Consumer products major P&G India plans to launch its $1 billion-plus flagship skin care brand in India this year, sources close to the company said. Since the past few months, the company has been in serious talks with its major distributor, Universal Corporation, which has been distributing and marketing Olay in India since the past three years. Universal also imports Pringles, Wella, Herbal Essences and Camay, among other P&G brands.
When contacted, the P&G spokesperson in India denied the development. However, during the launch of Pampers in December, senior officials indicated that P&G India is gearing up for a major launch in the premium products space.
While fragrances like Boss and Escada will continue to be marketed by third party importers, P&G is bullish on the skin care segment and will launch the Olay range across price points.
In December, P&G India officially launched its diaper brand, Pampers, after it discontinued its agreement with Universal Corporation. The company will follow the same route for Olay now.
P&G's marketing team is currently in talks with major organised retailers for display tie ups at Shoppers' Stop, Pantaloons and Westside among others to cater to the brand's target group, the premium shopper.
"Oil of Olay has been present through the import route and has a brand recall with consumers. On that basis, they should be able to grab a share of the market if they enter now," said the head of a leading retail chain in the country.
Saatchi & Saatchi, which handles most of P&G's brands globally, has bagged the advertising account in India, sources said. The agency also handles the advertising account for the recently launched Pampers. Competition for Olay will come mainly from HLL's Pond's, Dove and Lakme, L'Oreal and others.
P&G India is in advanced talks with leading retailers to promote the brand through point of sales counters through the kiosk route in a way similar to Pond's, Lakme, L'Oreal and others.
"Launching Olay is the most obvious step for P&G now that it has chalked out the road map for its portfolio and has the distribution systems in place for its Gillette portfolio. At recent analyst meet the company has indicated that the premium end is a growth driving segment for it," a leading FMCG analyst said.
Globally, the company sees a strong potential in emerging markets, where it is seeing a double-digit sales growth. At a recent analyst meet, AG Lafley, P&G's chairman, has been quoted in international media reports saying, "We remain pretty bullish on developing markets."
The beauty industry in India is $3.6 billion, as per Euromonitor estimates, of which the skin care market is Rs 1,500 crore growing at a CAGR of 4.3%. Multinational beauty brands are increasing their presence in India with the market poised for a major grow drive.
Olay has a range of products in the skin care and cosmetic segments. P&G also has the Cover Girl and Max Factor brands which are present in India. The Olay launch will give it a stronger toehold in the segment.