Skincare industry in india — Presentation Transcript 1. SKINCARE INDUSTRY IN INDIA DOA NAQVI MBA-Sem.III 2. INTRODUCTION Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Its principal constituents are Household Care, Personal Care and Food & Beverages. Indiaʹs FMCG sector is the fourth largest sector in the economy. 3. SEGMENT-WISE BREAK UP OF THE FMCG SECTOR IN INDIA HUL,Nirma,Godrej Consumer products,ITC,P&G,DaburReckett & Coleman. Fabric wash; household cleaners (dish/utensil cleaners,floor cleaners,air fresheners,insecticides and mosquito repellents,metal polish and furniture polish). HOUSEHOLD CARE Oral care, Hair care,Skin care,Personal wash (soaps),cosmetics & toiletries,deodorants,perfumes, female hygiene products. PRODUCTS PERSONAL CARE SEGMENT Colgate Palmolive,HUL, Amway,L‟Oreal,Lakme,Marico,Cavin Care,Fem Care,Emami,P&G,Himalaya,ITC, Godrej Consumer products . MAJOR PLAYER 4. United Breweries,GlaxoSmith Kline,PEPSICO,Coca Cola,Radico,Dabur,Real etc BEVERAGE : Health beverages,Tea,Coffee,Bottled Water,Juices,Liquor etc. Parle Agro, Brittania, Nestle, Cadbury, Pepsi Co., CocaCola etc. FOOD : Staples, cereals, bakery products (biscuits, breads, cakes, snack foods, chocolates, icecreams, branded flour, branded rice, ready-to-eat packaged foods etc. FOOD &BEVERAGES MAJOR PLAYERS PRODUCTS SEGMENT 5. INDIAN MARKET FOR PERSONAL CARE PRODUCTS 6. PROJECTED GROWTH Subject to sustained overall GDP growth rates of ~8-9% p.a., the overall Indian personal care market has the potential to grow at 15%-16% p.a. (much higher rates for select segments like colour cosmetics, skin care and deodorants) and thereby double to ~$8-bn by 2012-13. 7. SKIN CARE INDUSTRY OF INDIA The skin care market belongs to the Personal Care segment of the FMCG sector in India and is valued at $180 million in India (Approx. Rs.72,000 Cr.) With safe and effective procedures, advancement in medical technology, increase in awareness, the Indian Skin care solutions business is growing very fast. 8. The skin care market can be segregated into toners, cleansers, sunscreens, anti-wrinkle creams, dark circle removing creams, astringents, facial creams, moisturizers, fairness creams, day and night creams, etc. NEED SATISTACTION : - Personal hygiene - Soft & Smooth skin - (to look beautiful) 9. The skin care market is at a primary stage in India. The penetration level for the rural market is relatively low. However, within a period of five-six years, the use of skin care products has increased significantly in India. New players such as Avon and Oriflame have entered the market with the natural ingredient benefit platform, which could further spur growth. 10. REASONS FOR GROWTH IN THE SKIN CARE INDUSTRY IN INDIA Concerns about hygiene and personal grooming drive sales. Discounts boost growth in the face of economic uncertainty. Domestic players expand their presence. Chained retailers create opportunities for point-of-sale marketing. Rising affluence and sophistication to drive future growth.
11. VALUE CHAIN ANALYSIS12. INBOUND LOGISTICS Indian skin care industry typically uses specialty chemicals,such as surfactants, fragrance compounds, polymer compounds and UV filters as activeingredients. Specialty chemical manufacturers supplying to skin care are adopting „greenchemistry‟ principles to better meet consumer demand for natural and safer products andincreasingly stringent regulatory requirements. Advances in the area of nanotechnologyare helping researchers create breakthroughs in biotechnology.13. OPERATIONS High R&D expenditure and a large no. of innovations (“green”chemistry) by the Indian skin care product formulation companies. Some companies arenow backwardly integrated in the skin care ingredients space. The recent marketdevelopments and changed competitive landscape with the advent of large corporationshave contributed to changing the scenario.14. OUTBOUND LOGISTICS Large scale retail establishments- Department stores ( BigBazaar, Visual Mega Mart, Reliance Retail stores .) Supermarkets or self service stores -Large scale retail shops operating at lower costs, selling at lower price.(HyperCITY, ApnaBazar, Spencers, Subhiksha.) Convenience stores or General stores orVariety stores. Multiple Shops or chain stores. Specialized stores- These are the shopsthat deal in only one or two special types of goods. Shoppers Stop & Globus .15. MARKETING/AFTER SALES SERVICES Advertising is done through print,electronic & television media. No after sales services as such- (money-back offeravailable for certain product brands)16. FIVE FORCE MODEL17. BARRIERS TO ENTRY Low import duty has enabled many international brands toenter into the domestic market. Competition amongst domestic players to enter the ruralmarket. (Distribution networks being beefed up)18. BARGAINING POWER OF SUPPLIERS Some of the companies are integratedbackwards, which reduces the suppliers importance. Manufacturing is largely outsourceddue to globalization, the skin care product distributors in the developing countries arestruggling to capture and retain their market