The dominance of a clutch of low-priced challenger brands in the FMCG space could well be on the wane.
After making swift inroads and ruling the market throughout 2003 and early 2004, the price warriors across product categories appear to have relinquished their lead to national players.
This is particularly true if one takes into account only the discount (lower price end) segment in each case.
Take the case of the Rs 2,500-crore oral care market. Brands such as Anchor, Ajanta and Babool - which ruled the discount segment of toothpastes till about 8-10 months ago - have given way to national brands.
Analysts said earlier Anchor and Ajanta accounted for more than 80 per cent of the discount segment in toothpastes, but the Cibaca Top brand from Colgate-Palmolive has eaten into their share, and now accounts for about 50 per cent of this market.
Cibaca Top is now the cheapest toothpaste brand in the market at Rs 21 for a 200-gm tube (Rs 12 for 100 gms and Rs 7 for 50 gms), undercutting even Anchor and Ajanta, which retail at Rs 30 for a 200-gm tube.
Mr S. Raghunandan, Vice-President - Sales at Dabur India Ltd (DIL), told Business Line that Babool, the toothpaste brand owned by Balsara, which DIL acquired recently, also lost ground. "But we are now reworking the entire value proposition of Babool. This means new pricing, improved packaging and fresh communication."
He said DIL's target is to double the sales of Babool within the next two years. Only after Babool has been successfully relaunched will Dabur begin to work on the two other toothpaste brands it acquired from Balsara - Promise and Meswak.
The story appears to be similar for detergents. Mr A. Satishkumar, Managing Director at Henkel Spic, said that the sustained price cuts by national players have put regional ones on the backfoot. He said the share of Henkel's brands in the overall detergent market has been maintained at five per cent throughout 2004 and continues to remain there this year too. "We have not lost market share since we continue to largely maintain prices," he said.
Last year, HLL and Procter & Gamble gave price discounts on their detergent brands to offer a better value-for-money equation to the consumer.
When contacted, the HLL spokesperson declined to comment on the matter. But as per market estimates, Ghadi and Nirma either lost market share or managed to hold, with no gains during the period under review.
Over the last several months, market leaders across each product category have cut prices, spruced up distribution and offered better value-for-money, luring consumers towards their brands. Analysts said that as long as market leaders maintain a grip on the price-value equation, the FMCG consumer will continue to patronise these brands.