Even while India Household and Healthcare Limited (IHHL), the Chennai-based sole franchisee of LG Care fast moving consumer goods (FMCG) in India rolls out LG's soaps, toothpaste, shampoos, diapers and hairstylers across four lakh retail outlets in the country, it is looking hard to find answers to the impasse that has gripped not just the Rs 47,800-crore FMCG market but even the hitherto robust Rs 12,088-crore personal care market in the country.

"What is killing the personal care market in this country is the sachet," says Vijay Singh, Managing Director, IHHL. Perhaps what he is saying is right, for, how else does one explain the findings of a recent ACNielsen Global Services study on 58 personal care product categories held across 56 countries? The study, What's Hot Around The Globe: Insights On Growth In Personal Care, places the growth in sales of these products in India right at the bottom of the global heap-at a negative 0.2 per cent-even while the whole of Asia Pacific registered a growth of 1 per cent, and Europe, a developed market, 4 per cent on a huge $ 40 billion-plus base.

Emerging markets such as Russia, the Czech Republic and Poland saw a strong double-digit 13 per cent growth, with Latin America touching 10 per cent. "Nowhere in the world is the sachet, which is merely a sampler, sold at a price. Our research showed that in the long run, marketers lose almost half a bottle of shampoo consumption per month per household because of the sachet," adds IHHL's Singh.

Little wonder then that while shampoo sales grew 4 per cent globally, it declined 3.1 per cent in India last year. The biggest of all players in the Indian shampoo market, the Rs 10,138-crore Hindustan Lever Ltd., sold nearly 450 crore units of shampoo sachets in 2003. Is there a huge opportunity cost to that? Sachets, in a sense, have eroded the product availability at consumer homes, because the single use-and-throw packs have pushed the traditional bottle out. Globally, the trend is just the reverse-bigger consumer packs drive volumes and value growth. For instance, Procter & Gamble's recently-launched five ounce jars of facial cream retail for over $100 in the United States.

India also went against the global, and even the Asia Pacific market trends in many more personal product categories. Take male grooming products, for instance. The global trend shows the grooming-aware metro-sexual man pushing growth in not just male-oriented categories like deodorants, shaving systems and shaving creams, but even in unisex products like shower gels and hairstylers. Cut to India, and what you have is blood all over these categories-barring the basic products, razors and blades-with growth even in these managing to just about touch 2 per cent in 2003, even while the market grew at around 5 per cent globally.

"A large part of the cologne and perfume market is gray in India, and therefore does not reflect in retail sales data," explains Anmol Sherpa, Senior Manager and Client Service and International Service Coordinator for ACNielsen Global Services. While that may well be true, how does one explain negative growth in well-represented retail audit categories such as toothpastes and toilet soaps?

In a country of over a billion people with a population growth rate of 1.9 per cent annually, one could expect basic hygiene considerations to take soaps and toothpaste sales up, much like the 3 per cent-plus growth globally.

Yet, the Rs 2,000-crore toothpaste market fell over 8 per cent in 2003, and this, when nearly two-thirds of the 56 countries surveyed showed positive growth in toothpaste sales. In fact, tooth-stain removers and whiteners was the fastest-growing category across the globe at a scorching 48 per cent, adding $127 million (Rs 584 crore) to its already high $15-billion (Rs 69,000 crore) dental care market. Even toilet soaps grew by over 10 per cent in most Asian countries last year due to the threat of Severe Acute Respiratory Syndrome (SARS), while the Rs 4,800-crore Indian toilet soaps market declined by around 6 per cent in 2003.

Female vanity too suffered a setback in India, much like everywhere else this time, with declining sales being the trend across most categories including nail polishes, perfumes and colognes. India managed to duck the declining lipstick sales though, while the sale of face cleansers slid here as against a 7 per cent growth worldwide.

While shampoo sales grew by around 4 per cent globally, it declined by 3.1 per cent in India last year

Fortunately, this declining sales trend in personal products in India is not secular with smart marketers using product innovation to drive growth. "We identified shower gels and liquid hand washes as emerging categories where consumers seek to upgrade to products that do more than just cleanse and moisturise," says Vinay Hegde, Vice President (Marketing), Colgate-Palmolive India. Over the past year, since its launch in India, Palmolive Aroma shower gels have experienced a strong double-digit growth of over 25 per cent.

Though it is still too early to pass the verdict, the experience of Colgate-Palmolive in India does point to a clear switch from bar toilet soaps to shower gels, albeit only with very high-income consumers at the moment.

Another case in point is Hindustan Lever. Even while it barley managed to grow its overall sales in 2003, its 12-brand personal product portfolio grew by over 15 per cent-from Rs 2,095-crore in 2002 to Rs 2,410-crore in 2003. Expanding its skin-care brand Fair & Lovely to include newer usages such as anti-marks and deep-skin variants helped HLL double the brand's sales in just three years. Little wonder then, that the anti-spot and acne cleansers category grew at a strong 18 per cent in India, almost thrice the global rate in 2003 and is inviting a lot of activity. "We're extending our fairness cream, Fairever, to the ayurvedic platform," says C.K. Ranganathan, Chairman of the Rs 300-crore personal products company, KavinCare.

Though India was consistent with the global theme of innovation, the level of market stimulation remained uniquely Indian

Another bright spot for India is the hair care category, barring shampoos. The hair conditioners category with brands such as L'Oreal's Ultra Doux, Modi Revlon's Flex and Hindustan Lever's Sunsilk, is growing a phenomenal 50 per cent, though the category comprises a mere 1 per cent of the entire hair care market. Hair colourants, with a fourth of the hair care pie, is also growing at a healthy 6 per cent. "Hair colourants are driving the growth of conditioners," adds ACNielsen's Sherpa.

