Nirma’s loss appears to be Ghari’s gain. The Kanpur-based detergent player, Ghari, has managed to steal a march over arch-rival Nirma in the Rs 12,000-crore detergent market.
According to data provided by analysts, Ghari’s overall detergent share (in terms of value) stands at 12 per cent, compared to Nirma’s eight per cent. Three years ago, Ghari had a share of 10 per cent, while Nirma had about 13 per cent. Overall here means both bars and powders put together.
The leg-up, which Ghari has in the detergent market, has actually put it in the number two spot after Hindustan Unilever (HUL), say analysts. HUL has an overall detergent share of 36-37 per cent (value share, that is), while Procter & Gamble (P&G) has a 10 per cent value share, according to analysts.
Nirma, Ghari, HUL and P&G declined to comment, saying company policy prevented them from sharing market-related data.
Ghari’s impeccable hold over its distribution system in the north, according to analysts, has helped the player gain share at the cost of Nirma, which failed to react when HUL and P&G began cutting price a few years ago.
Says Anand Shah, senior fast moving consumer goods (FMCG) analyst at brokerage firm Angel Securities, “Ghari managed to insulate itself from what was going on in the marketplace. Nirma wasn’t so lucky. Besides, Nirma’s lack of focus on the detergents business has also not helped.”
Both, Ghari and Nirma, incidentally, operate at the lower end of the detergent market, known as the economy segment. Typically, brands in this segment are priced at Rs 30 a kg, compared to the mid-market segment, where a kg of detergent powder is priced at Rs 50.
The rivalry between HUL and P&G in the mid-market segment has actually lowered the price differential between mid-market and economy segment brands, say analysts.
For instance, Rin is selling a kg of detergent for Rs 50, compared to Rs 70 earlier. HUL cut its price by 29 per cent this January-February. The price of a 500-gram pack of Rin was also slashed to Rs 25 from Rs 35. It continues to retail at Rs 25 for half a kg.
P&G, meanwhile, has a 10-per-cent-free grammage offer going on its crucial stock keeping units (SKUs) of 500 grams, 1 kg, and 2 kg, respectively for Tide, its mid-market brand. This translates into the following price points for the latter: 550 grams: Rs 35, 1.1 kg: Rs 70 and 2.2 kg: Rs 140, respectively.
What has helped Ghari is the downtrading on in the detergent market, say analysts. “Consumers have been opting for lower-priced variants in the wake of the downturn and food inflation,” says Mitra of Indiainfoline.
But some others attribute a different reason to Ghari’s success. “Ghari is simply strong in the north. People love the brand there, especially in the BIMARU belt of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh,” says an executive with an FMCG firm.
According to some estimates, the north is the largest when the detergent market is split geographically. Its share stands at 35 per cent, compared to the west’s 30 per cent, south’s 25 per cent and east’s 10 per cent, say analysts. “Anybody who has a grip on the northern market then can’t be taken for granted,” says the executive who did not wish to be quoted.