Godrej Consumer Banks On Lipstick, Er..., ‘Hair Colour Effect’
If women see no point in wearing lipstick underneath a facemask, they will colour hair instead. Godrej Consumer Products Ltd., maker of namesake hair dyes and colours, is banking on this version of the ‘lipstick effect’.
“Unlike global markets, India has always been a grey coverage market…,” Nisaba Godrej, chairperson and managing director of Godrej Consumer, told BloombergQuint in an interview. “We feel it [hair colours] will do very well especially now because people are now wearing masks, we almost feel that some of the lipstick market will shift to hair to express yourself. It is very early days; expressing yourself during this time will also be a tailwind.”
Consumers are known to spend on affordable indulgences during a recession to feel good. This ‘lipstick effect’ is called so because researchers found that cosmetics was one of the few industries that defied the Great Depression of the 1930s. In 2001, Leonard Lauder, chairman emeritus at Estée Lauder, was quoted as saying that the company sold more lipsticks after the dot.com bubble and the 9/11 attack caused a recession.
The pandemic has also driven demand for eyeliners, mascaras, foundations and nail enamels. “Consumers connect with the power of beauty products in an emotional way — in the way it lifts your mood, one’s sense of confidence, self-expression and creativity,” Rohan Vaziralli, general manager at Estée Lauder, India, had told BloombergQuint earlier.
Value For Money
Godrej Consumer saw demand grow in the value-for-money segment and the company is focusing on health, household insecticides and lower-priced products.
The value-for-money segment grew 22% during the quarter ended September. The maker of Cinthol soap recently launched a hair colour at Rs 40 targeting the value-conscious consumer.
Even the share of the Rs 10 soap has risen from 33% pre-Covid to 36% now, Godrej said.
Godrej Consumer Q2 Results 2020-21: Key Highlights (year-on-year)
- Revenue up 11% year-on-year at Rs 2,915.1 crore.
- Net profit up 11% year-on-year at Rs 458 crore.
- Ebitda up 18% year-on-year at Rs 672.9 crore.
- Margin stood at 23.1% versus 21.7%.
Godrej Consumer’s India branded business volume grew 5%. That compares volume growth of 11% for Marico Ltd., 1% for Hindustan Unilever Ltd. and rose 16.8%, for Dabur India Ltd.
Watch the full interview here: