Detergent Market in India as of 2015 (Surf Excel, Ariel, Nirma, Wheel, Tide, Ghari)

1. Detergent Market in India

2. Indian Detergent Market Landscape Current Market Size (Organized Detergent Market) 2015: Rs.15,000 Crore Total Volume 2013 (Production): 1.9 Million Tonnes CAGR (2012-2015): 11% approx. Washing Machine Penetration in India: 8.8% Indian Population Division: Urban: 33% Rural : 67% Households Owning Washing Machine: Urban : 27.5% of all urban households Rural : 0.6% of all rural households Source: Market Research Report on Detergent Industry in India by Niir Project Consultancy Services (NPCS)

3. Indian Detergent Market Landscape Detergent Powder Bars Liquid

4. Indian Detergent Market Landscape 1959 • HUL launched Surf Excel. 1969 • Nirma was launched. 1987 • RSPL launched Ghari. 1988 • HUL launched Wheel. 1991 • P&G launched Ariel. 2000 • P&G launched Tide. Timeline:

5. Indian Detergent Market Landscape 34 22.8 18 12 13.2 Market Share Division HUL Ghari P&G The Detergent market is dominated by following major players: 1. Hindustan Unilever Limited (HUL) 2. Rohit Surfactants Pvt. Ltd. (RSPL) 3. Procter & Gamble (P&G) 4. Nirma 5. Jyothy Laboratories & Others

6. 15% 40% 45% 0% 10% 20% 30% 40% 50% Premium Mid Scale Economy (Mass) Detergent Market Segmentation Surf, Ariel Rin, Tide Ghari, Nirma, Wheel, Fena Brands:

7. Porter’s Five Forces Model Competitive Rivalry Threat of New Entrants Bargaining Power of Suppliers Threat of Substitutes Bargaining Power of Buyers

8. We will measure the forces on the following scale: Very Low Low Medium High Very High

9. 1.) Competitive Rivalry Premium Price Segment • High • High because easy brand switching. • For Tier I and Tier II cities only and competitive rivalry is high there. • Surf Excel, Ariel, Henko • Surf Excel & Ariel face tough competition from each other, where Ariel offers fragrance, Surf Excel offers a bit lower price compared to Ariel. Mid Price Segment • Very High • Very high because more number of players, no loyalty, and customers switching to different price segments. • Tide Plus, Rin, Super Nirma Blue, Mr. White, etc. • Tide, faces lot of competition from Surf as well as Ghari, Ghari being low priced and good quality. Low Price Segment • Very High • Very high as Customers in this segment, easily switch brands based on small price differences also. Moreover markets are toppled easily by distribution strategies and promotions. • Nirma, Wheel, Ghari all face fierce competition in this segment based on price, product differentiation, distribution strategies

10. 2.) Bargaining Power of Suppliers Premium Price Segment • Low • Main ingredient required to be procured from suppliers is soda ash which is not an ingredient hard to make. • Suppliers are ready to provide good quality soda ash. • But still quality matters and hence bargaining power of suppliers is low but not very low. • E.g. Surf, Ariel, etc. Mid Price Segment • Very Low • Multiple suppliers exist, who provide desired quality of soda ash to these companies and hence they don’t have any competitive edge. • Moreover, suppliers do not want to lose huge contracts with behemoths like P&G and hence they have low bargaining power • E.g. Tide Low Price Segment • Very Low • Many suppliers of soda ash • High quality of soda ash is not required and it can be procured from any supplier. • Companies like Nirma produce their own soda ash (Backward Integration) • Hence suppliers have very low bargaining power. • E.g. Nirma, Wheel, Ghari, etc.

