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Local firms go market savvy to take on MNCs: Paradigm Nutshell

19-December-2000
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Local firms go market savvy to take on MNCs: Paradigm Nutshell

The personal care segment has quietly undergone a sea change. The multinationals are coming to terms with the local market dynamics with the acceptance that price is crucial, while regional players are evolving from being price warriors to sophisticated marketers with excellent products.

The change in nature of competition has been primarily due to three factors.
  • Larger companies are moving from niche-focus to expanding in all directions. For instance, Marico is in shampoo, Nirma in toilet soaps and Dabur in toothbrushes.
  • The entry of multinationals like Henkel, L'Oreal and Revlon is posing challenges with excellent product propositions.
  • A growing number of pharma and OTC companies like Emami, Ayurvedic, Concepts, Torrel, Zandu have entered the market.

The view of Indian companies that MNCs are not a threat as they cater only to premium segments, is no longer valid. Regional companies like CavinKare and Medimix have evolved from being price warriors to sophisticated marketers with excellent products, helped by the country's improving logistics infrastructure and cheaper regional media reach.

These are some of the key findings for the personal care industry as a whole by Paradigm Nutshell. More and more variants have emerged filling every conceivable niche, leading to a major convergence of product categories.

Soaps and even shaving creams are encroaching onto the skin care territory, while hair dyes promise to nourish and hair oils offer anti dandruff properties. The rising level of competition has lead to the necessity of restructuring. Most multinationals have adopted restructuring strategies, as this has become essential for both business focus and cost reduction.

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