PERSONAL CARE

INDUSTRY
$0.943
Group 6
Shreya Muralidhar-52
Varuna Singh- 54
Rohan Gulati-56
Pravesh Dhavale-58
Siddhartha Jana-60
Personal Care Industry
WThe personal care sector in India was estimated to be worth
$5.6 billion in 2008, with a CAGR oI about 11.5 during
200308.
Hair Care, Ieminine care, skincare and make-up are the key
markets driving growth within the personal care sector.
W Most oI the markets in the personal care sector are highly
consolidated, with the top Iive players controlling about three-
quarters oI the total market share; Iragrances being the only
exception.
Ever-increasing
population
Increased
disposable income
Evolving
awareness oI
personal grooming
Modernization oI
organized retail in
India
actors of Sectoral Growth
Personal Care Segment
The all India market Ior the various categories is:
W Soaps - Rs 5,000 crore
W Detergents - Rs 5,000 crore
W Hair oil - Rs 2,000 crore
W PerIumes - Rs 110 crore
W Deodorants - Rs 160 crore
W Talcum Powder - Rs 570 crore
W Shampoo - Rs 700 crore
W Fairness creams - Rs 400 crore
Ma[or layers ln ersonal Care ln
lndla
Company Sa|es |n March
2010
ersona| Care
ColgaLe almollve lndla LLd 4088 ColgaLe almollve
uabur lndla LLd 7063 uabur Amla vaLlka lem
uabur Culabrl
Lmaml LLd 2162 8oroplus lalr and Pandsome
navraLna Cool 1alc
Claxo SmlLh kllne Consumer
PealLhcare lndla LLd
4219 Lno lodex
Codre[ Consumer roducLs LLd
(CCL)
4232 ClnLhol Color SofL lalr Clow
no 1Shlkakal nupur kesh
kala vlgll
Company Sa|es |n March
2010
ersona| Care
PlndusLan unllever LLd 37008 LakmeLlfebuoy Lux epsodenL
Sunsllk onds 8exona
vasellne lalr and Lovely
epsodenL uove ears
lndlan 1obacco Company LLd 7387 llama ul Wllls vlvel ul Wllls
vlvel
Marlco lndusLrles LLd 321 arachuLe Palr Care SLarz
nlhar ShanLl8adamAmla
rocLer Camble Pyglene
and PealLhcare LLd 1880
Whlsper anLene ro v Pead
Shoulders
Some Developments
Some acquisitions :
Marico acquired HUL`s Nihar Brand in 2005.
P&G acquired Gillette in 2005.
Godrej Consumers Products Ltd. acquired Keyline Brands
Ltd. U.K, 2005.
Some entrants:
ITC entered toiletries segments under the brand SUPERIA.
Ruchi Soya Industries Ltd. launched toilet soaps under brand
name Ruchi No. 1.
Tupperware India was planned to enter beauty care segment in
2007
LAk kLICkMS IMAC1 CN INDUS1k
2002 Lxclse duLy on cosmeLlcs and LolleLrles
reduced Lo 16 from 32 earller
Cn Lhe fllp slde Lhe exclse duLy on
LooLhbrush had been lncreased for Lhe
second consecuLlve year Lo 8
Led Lo slgnlflcanL prlce
decreases (around 310)
for lLems such as
shampoos skln creams
Lalc halr olls perfumed
halr olls gels eLc
roducL AbaLemenL Lxclse CusLoms (8aslc)
on M8 200102 200203 200102 200203
1ooLh asLe 33 16 16 33 30
1ooLh 8rush nA 4 8 33 30
1olleL Soap 33 16 16 33 30
SynLheLlc
ueLergenLs
33 16 16 33 30
CosmeLlcs
1olleLrles
40 32 16 33 30
2007 lree samples and dlsplays are
exempL form Lhe purvlew of l81
lMCC companles spend a loL of
money on adverLlslng and brand
bulldlng Lxcluslon of samples and
dlsplays from l81 wlll help Lhem ln
promoLlng Lhelr producLs
2008 Lxclse duLy on cerLaln varleLles of
wrlLlng prlnLlng and packaglng
paper ls Lo be reduced from 12
Lo 8
ackaglng maLerlals ls very
lmporLanL for personal producLs
2009 CovernmenL has also abollshed
frlnge beneflL Lax (l81) Lhereby
aldlng a 113 lmprovemenL ln
earnlngs per share for mosL of Lhe
lMCC players
1he lMCC secLor wlll beneflL wlLh Lhe
removal of Lhe frlnge beneflL Lax as lL
adds Lo Lhe cosLs unnecessarlly
2009 lncreased Lhe budgeL allocaLlon
Lowards naLlonal 8ural LmploymenL
CuaranLee Scheme by 144 aL 8s
39100 crore
SLrong rural focus would ald
companles llke PuL and uabur
whlch earn 30 of Lhelr
revenues from Lhese reglons
ColgaLe Marlco and l1C wlll also
beneflL as rural areas conLrlbuLe
30 Lo Lhelr revenues
2010 Ad[usLmenL ln lncome Lax slabs
Lhereby lncreaslng Lhe lnhand
lncome for 60 of Lhe Lax payers
Wlll help lncrease Lhe
dlsposable lncome ln Lhe hands
of urban consumers
2011 Lxclse duLy on baby cllnlcal dlapers
and adulL dlapers ls belng reduced
from 10 Lo 1
Post Liberali:ation and
Globali:ation
W lndlan exporLs' growLh raLe lncreased from 36 ln
199293 Lo 222 ln 199394
W lncreased acLlvlLy and lnvesLmenL by MnC'S
W CaLegorles wlLhln caLegorles creaLed for producLs
whlch were noL explored earller
W llerce compeLlLlon wlLhln Lhe lndusLry
W Lmergence of cusLomer cenLrlclLy
W lnnovaLlons ln packaglngprlclng producL and
dellvery
Impact on Personal Care Sector
CosmeLlc
lndusLry
Came into
limelight since
1991 with the
liberalization
along with the
crowning oI
many Indian
women at
international
beauty
pageants.