11. 3.) Threat of New Entrants Premium Price Segment • Medium • Entry is difficult as there are difficulties to get premium loyal customers. • But still with differentiated products it is still conquerable. Hence the medium price segment. • E.g. Henko from Henkel entered the premium price segment but then failed miserably. Mid Price Segment • High • Entry is easy as there are low barriers to entry • As it is FMCG industry it is easy to achieve high economies of scale. • E.g. Tide was launched in 2000 ,still it was able to get a decent market share Low Price Segment • Very High • Entry is very easy as there are low barriers to entry • Economies of scale • In this segment, even a small price difference can topple markets of a brand. • E.g. Ghari launched their business in 1987 when Nirma was at its peak but later the it overtook Nirma.

12. 4.) Bargaining Power of Buyers Premium Price Segment • Medium • Any product with a good price difference or differentiated features will be opted by buyers. • Hence price difference does change buyer behavior but differentiated products also tend to have their own say in market. • E.g. When Ariel came out with detergents with fragrance flavors, customers switched to that even when Ariel charged higher price then surf excel Mid Price Segment • High • Due to higher competition, bargaining power of buyers is usually high. • If companies have to resort to offers and lesser margins then that shows high bargaining power of customers. • E.g. Tide generally attracts customers with “20% extra”, etc. type of offers which shows buyers have good bargaining power. Low Price Segment • Very High • More number of players, customers in this segment are very cost sensitive. More offers have to be provided to attract customers. Buyers also demand quality improvements in products. This shows very high bargaining power of buyers. • E.g. Nirma, Wheel, Ghari. Ghari offered better quality and buyers switched to it and this Nirma & Wheel had to counter this with various measures.

13. 5.) Threat of Substitutes Premium Price Segment • High • In premium segment, frequency of purchase gets affected as customers able to pay premium prices also tend to spend more on maintenance. Hence they are preferring Dry Cleaning more which affects the premium segment more. Other alternatives, presumably high priced, makes this segment highly vulnerable. Mid Price Segment • Medium • Any New technologies, like liquid soaps, etc. can easily replace the existing players/ brands. • More people moving to higher segments, and increasing disposable income makes this segment little bit vulnerable to alternatives like Dry Cleaning. But still the market is huge and the whole market cannot move to alternatives, hence threat is medium. Low Price Segment • Low • There is no economical alternative/substitute which is cheap enough to replace already low-priced detergents. • So the threat from substitute products / alternatives for fabric- washing is low.

14. Porter’s Generic Strategies Cost Leadership Differentiation Cost Focus Differentiation Focus FocusBroadTargetNarrowTarget Lower Cost Differentiation Competitive Advantage MarketScope

15. Surf Excel Launched in 1959 in India as 1st Detergent Powder. One of the brands under Unilever. Ariel Launched in 1991 in India as Detergent Powder. One of the brands under P&G.

16. Surf Excel Product Range Surf Excel Matic Surf Excel Quickwash Surf Excel Easy Wash Surf Excel Liquid Wash

17. Surf Excel Product Range Surf Excel Matic Surf Excel Quickwash Surf Excel Easy Wash Surf Excel Liquid Wash Surf excel Quickwash with X-tra clean particles combines the power of stain removing products like blue, bleach and lemon. Multiple stains are removed with just 1 product. Surf excel Easy Wash is a superfine powder, in which tough stains are taken off in a jiffy. It is made with superior technology which unleashes the power of 10 hands Works in high water levels of front load washing machines. It has hand rub action power and is value for money. For 2 different types of washing machines, it offers 2 products: A.) Surf Excel Matic Top Load, B.) Surf Excel Matic Front Load. Surf excel Liquid Detergent works with the Dip Dab Drop formula. It has better dissolution with superior fragrance. It offers ‘Color care’, and is safe for hands.