Though India was consistent with the global themes of innovation, convenience and concern for health and safety, the level of market stimulation or inhibition remained uniquely Indian. So while in Indonesia, a market similar to India in more than one way, the disposable baby diapers segment grew by a phenomenal 24 per cent, it just inched up 1.2 per cent in India, not reflecting, in any way, our young demographics.

On the other hand, the female hygiene category, in particular, the market for sanitary napkins, exploded with the introduction of low-priced products, registering 11 per cent growth across the country and an eye-popping 24 per cent in the rural markets.

COLUMN/JANE PERRIN Males Make Their Mark

An increased interest in appearance, hygiene and grooming on the part of today's males has contributed to the growth in personal care categories around the world. A look at the ACNielsen Global Services study, What's Hot Around the Globe: Insights on Growth in Personal Care, which analysed retail purchases in 56 countries across 58 categories, found many examples of this trend. Women aren't the only ones focused on personal grooming. In many of the countries we studied, the growth in personal care categories was impacted by the introduction of new male-oriented products. In the UK, for instance, the shower gel category grew by a mere 4 per cent last year, while the male segment grew by 18 per cent. Two other categories, deodorants and razors and blades, are also benefiting from the men's newfound attention to appearance. Moving in tandem, the deodourants category grew by 5 per cent overall, with 35 of the 50 countries studied by ACNielsen reporting an increase and the sales of male-oriented products grew twice as fast as that of female-oriented products. Our study also found the trend towards older populations affecting purchases in the personal care arena. With the baby boomer segment getting older and continuing to influence the consumer marketplace, the sale of anti-aging products is growing. Face & eye moisturisers grew by 10 per cent with the introduction of creams that do everything from reducing wrinkles and minimising dark circles to lightening age-spots. Consumers' desire for convenience, a key global trend found in other ACNielsen studies, was also seen across a number of categories within personal care. For example, new baby care products that emphasised on convenience, performed well. Disposable diaper pants are being used as an easier way to change a baby on the go and not just as a training tool. Developing economies in Latin America, parts of Asia, Eastern Europe, the Middle East and Africa experienced the fastest growth, with a number of categories expanding by double digits, while the more developed economies reported slower growth. While looking at global trends, it is important to consider the fact that what is new in one country may well have been available for years in another. Disposable diapers, for example, grew by 24 per cent in Indonesia as the dimensions of the category expanded with the introduction of lower-priced products. Another factor driving growth in the less-developed markets was the increased presence of international grocery chains and the greater availability of international brands and private label brands. As new varieties and brands are constantly added to the Personal Care arena, the growth across these categories has accelerated. In the more developed markets, growth was not as strong. In North America, for instance, six of the nine product areas reviewed showed declines. The three that grew were dental care, hair care and face cleansing and moisturisers. Increased sales of premium products-once sold only in speciality stores, salons and department stores and now available in traditional drug and grocery outlets-drove growth in the hair and face care categories. For certain categories, such as toilet tissue and disposable diapers, value growth was negatively affected by the wider availability of more economical products in warehouse clubs, hard discounters and dollar stores as well as the increased share of less expensive private label brands. -Jane Perrin is the Managing Director of ACNielsen Global Services

COLUMN/ANMOL SHERPA India's Crowning Glory

The Indian hair care market with a 3.8 per cent growth over the previous year has much reason to thank the Indian obsession with healthy-looking hair as a marker of beauty. While hair conditioners and colourants were earlier restricted to the affluent, they have become a way of life today. In addition, emerging product areas like colourants are looked at as substitutes for hair dye to counter graying hair. Contrast this with the more mature markets of the Asia Pacific like Australia, and it is evident that the structure of the hair care market in India is still in the development phase and has vast potential to grow. For instance, in Australia, hair conditioner accounts for a huge market within the hair care product area, but it is only a fraction of the Indian hair care market, though it is growing at a scorching pace over the last two years, at 46 per cent in 2003 and a whopping 63 per cent in 2004. Hair colourants too indicate strong growth trends with a year-on-year growth of 8 per cent. This is notable given that India, unlike any market abroad, has a large proportion of consumers whose hair care expenditure also includes hair oils. Still in its nascent stage in India, the diaper category reflects the coming together of multiple factors that have pushed its growth upwards. India's current phase of demographic transition, a burgeoning population, price erosion across FMCG categories, and rising urban affluence has combined to ensure an acceleration of growth for this category. While developed markets talk of growth in changing mats, swimming and trainer pants within this category, these segments are still not available to Indian mothers. Feminine hygiene has grown substantially by expanding its user base, increasing affordability and gaining greater width of distribution. Over the last year, the sanitary napkins category registered a volume growth of 11 per cent. This has been fuelled primarily by the category's increasing contribution and faster growth within rural India. In rural India for instance, the average price per unit has dropped from Rs 3.45 in 2002 to Rs 2.94 in 2004. Multiply this by ten to get a price for a standard pack of ten units and the difference is significant-a drop of Rs 5 per pack in just three years. Evidently, the Indian consumer is as convenience-seeking as her global counterpart. The difference however lies in the fact that she is willing to pay for convenience, provided products are priced in a manner that allows her to set aside a part of the income available to her, which is often based on what she thinks is a luxury or a necessity. -Anmol Sherpa is Senior Manager, Client Service and International Service Coordinator for ACNielsen Global Services.