Market experts say that lowering price points while still retaining value was the best way for GCPL to move ahead
In what could trigger a potential reaction from rivals, Mumbai-based Godrej Consumer (GCPL) has launched single-use hair colour packs at Rs 30 - almost Rs 20-30 lower than the current price of similar products in the marketplace. The launch has happened under the Expert brand name in the creme segment, which is one of the four lines in GCPL's hair colour portfolio, the others being Renew, Nupur and Color Soft.
To promote the new product, GCPL has launched a new ad campaign and is also pushing the product aggressively at the retail level. While announcing the company's second quarter results recently, GCPL's managing director A Mahendran had said that the company would look at all possible levers of growth in its core categories. In the last few months, GCPL has given its creme portfolio under Expert a rejig to boost growth. The current launch takes that endeavour to the next level, company executives say.
Market experts say that lowering price points while still retaining value was the best way for GCPL to move ahead in hair colour given the stiff competition from local and foreign players.
GCPL derives nearly 15% of its domestic revenues from hair colour, the others being house insecticides and personal wash, which stand at 45% and 25% respectively. But GCPL, which has dominated the powder hair colour segment within the roughly Rs 1,800-crore hair colour market in India, has struggled categories such as creme dominated by multinationals such as L'Oreal.
According to industry estimates, powder hair colour constitutes about 45-50% of the market, while creme is about 25%. While powder is growing at about 15% per annum, creme is growing at about 20%, partly because of the ease with which one can use it. But creme is also higher priced than powder. Typically powder hair colour is available between Rs 10 and Rs 20 for a small pack.
Creme price points, which for a long time were above Rs 100 for a 100-ml bottle, began coming down last year, when L'Oreal, which has Garnier Color Naturals at the lower end of the market, launched a 40-ml product of the latter at Rs 59. Till that time, Garnier Color Naturals was available at Rs 150 for a 100 ml pack. Rivals such as Streax from Mumbai-based Hygiene Research Institute (HRIPL) and Color Mate came out with products priced between Rs 45 and Rs 50 for a 40-ml unit. Their 100-ml units were priced between Rs 105 and Rs 150.
The Rs 30 creme sachet, which is also a 40-ml pack, launched by GCPL, say market experts, is likely to be a game changer against this backdrop. Satyaki Ghosh, director, consumer products division, L'Oreal India said that his company was not a price warrior. "What we thrive on is the innovation we bring to the table. That comes at a price," he said.
Manish Chhabra, managing director, HRIPL said that it was not contemplating launching a creme sachet at the moment.
Analysts say that rivals are watching closely consumer response to GCPL's Rs 30 creme sachet. Me-too products if any are likely to be launched after a few months, they say.
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