a good move as it will help recruit first time users. Changing habits is difficult.”
Product innovation and education is one part of the story, the other is distribution. Until last year most of the personal care appliances were available in small domestic appliance outlets (that sell iron, juicer/mixers). “We realised this is not where the youth really shop and hence this year we entered the cosmetics channels,” says Agarwal. Now, the range retails through 750 such outlets in eight cities.
Philips is keen on exploiting the gadget channel and is currently piloting the initiative in Delhi, Mumbai and Bangalore. “Men typically do most of their browsing at gadget stores that retail products like speakers and laptops,” points out Bose. “The salon channel has not been exploited yet, but is a strategic initiative the company is working on.”
The heat is on
Rivals, however, are not sitting idle. Panasonic, for instance, is also turning up the heat. Last year the company, which had traditionally focused on the air-conditioner and the television segments in India, decided to turn the spotlight on its health and beauty division, which contributes 1 per cent of Panasonic’s India revenues of Rs 3,200 crore (FY 2010-11).
Panasonic has 20 grooming products in its portfolio, ranging from hair dryers to shavers, and is ploughing money into research and development to develop localised products. “India is the first country where we launched a Rs 599 hair dryer,” says Manish Sharma, director, marketing, Panasonic India. The new range of hair dryers has been equipped with hair protection temperature. In shavers, Panasonic’s line-up in India consists of both wet and dry shavers. The company is harping on the durability and reliability of its products. “Consumers who purchase low-cost products face many problems; for example, the coils in such products gets damaged quickly,” says Sharma.
The company is also ramping up its distribution to access a bigger market. “We want to increase our reach from the current 1,500 to 3,000 outlets in the next three months,” says Sharma.
To take on the market leader, Morphy Richards is looking to leverage the strength of Bajaj Electricals in modern retail. Bajaj Electricals is among the top players in small appliances like coffee makers, oven-toaster-grillers and kettles. “We are working at placing display units in modern trade formats for our upcoming range of hair dryers,” says a Morphy Richards official.
Kumar of Technopak points out that modern retail will be a huge driver of growth for the personal appliances category, where manufacturers can use the platform to educate consumers. “With the exception of a few, there are hardly any national multi-branded outlets for consumer durables and electronics in India,” notes Kumar.
As the leader in this space, Philips might have an edge, but changing consumer habits radically will not be a cakewalk.
