AEGAEUM JOURNAL ISSN NO: 0776-3808

A Study on Performance of Major Domestic Companies in Personal Care Sector

Dr. Vanishree Sah CVR College of Engineering, Ibrahimpatnam - 501510 [email protected]

Abstract: Personal care industry is one of the fastest growing consumer products sectors in India. Personal care industry is witnessing a rise in the number of sustainable new personal care products. The Indian personal care segment offers promising opportunities for domestic brands. The manufacturers must keep in pace with the changing market demand through continuous innovation. This paper analyzes the performance of Indian companies in Personal care sector, the problems being faced these companies and the strategies being adopted by them to overcome these problems. Keywords: Personal care sector, challenges, strategies

1. Introduction Personal care industry in India comprises of hair care, bath products, skin care and cosmetics, and oral care. There have been many factors which have led to boom in personal care market. Some of these factors are: youth who are trying to explore new ways of expressing themselves, increase in the number of working women, increase in adoption of western lifestyle, increase in attention towards wellness and beauty, increase in disposable income, increase in organized retail sector, celebrity endorsements and emergence of online shopping. There is a rising aspiration among Indian men to look better groomed, which has led to the Indian men grooming market’s rapid growth. The rural population too is joining the mainstream and the firms are trying to reach out to the people in villages and small towns. The desire to experiment with different beauty and personal care products is growing in India, especially amongst young consumers. Whilst there is a growing need for variety, consumers remain environment and price conscious. Domestic players are trying to catch up with the emergence of trends towards natural, herbal, Ayurvedic products and premium products. The companies majorly compete on the basis of product since the players have similar portfolios. Manufacturers have been laying high emphasis on expanding their footprints in an attempt to increase product share and drive revenues. Prominent domestic players include Godrej Consumer Products, Dabur India, Marico, Wipro Consumer Care & Lighting, Emami and Patanjali Ayurveda. These domestic players are gradually trying to establish their footholds in overseas market especially in herbal personal care products segment.

2. Literature Review

Bansal Manmohan, and Gandhi Dheeraj, (2020) examined that rural consumer demographic profiles like gender, education level, and family income have a significant role in influencing their buying behaviour. Rural consumers are becoming more experience oriented. They collect information about the product and do not like to buy products without hands-on experience and focus on quality over price of personal care products. Sudhakar A, and T. Suchitra Rani, (2013) tried to understand the demographic determinants that might influence the buying behavior of personal care products. It was found that age group of 26-50 years, who are mostly graduates or post-

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graduates, working as employees and earning an income of Rs. 20,000-39,999 are the consumers of either popular or middle end categories of personal care products. Gauri Joshi and Gurudas Nulkar (2016), analyzed that there is high amount of environmental awareness among the consumers. However due to lack of proper and reliable information exchange between the manufacturers and the consumers this awareness does not materialize in green purchase behaviour. Consumer's willingness to pay extra for eco-labelled product is dependent on the product reliability and appeal. Rambabu Gopisetti, and G.Linganna, (2017), focused on gaining insight into the influence of various factors on the buying behaviour of consumers towards personal care products. It is found that consumers perceived that Television commercials and followed by Quality and Brand loyalty are significant factors which more influences on the consumer buying behaviour even though they are middle income groups and lower income groups. With increased education and below the 40 years age respondents are more using the personal care products. Ismailamiya and Dr.P.Ashok Kumar (2019),studied that India would draw world attention as an abode of eco-friendly herbal cosmetics that are in harmony with the nature in the market. Although India has the knowledge, skill and resources, yet it has neglected the opportunities in the global markets for a long time but now improving herbal cosmetic products. Balaji P. and E. Baskaran, (2018), explored that, Innovative Factor, Preferential Purchase Factor, Personal Advertisement Factor and Portraying Factor are the determinants of PCP advertisement effectiveness. The advertisers can induce the PCP customers purchase decision by nurturing their advertisement with innovation and novelty along with modernity for the effective utilization of audio/ visual communication, creativity and culture.

3. Objectives of the Study

1. To analyze the performance of Domestic Players in Personal Care sector 2. To understand the strategies being implemented by these domestic players in Personal Care sector.

4. Performance of Domestic Players in Personal care sector

India is one of the fastest growing consumer markets globally, with the transition from an unorganized market to an organized retail marketplace. It is being witnessed across major Indian cities as well as Tier I and Tier II cities. Personal care industry is one the fastest growing consumer products sector with huge growth opportunities for Domestic companies. The performance of Domestic Companies in Personal Care Sector during the period 2015-2019 is as follows:

Table 1: Total Revenue (in Rs. Crores)

Company Year

2019 2018 2017 2016 2015

Dabur 6547.93 5875.52 5565.29 5946.64 5569.13

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Godrej 5745.84 5286.70 4810.30 4902.62 4490.86

consumer

Marico 6372.00 5504.77 5158.87 5101.17 4916.87

Emami 2534.13 2394.11 2360.69 2444.37 2120.77

Source: Annual Reports of Dabur, Godrej, Marico and Emami

Table 1 above shows that the total revenue for Dabur, Godrej consumer, Marico and Emami has increased by 17.58%, 27.94%, 29.59%, and 19.49% respectively, during the past five years, i.e. from the year 2015 to 2019.

