In wake of weak demand and tough competition, FMGC major HUL slashed prices of Dove, Lux, and Lifebuoy soaps, financial daily Livemint reported. The move is aimed at winning over consumers and passing on the benefits of cheaper input costs. Wipro Consumer Care, the maker of Santoor soap, also cut the price of the soap to stay in the game. Earlier this year, Santoor became the first soap brand from an Indian FMCG company to touch annual sales of Rs 2,000 crore.
"HUL does selective and judicious price changes across its portfolio in the normal course of its business. Given that the commodity prices are expected to remain benign for a certain time period, we have taken price reductions in the range of 4 per cent to 6 per cent in Lux and Lifebuoy portfolio, while it may be higher on certain packs in order to pass on the benefits to the consumers", a company spokesperson said on Tuesday.
According to research by Euromonitor, Lifebuoy and Lux are among the highest-selling soap brands in India’s toilet soap market, which is worth Rs 20,960 crore.
For HUL, volume growth has been an issue in the skincare product department. The price cut may spur consumption in this high-penetration category, especially at a time when the demand for packaged goods is subdued.
The demand in the beauty care segment has been on the lower side. “Within beauty and personal care, personal products’ performance was steady, while personal wash witnessed a muted delivery, particularly in the popular segment," said the company.
HUL's annual report shows that beauty and personal care segment (personal wash, skincare, hair care, oral care, etc) contributed 46 per cent to overall revenue. Seeing the growing popularity of naturals, HUL launched Lux Botanicals and Pears Naturale nationwide.
Edelweiss analyst Abneesh Roy told Livemint that HUL’s move is "the right strategy in our view, considering soaps volumes are soft and palm oil prices continue to remain lower on a year-on-year basis, although have picked up lately."