P&G slashes shampoo prices to improve market share

Price cut is to the tune of 17-32%; Rival HUL likely to follow suit, say sources

In a bid to improve market share, the Indian subsidiary of the world's largest consumer goods company Procter & Gamble (P&G), India, has cut the price of its shampoo brands between 17% and 32%.

P&G India's brands such as Pantene Pro V are cheaper by 32% compared with the nearest rival Dove, while the price of Head & Shoulders is lower by 17% vis-a-vis Clear, according to sources. Dove and Clear are from the stable of Hindustan Unilever (HUL).

P&G's market share in shampoos is estimated to be 27%. HUL, in contrast, has a share of 46-47% in shampoos, say sector analysts.

While HUL has maintained its market share, analysts point out that P&G has been ceding ground in shampoos. Three years ago, P&G's shampoo share was around 30%.

HUL is expected to react to P&G's latest move, reminiscent of the detergent war a decade ago. At that time, P&G had cut the price of brands such as Ariel to gain ground in a market dominated by HUL's Rin, Surf and Wheel. As things stand now, P&G has 17-18% share in detergents, while HUL has a share of 34-35% in the category.

The move to cut shampoo prices comes soon after Al Rajwani, the new managing director, took over at P&G India.

Like most fast-moving consumer goods companies, P&G has not been spared the consumer slowdown, with its top line seeing sluggish growth in the past few quarters. The company, according to sources, is expected to keep its focus on existing businesses before contemplating new launches.