8rands enLerlng
lndla
- Modl Croup of
lndla and
8evlon of
uSA formed
an alllance ln
1994
Avon Irom
USA
OriIlame Irom
South AIrica.
CrowLh
Indian
cosmetic
Industry had
rapid growth
in the last
couple oI
years, growing
at a CAGR oI
around 7.5
between 2006
and 2008
lmpacL on 8aby Care SecLor
8L 1991
!ohnson
!ohnson spread lLs
rooLs Lo Lhe world's
largesL democracy
lndla durlng Lhe
endemlc posL
lndependence Lurmoll
of 1947
1994
PuL formed a 3030
[olnL venLure wlLh Lhe
uSbased klmberly
Clark CorporaLlon
whlch markeLs Puggles
ulapers
2003
ampers launched ln
lndla by C
2009
Mamy oko a !apanese
brand launched ln lndla
2010
lLallan baby care brand
Chlcco enLers Lhe
markeL
ne Demerit of Globali:ation
Problems faced by Godref Consumer Products Ltd.
W The joint venture (JV) oI GSL with Procter & Gamble (P&G)
in 1993, came to an end in 1996.
W Following diIIerences over P&G's treatment oI Godrej`s
brands, including its popular soap Cinthol.
W TODAY,
GCPL has an international presence through the acquisitions
oI Keyline Brands Limited (United Kingdom) in 2005 and the
joint venture with SCA Hygiene Products AB, Sweden in
2007
FROM 1HE 5 YEAR PLAAS
Industry Policy Issues
W ill have to grow around 10 to achieve the 10
th
Plan
target oI 8 per cent growth Ior GDP.
W The sector grew at only about 7 in the 8
th
& 9
th
Plan
periods taken together.
W 2 diIIerence Irom past:
i. Industry will have to face much stronger international
competition, as our domestic market is now more open
with quantitative restrictions (QRs) on imports having
been removed with effect from April 1, 2001.
ii. The relative role of the public sector as a distinct entity
will decline in the course of the Tenth Plan.
Excerpts
W Focus on creating an industrial policy environment in
which 16 private sector companies, including public sector
companies, can become eIIicient and competitive.
W The removal oI quantitative restrictions on imports is an
important step in opening the economy to Ioreign
competition.
W To extend industrial liberalisation, which has been
implemented extensively at the Central level, to the State
level also.
Excerpts
WIt needs to be mentioned that the principal responsibility
Ior achieving competitive eIIiciency rests with the private
enterprises themselves
WForeign Direct Investment upto 100 per cent is
permissible under the automatic route Ior the various
chemicals used in soap manuIacturing.
WAccelerate growth rate oI GDP Irom 8 to 10 and then
maintain at 10 in the 12th Plan in order to double per
capita income by 2016 - 17.
Excerpts
W To impart additional impetus to generate 10 growth in
industry, and even higher growth in manuIacturing.
WImprovement oI physical inIrastructure Ior achieving rapid
industrialization.
WContinuous supply oI good quality electrical power.
W The schemes Ior establishment oI industrial parks aimed at
obtaining additional investment in small-scale and medium
enterprises.
Excerpts
W To impart additional impetus to generate 10 growth
in industry, and even higher growth in manuIacturing.
