Pond's packs a premium punch in skin care

Pond's packs a premium punch in skin care

Author | Source: The Economic Times | Wednesday, Sep 06,2006 8:46 AM

Pond's packs a premium punch in skin care

Pond's, the eternal cosmetic brand that your mother used on her way to work and your sister on those cold wintry days, has acquired a premium - a costly touch to it.

Faced with stiff competition from private labels and global giants such as Revlon and L'Oreal, Hindustan Lever (HLL) is rolling out a range of upmarket skin-care products under the Pond's brand name.

This will be the first attempt for emerging markets in the Unilever fold and the third by HLL to enter the high-value skin-care segment after two previous failed attempts in 1998 and '03. Unlike its earlier distribution-led strategy, Pond's is focusing on personalising the customer inter-face at retail outlets through direct interaction with consumers.

“The last two attempts to enter the premium end was not too successful as we were slightly ahead of times. The premium segment was almost non-existent then. However, the market has exploded today with the boom in several sectors which has brought in younger consumers with more disposable incomes and the propensity to spend.

We are in fact targeting women in their mid-20s onwards for the brand,” said HLL vice-president (skin-care) Ashok Venkatramani. “We call Pond's the 'masstige' brand, which is a combination of mass and prestige. The focus will be to tap the segment in between the mass and the premium end of the segment,” he said. The approximate cost of investing in each outlet is estimated to be around Rs 75,000-2.5 lakh as per the size and display.

Pond's came into the Unilever fold in 1987 when it took over US-based Chesebrough-Pond's. The brand has two product ranges which fall in the area of advanced skin creams and talcum powders. The traditional skin-care range comprising moisturising cold cream was launched in India in 1947, including Pond's body lotions and the summer range which includes all-day oil control cream and daily face wash.

The talcum powders have three variants of Pond's Dreamflower, Magic and Sandal. HLL has launched the premium range in India in the price band of Rs 350- 850 in areas like skin hydration, whitening and age-defying products. The focus is women in their mid-20's who are aspirational in their purchases. The roll-out began in May '06 and three premium products from the international range are now available in the market.

Company watchers say HLL is a late entrant at a time when brands like Himalaya Products, Revlon, Maybelline and L'Oreal have already got a headstart into wooing domestic consumers with skin-care products. “We understand the fact that the category will start small, it being the initial phase.

But, we see the market emerging in a big way in the next five years and a lot of skin-care needs that is non-existent in India will soon be relevant to this market. The endeavour now is to firstly look at developing the category and being the dominant player in time.

The market is just opening up, and the premium skin-care market will record upbeat growth rates in the next 5-10 years. This category's growth depends on how much the lead players do to develop the segment,” said Mr Venkatramani.

With distribution being restricted to speciality beauty and wellness chains (which are very few in number) and through lifestyle stores, the premium products are being made available at 100 distributor outlets, which should go up to 200 by the year end, across the top 30 cities.

Industry watchers say the advance skin-care market is still evolving, and one of the immediate challenges for HLL will be to build a premium image around the brand.

In many ways, the Indian attempt is quite similar to what Unilever has been doing in other countries. Pond's is an upmarket brand in countries like the US, Japan, China, Thailand, Indonesia, Spain, Malaysia, Australia and Korea.

“This is a survival strategy, and brands now have to no choice, but to innovate and ensure a personal interaction with skin-care products. Also, with private labels looking at entering the regular month-to-month purchases space, as was the case with commodities, it's only a matter of time before they look at the premium skin-care segment as well,” says Piyul Mukherjee, director, Proact Research, a Mumbai-based market research agency.

HLL also has Vaseline, Fair & Lovely and Lakme range of skin-care products in the country.

The market in the last few years has also seen the rise of ayurveda and remedial positioned skin-care products such as Biotique, Ayur and Himalaya. International brands such as L'Oreal, Revlon and Maybelline are also fiercely competitive, pushing innovations and ramping up their distribution network.

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