18. Ariel Product Range Ariel Color and Style Ariel Matic Ariel Complete+ Ariel 24 Hour Fresh

19. Ariel Product Range Ariel Matic Ariel Complete+ Ariel 24 Hour Fresh Ariel Colour and Style Ariel Complete+ removes tough stains in just 1 Wash. Especially formulated for semi automatic washing machines, Ariel’s cutting edge technology to provide impeccable cleaning Ariel 24 Hour Fresh provides tough stain removal along with long lasting fragrance. Advanced perfume technology provide impeccable clothes along with refreshing fragrance that lasts upto 24 hours. It provides the Best stain removal in 1 Wash. Especially formulated for Fully Automatic Washing Machines. Best used for Front & Top Loading Fully Automatic Washing machines Ariel Colour & Style is specifically created for coloured clothes to remove tough stains and prevent colour fading. With Colour Lock Technology, it ensures coloured clothes stay shining like new.

20. “Daag Achhe Hai” “Maa Ke Haathon Jaisi Safai” “#ShareTheLoad” Ad Ad Ad

21. Surf Excel ArieL S – Segmentation Premium Segment, Detergent. Mom’s washing children’s dirty clothes by T – Targeting Blue: All mid scale and premium segment buyers, Matic: Washing machine users Bar: Medium and Low Income families Quickwash: Consumers in water-scarce and hard-water regions. “Daag Achhe Hai” P – Positioning Positioned as a quality product at comparatively lower prices, in premium segment. S – Segmentation Premium Segment, Detergent. Nuclear families with high income-levels. T – Targeting Upper middle class – rich class of the society wanting superior quality. Washing machine users are also targeted by its product Ariel Matic. Customers wanting fragrance and color preservation. #ShareTheLoad P – Positioning Positioned as superior stain remover, offering fragrance and preserving colors, for a premium price.

22. 2kg 1kg 500gm 100gm 60gm 25gm Rs405 Rs210 Rs115 Rs20 Rs10 Rs5 2kg 1kg 500gm 100gm 60gm 25gm Rs437 Rs240 Rs130 Rs40 Rs20 Rs10

23. Porter’s Generic Strategies Cost Leadership Differentiation Cost Focus Differentiation Focus Focus Broad Target Narrow Target Lower Cost Differentiation Competitive Advantage MarketScope

24. Nirma Launched in 1969 in India as Very Low-cost Detergent Powder. Nirma brand launched by a chemist named Karsanbhai Patel Wheel Launched in 1988 in India as fragrant low cost Detergent Powder. One of the brands under HUL.

25. Nirma Wheel • In 1969, Karsanbhai Patel, a chemist, founded Nirma in Gujarat and went on to sell it nationally by 1985. • Patel was offering detergent products for poor consumers, mostly in rural areas. • In fact, Nirma created a new business system that included a new product formulation, low- cost manufacturing process, wide distribution network, special packaging for daily purchasing, and value pricing. • Current market share of Nirma is 12% of the total detergent market in India. • HUL, in typical MNC fashion, initially dismissed Nirma’s strategy. However, as Nirma grew rapidly, HUL could see its local competitor was winning in a market it had disregarded. • HUL decentralized the production, marketing, and distribution of the product to leverage the abundant labour pool in rural India, quickly creating sales channels through the thousands of small outlets where people at the bottom of the pyramid shop. • In 1988, HUL launched Wheel to counter Nirma. • Current market share of Wheel is 16.9% of the total detergent in India. History

26. Nirma Product Range Super Nirma Detergent Nirma Detergent Nirma Detergent Cake Super Nirma Detergent Cake

27. Active Wheel Detergent Lemon & Jasmine Active Wheel Bar Lemon & Orange Active Wheel Bar Lemon & Jasmine Active Wheel Detergent Lemon & Orange Wheel Product Range

28. “Sabki Pasand Nirma” “Super Nirma Se Mile Super Safedi” “HaathN aa Jalein” “Nimbu Ki Shakti Aur Hazaro Phoolo Ki Khusboo” Ad Ad Ad Ad

29. Nirma Wheel S – Segmentation Low-End Segment, Rural Households (Basically all belonging to bottom of the pyramid) ‘Sabki Pasand Nirma’ T – Targeting Nirma is spread across a huge market having an excellent distribution channel. Low Income and rural families. P – Positioning Nirma positioned itself as an affordable product between the people who could not afford detergents and for people who were looking for something more reasonable and S – Segmentation Low-end Segment Detergent, people from lower-middle class and poor class. ‘Mehangi Wali Dhulai Budget Mein Samai’ T – Targeting Low income and rural people Customers wanting fragrance P – Positioning Positioned as a house-hold chore Powerful detergent with fragrance.