share from the multinational companies.19. BARGAINING POWER OF BUYERS In case of branded products, there is little thatthe consumer can influence, but intense competition within the skin care companiesresults in value for money deals for consumers -(e.g. buy one, get one free concept).20. RIVALRY BETWEEN EXISTING FIRMS Competition is faced from both domestic,MNCs and also from cheaper imports, which are increasingly visible in urban markets.Price wars are a common phenomenon. Highly scattered market and poor transportinfrastructure limits the ability of MNCs and national players to reach out to remote ruralareas and small towns. Low brand awareness enables local players to market theirspurious look-alike brands.21. PRESSURE FROM SUBSTITUTE PRODUCTS The best part in skincare sector isthat the substitutes here are found within the sector itself so if the customers change theirconsumption pattern then too the effect will be on the company but the whole sectorremains unaffected.22. CONSUMER PERSPECTIVE With rising education levels and increased brandpromotion by the personal care manufacturers, the aspirations of the younger generationhave been turning to the branded personal care products. Brand awareness is extremelyhigh in the urban markets but brand loyalty is very low. In rural markets, the opposite is
true. Smaller product packs to attract the consumers (those who are open to experimentsand those who have lower buying capacity).23. MARKET PLAYER‟S PERSPECTIVE Pricing, brand equity and distributionnetwork are the key differentiating factors in the skin care market. India, being a bigcountry, has different demands from different regions. Price wars are forcing manyplayers to offer discounts and this has reached a stage today where some companies arelaunching new products with discounts.24. MAJOR PLAYERS OF THE SKIN CARE INDUSTRY OF INDIA25. MARKET SHARE (%) OF SKIN CARE COMPANIES (Basis retail value rsp. ‟09)26. HINDUSTAN UNILEVER Ltd. Hindustan Unilever Limited (HUL) is Indias largestFast Moving Consumer Goods Company, with over 20 distinct categories in Home &Personal Care Products and Foods & Beverages. The company‟s Turnover is Rs. 17,523crores (for the financial year 2009 - 2010). Major skin care products are: > Fair andLovely, Lakme, Pond‟s and Vaseline > Breeze, Dove, Hamam, Lifebuoy, Liril, Lux,Rexona and Pears.27. CAVINKARE LTD. In 1983 with a single product, CavinKare started out as a smallpartnership firm. The Company that began its journey as Chik India Ltd was renamed asCavinKare Pvt. Ltd (CKPL) in 1998. Smart marketing and clear product positioning notonly ensured CavinKares growth but also helped the company broaden its productportfolio extensively. Major skin care products- > Fairever, Fairever Fruit, Spinz Talc,Spinz Deodrants,Hi5 Deodrant and Nyle Cold Cream and Lotion.28. GODREJ CONSUMER PRODUCTS Godrej Consumer Products (GCPL) is a leaderamong Indias Fast Moving Consumer Goods companies, with Personal and Home CareProducts. GCPL is driven by the mission to continuously enhance the quality of life ofconsumers in high-growth markets with its products. Major skin care products are : > FairGlow, Cinthol (soaps, deodorants and talcum powder),Vigil & Godrej No.1.29. EMAMI LIMITED Emami Limited is a coveted Rs 1000 crore business entity, aleading player in the personal and healthcare consumer products industry in Indiaengaged in manufacturing and marketing of health, beauty and personal care productsthat are based entirely on ayurvedic formulation. Major skin care products of thecompany are as follows : > Boroplus antiseptic cream, Boroplus prickly heat powder,Fair & Handsome, Malai Kesar Cold Cream & Navratna cool talc.30. SWOT ANALYSIS Strengths 1. Low operational cost. 2. Presence of establisheddistribution network in urban as well as rural areas. 3. Presence of well known brands.Weakness 1. Low exports level. 2. „Me-too‟ products which legally mimic the labels ofestablished brands narrow down the scope of skin care products in rural & semi-urbanmarket.31. SWOT ANALYSIS cont. Opportunities 1. Untapped rural market. 2. Rising incomelevel of consumers. 3. Large domestic market- 1 billion population 4. Export potential.Threats 1. Removal of import restrictions resulting in replacing of domestic brands. 2.Slowdown in rural demand. 3. Tax & regulatory structure.32. CONCLUSION Multinational players with international brands have a strongpresence in the Indian personal care segment. Local brands too are gaining a foot-holdingthe market by innovatively developing value offerings to meet the unique needs of theIndian consumer. Going ahead, it will be important to develop R&D capabilities tofurther customize products for Indian consumers, create greater awareness among the
burgeoning middle class and ensure effective distribution reach to service them. Thecompanies that are able to develop a judicious mix of the above will be the eventualwinners. The time is ripe to review one‟s strategy and come up with innovativeapproaches to help realize the full potential of the Indian skin care sector.