Table 2: Total Expenses (in Rs. Crores)

Company Year

2019 2018 2017 2016 2015

Dabur 5044.58 4487.85 4270.94 4733.90 4568.64

Godrej 4139.00 3884.47 3615.58 3877.49 3585.08

consumer

Marico 5093.00 4477.07 3941.64 4068.04 4114.11

Emami 1796.75 1665.02 1575.89 1756.63 1507.41

Source: Annual Reports of Dabur, Godrej, Marico and Emami

Table 2 above shows that the total expenses for Dabur, Godrej consumer, Marico and Emami has increased by 10.42%, 16.76%, 23.79% and 19.19% respectively, during the past five years, i.e. from the year 2015 to 2019.

Table 3: Net Profit (in Rs. Crores)

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Company Year

2019 2018 2017 2016 2015

Dabur 1264.29 1072.05 998.33 939.57 762.58

Godrej 1754.98 999.87 847.72 739.72 654.45

consumer

Marico 1132.00 718.23 842070 701.86 545.17

Emami 305.24 309.52 346.37 327.67 471.63

Source: Annual Reports of Dabur, Godrej, Marico and Emami

Table 3 above shows that the Net Profit for Dabur, Godrej consumer and Marico has increased by 65.79%, 168.16%, and 107.64% respectively, during the past five years, i.e. from the year 2015 to 2019. But the Net Profit of Emami has decreased by 35.28% in the last five years.

Table 4: Earnings Per Share (in Rs.)

Company Year

2019 2018 2017 2016 2015

Dabur 7.16 6.09 5.6 7 5.34 4.00

Godrej 17.17 14.68 24.89 21.72 19.22

consumer

Marico 8.78 5.58 6.55 5.44 8.45

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Emami 6.72 13.64 15.26 14.44 20.78

Source: Annual Reports of Dabur, Godrej, Marico and Emami

Table 4 above shows that the Earnings per share for Dabur, and Marico has increased by 79%, and 3.9% respectively, during the past five years, i.e. from the year 2015 to 2019. But the earnings per share of Godrej consumer and Emami has decreased by 10.67% and 67.66% in the last five years.

5. Strategies being implemented by top Domestic Players in Personal Care Segment

Design thinking : Design thinking tools of empathy, rapid prototyping, and visualization are being used to re-imaging brands and create new ones. To support this, the companies are also accelerating innovation pipeline, ramping up capabilities, investing significantly in research & development, and cross- pollinating learning and products across geographies.

Integration of digital capabilities for stronger Social & Relationship Capital: The companies are increasingly integrating digital capabilities with different aspects of business such as process of manufacturing, go-to-market and engaging with consumers. Through these efforts, the brands are building stronger Social & Relationship Capital by way of partnerships and more meaningful consumer connects.

Go-to-market approach: By leveraging technology and analytics, innovating for local contexts and building more agility in supply chain, the brands are able to serve consumers with greater precision and purpose. The companies are continuing to invest in enhancing Intellectual Capital, making Manufactured Capital more agile, and creating joint value with partners to maximize Social and Relationship Capital. Stronger e-commerce: For establishing a strong e-commerce presence in India, companies are have set up an e-commerce business with separate P&L accountability. The aim is to build agility and deliver the consumer focus required to win in this fast-evolving space. The companies are targeting growth to come from e-commerce-focused product innovation and digital native brands, in addition to current portfolio.

Use of Predictive analysis: The companies are using predictive analytics for better decision-making across different initiatives. Through data analytics, they are able to target smaller cluster-localized planning. The upgraded hand-held terminals and predictive suggestions guide salespeople in markets. They are trying to further optimise the time spent and delivery routes through GPS-enabled maps. As part of experiments, the companies are piloting artificial intelligence and behavioural science-enabled capability building for frontline salespeople. Nature-based products and Ayurveda: These products have become a key focus of the Indian FMCG market. Natural and herbal segment in the FMCG sector is growing at 25 per cent and these brands definitely benefit. It is necessary for these brands to press the pedal on innovations so that we are ahead in the Ayurveda and herbal space.

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Deeper penetration into rural India: The companies are enhancing engagement through customized partner engagement programmes to build stronger connect and drive common goals across the chain. They are building direct connection with their local area sales leadership teams. Companies are launching customized personal care products for rural India in smaller sachets and at affordable prices.

6. Conclusion

With development of cutting-edge technology, the boundaries between Biotechnology and personal care have narrowed down. Advancements in technology is significantly changing the way consumers choose, purchase, and interact with beauty and personal care products. At the same time, mistrust of ‘clean’ and ‘green’ labels will see consumers scrutinize ingredient lists and question product efficacy. Biometrics will offer an innovative way for companies to interact more personally with consumers by providing valuable customizations. Beauty and personal care market is moving towards a very positive change. The domestic players are rebooting their business strategies and investing in new products to reap in the benefit of the herbal age. But success will only be achieved by the brands that offer full transparency and avoid misunderstanding.

Acknowledgment

This paper and the research behind it would not have been possible without the

exceptional support of my supervisor, Prof.M.S.Bhatt. His enthusiasm, knowledge

and exacting attention to detail have been an inspiration and kept my work on track.

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