WThe sectors with prospects Ior high growth in output,
creation oI new establishments and Ior creation oI new
employment opportunities included:
Food Products
Chemical Products
Sr
No
Sector 8
th
|an
(199296)
9
th
|an
(19972001)
10
th
|an
(200206)
11
th
|an
(200711)
1 AgrlculLure 472 244 230 40
2 lndusLry 729 429 917 1011
3 Servlces 728 787 930 911
4 1oLal 634 332 774 90
Sectorial Growth in Recent Plans
@
ITC has market capitalization oI nearly US $ 15
billion.
ITC has a turnover oI over US $ 4.75 billion.
ITC ranks among India's top 10 `Most Valuable
(Company) Brands', in a study conducted by Brand
Finance and published by the Economic Times.
W ITC has a diversiIied presence in Cigarettes,
Hotels, Paperboards & Specialty Papers,
Packaging, Agri- Business, Packaged Foods &
ConIectionery, InIormation Technology, Branded
Apparel, Greeting Cards, SaIety Matches and other
FMCG products.
W ITC was established on August 24, as the
Imperial Tobacco Company oI India Limited in
Kolkata. Initially, the company was involved in the
trading oI imported cigarettes.
W The name oI the company was changed to India Tobacco
Company Limited (I.T.C. Ltd.) in .
W In , I.T.C. Ltd., through ITC-elcome group, tied up
with the US-based Sheraton Corporation to enter the
hospitality industry.
W I.T.C. Ltd established ITC Bhadrachalam Paperboards Ltd.
(IBPL) in .
W In ITC made an entry into the Ioods business.
W In Oct , ITC has launched an exclusive line oI
prestige Iine Iragrances and personal care products
under the Essenza Di ills brand.
W In ,90, ITC launched Fiama Di ills soaps and
shampoos Iollowing the success oI Essenza Di ills.
W l1C was a laLe enLranL ln Lhe 8s 29000crore personal
care lndusLry growlng aL 12 per cenL every year
UTURE PERSAL
CARE IDUSTRY
Rural India accounts Ior close to one-third oI the total
consumption pie.
W The penetration oI companies into rural north India increased
Irom 9.5 per cent in 2000 to 46 per cent in 2008, due to
companies selling their products in small packets or sachets .
W More than 70 oI consumers reside in rural areas and almost
50 oI the national income is generated in Rural India.
W The consumer base Ior personal care products in rural areas
in India is expected to reach around 109 Million by 2015.
Rural market The way ahead
W In just two years, ITC's personal care business has notched up
market share oI about 5 per cent (volume) in soaps, and around
3.4 per cent in shampoos.
WThe government support to agriculture and rural economy will
create a proIitable downstream opportunity Ior the personal
care industry.
W As the government supports the rural employment schemes
like NREGA, it provides rural consumers an opportunity to
earn more and empower them to spend more.
WIncreasing general awareness and shiIt in consumer preIerence
will propel the growth oI Indian personal care industry.
W Increasing urbanization, rising participation oI women in
urban work Iorce and growing importance oI looks and
personal grooming, not only Ior personal, but proIessional
reasons, are some oI the key social drivers.
W Development oI nontraditional segments like men`s
cosmetics (with products like hair gels and Iacial creams).
W Industry trends like increasing competition with entry oI
large MNCs, increased brand building and customer
awareness initiatives by companies are accelerating growth.
line and Company Research
W It expects Indian personal care industry to register a 9.6
growth Irom 2010 to 2014.
W India Market Analysis and opportunities reports that
emollients are expected to lead overall growth
while specialty surIactants and conditioning polymers are
anticipated to lead the growth oI specialty ingredients in
the country.
W The highest volume growth is expected Ior emollients,
speciIically with a projected 11.3 increase by 2014.
Growth vi:-a-vi: China
W As compared to China, India has a higher disposable
income per household.
W India also has a growing population oI women in the age
25-44,the key consumers oI personal care products.
W However, China spends almost 10 times as much on skin
care, six times as much on cosmetics and more than two
times on hair care on a per capita basis.
Capability to grow
W Given the sustained GDP growth oI 8-9,Indian personal
care industry can grow at 15-16.
W Green products can be used extensively Ior manuIacture oI
beauty products.
W Advances in nanotechnology and biotechnology are also
adding on to the growth oI the industry.
W Rising level oI globalization.
aby Personal Care Industry
!#$!%$
In India, children below 12 years old will account Ior
around 23 oI the total population in the near Iuture. As a
result, India may well attract more players to enter the baby
care category.
Johnson & Johnson (India) Ltd, Dabur India Ltd and
Himalaya Drug Co, are anticipated to expand their
distribution in smaller towns and rural areas.
Consequently, competition in baby care will be more
intense in the Iorecast period.