The Rs 1,425-crore shampoos market bubbled over in 2005, riding on the back of a surge in rural demand. According to industry sources, the overall shampoo market, which sees annual volume sales of approximately 63,000 tonnes, saw rural offtake grow by 40 per cent last year, while urban demand grew half that, at 21 per cent.
The year before, 2004, saw a more sober growth in volumes — the rural market grew 18 per cent and urban 16 per cent. The year 2005 also saw some rejigging of volumes in the offering of the market leader, HLL's Clinic, and resulted in a gain in volume share for the brand.
Clinic sachets, which were sold at Re 1 for 4.5 ml, now offer 8 ml at the same price. This, according to industry sources, helped Clinic gain a market share in the shampoo category. The volume share grew from 28 per cent to 32 per cent, while its value share moved only marginally — from 24 per cent to 24.5 per cent.
The number two shampoo brand in volume terms, Chik, from the Chennai-based CavinKare Pvt Ltd, saw a small increase in share from 18.5 per cent to 19 per cent. CavinKare expects Chik to be a Rs 200-crore brand by next year. The other big brand from the HLL stable, Sunsilk, dropped marginally in volume but saw value share go up from 11.9 per cent to 13.5 per cent. Among the bigger gainers in the market was P&G's Head & Shoulders, which saw its value share rise from 9.3 per cent to 11.5 per cent, according to industry estimates. Its Pantene and Rejoice brands have a value share of 7.9 per cent and 2.7 per cent respectively.
Industry players say that the fierce price cuts and volume rejigs have been good for the shampoo industry, a product which has an all-India penetration of only 46 per cent. "Small packs have been driving penetration and growth. There has also been a drive towards pricing shampoos in a way to drive penetration," says the CEO of an FMCG company.
Meanwhile, industry watchers see a new price point of Rs 1.50 emerging in the shampoo sachet category. Clinic Plus has launched a new pack in the market, which offers 7 ml of shampoo and 3 ml of oil for Rs 1.50. P&G's Pantene too has been launched at this price point.