30. Nirma Wheel • Cost leadership strategy • Nirma chemicals was able to challenge the might of Hindustan lever by pursuing this strategy by producing products more cheaply than Surf. • At that time, it was sold at Rs 3.5 per kg while HUL’s surf was priced at Rs 15. • The mission of Nirma was to provide better quality products at best prices • Nirma is a very good example of fulfilling the unmet needs of the customers. Once you fulfill the unmet needs, you also get the first mover advantage. • Differentiation strategy. • Nirma was already there in the market for many years so the possibility of breaking the price barrier of Nirma ruled out and so also the place. • Now the only thing left was the promotion by getting a Brand Ambassador / Celebrity Endorser and that’s what HUL did. • HUL incorporated artificial fragrance into Wheel, with photographs of Lemon, Jasmine, Sandal etc. to make consumers believe that it contains real ones. • Research picked up the insight that Nirma was not kind on hands because of its high soda ash content. • "Maine maangi thi safaai, aur tu ne di haathon ki jalan" commercial, which took the battle straight to Nirma's turf.

32. TIDE Launched in 2000 in India as Detergent Powder. One of the brands under P&G. GHARI Launched in 1987 in India as Low Cost, Good Quality Detergent Powder. Brand under RSPL.

33. “Chaunk Gaye?” “Pehle Istemal Karein, Fir Vishwas Karein” Ad Ad

34. Tide GHARI S – Segmentation Medium Level Income Segment, Soaps & Detergent. T – Targeting Middle class women, washing clothes on their own. Middle class buyers who cannot afford premium products but aspire for equally good products P – Positioning Positioned as a very good quality detergent offering superior whiteness, good odor, affordable price. An all round detergent possessing all the desired qualities of a detergent. S – Segmentation Low-end Income Segment (Mass), Soaps & Detergent. T – Targeting Lower middle class households in Tier 3 and Tier 4 regions. Also targeted people in rural areas in different geographies. P – Positioning Positioned as a good quality product (compared to low-end products like Nirma and Wheel) but at a slightly higher price. A product that doesn’t impair ‘Kismat ki rekha’.

36. This is not the End, my friends. Let’s have a quick summary on Porter’s Generic Strategies.

37. Cost Leadership Differentiation Cost Focus Differentiation Focus Focus Broad Target Narrow Target Lower Cost Differentiation Competitive Advantage MarketScope Porter’s Generic Strategies (with respect to competition and price segment)

38. Cost Leadership Differentiation Cost Focus Differentiation Focus Focus Broad Target Narrow Target Lower Cost Differentiation Competitive Advantage MarketScope Porter’s Generic Strategies (in overall Detergent Industry)

39. Perceptual Map (Above discussed brands) High Price Low Price High Quality Low Quality

40. References • http://www.icmrindia.org/free%20resources/casestudies/The%20Nirma.htm • http://mba.mit.asia/waves-2014/Success-Story-of-Nirma.pdf • https://www.surfexcel.in/laundry-products/ • Market Research Report on DETERGENT INDUSTRY IN INDIA (By NPCS) [PDF] • Indian Consumer Laundry Study (By Dupont) [PDF] • Porter’s Five Forces Model and Porter’s Generic Strategies (multiple sites) • http://consumeraffairs.nic.in/WriteReadData/userfiles/file/DetergentPowders.pdf

41. The End Thank You 

Detergent Market in India as of 2015 (Surf Excel, Ariel, Nirma, Wheel, Tide, Ghari)

Arjun Parekh

Detergent Market in India as of 2015 (Surf Excel, Ariel, Nirma, Wheel, Tide, Ghari)