Soaps To Toothpaste Makers Focus On Little-Tapped 450 Million Consumers

Hindustan Unilever Ltd. unveiled its Baby Dove range of soaps two years ago. Dabur India Ltd. plans to launch a shampoo and hair oil under the Dabur Amla brand for online retail. And Colgate-Palmolive India Ltd. told analysts that focusing on the oral care market for children is key to regaining its lost market share.

Going by the 2011 census as a benchmark, about 36 percent of India’s 1.3-billion population comprises children below 14 years. But this cohort contributes just 5 percent to the overall personal-care market worth nearly $13 billion, according to Nielsen India data sourced from the FMCG industry. The share in metropolitan areas has risen to a quarter and the kids’ segment, according to industry executives, it growing annually at 18-20 percent.

The Indian consumer market is maturing and kids are more aware of products, Alpana Parida, managing director at brand consultant DY Works, told BloombergQuint. The new launches in the category reflect the companies’ desire to find new growth drivers, she said. Not just the market for children, she said even other sub-segments are also growing at “strong” rates.

To be sure, Johnson & Johnson, Himalaya Drug Company and MeeMee make such products but are either kids-only or niche manufacturers. Now, FMCG companies that cater to the general market are increasing focus on children’s category.

The FMCG makers launched similar personal-care products in the ’90s and in the first decade of the new millennium. This included Marico Ltd.’s hair oil, shampoo and cream gel products for kids under the brand name Parachute Starz in 2008, which was later withdrawn. Colgate too had launched products for kids in the ’90s, according to brand consultant Harish Bijoor, but later withdrew most of the stock-keeping units from the market.

The companies shelved the kids’ products then because they were considered “ahead of the curve”, Parida said.

Until now, only toothpaste makers were chasing growth in the market for children but it’s still a small, untapped segment. According to Nielsen India’s data sourced from the industry, it’s worth Rs 350 crore, growing annually at 15 percent. By comparison, India’s oral care industry is worth Rs 13,000 crore and expected to grow at 30-35 percent in the next 12-15 months.

JHS Svendgaard Laboratories Ltd., a contract manufacturer for consumer goods makers including Baba Ramdev-backed Patanjali Ayurved Ltd., is keen on capturing a slice the market with its ‘Aquawhite’ brand toothpaste.

“We have launched toothpastes for kids and have purchased the rights to Indian cartoons which are popular and have a 78 percent viewership,” Nikhil Nanda, managing director of JHS Svendgaard, told BloombergQuint over phone. The product’s selling point, Nanda said, is that it’s fluoride-free. Indian water already contains fluoride and excess of it is harmful for bone development, he said.

According to Rajat Nanda, marketing head (hair care) at Dabur India, there’s an unmet need today for a range of specialised products for kids. “Kids’ hair and scalp is more sensitive as compared to adults,” he told BloombergQuint over email. “And when it comes to kids, safety and extra nourishment are the two key parameters.”

Exponential growth of online retail has exposed young consumers and parents to a range of products. And that will help create demand.

Dabur, according to Nanda, is targeting millennial parents who shop exclusively on e-commerce or digital platforms. “We’re also customising products and creating product combos specific to e-commerce, based on the current consumer trends.”