HLL fires at P&G, offers shampoo freebie

It’s revenge time for Hindustan Lever Ltd (HLL). The company has declared war in the shampoo market, by adopting the BOGOF (buy one, ge...

It’s revenge time for Hindustan Lever Ltd (HLL). The company has declared war in the shampoo market, by adopting the BOGOF (buy one, get one free) strategy to counter rival Procter & Gamble’s (P&G) move.

The BOGOF scheme has been launched on HLL’s two leading shampoo brands— Sunsilk and Clinic Plus. P&G had taken HLL offguard by slashing detergent prices by 25-50 per cent two weeks back. The battle between the two rivals has now shifted from detergents to shampoos. P&G, between its two shampoo brands Pantene and Head & Shoulders, has a 14 per cent share in the shampoo market, which is a key business for the company in India. It’s not clear at this stage whether P&G will follow suit, but when contacted, a P&G spokesperson said: “At P&G, we are focused on offering quality products to the consumer versus focusing on competition.” P&G, recently, had launched Rejoice shampoo targeted at the middle-end of the market, and in direct competition to HLL’s Clinic Plus shampoo. Industry analysts feel that HLL’s BOGOF offer may be aimed at destabilising Rejoice.

HLL is the market leader with an over 50 per cent share of the shampoo market. Sunsilk is priced at Rs 55 (125 ml), Rs 100 (250 ml) and Rs 150 (400 ml), while Clinic Plus is priced at Rs 37.50 (100 ml), Rs 70 (200 ml) and Rs 117 (300 ml). While Head & Shoulders is priced at Rs 64 for a 100 ml bottle, Pantene is priced at Rs 61, and Rejoice at Rs 39.

Story continues below this ad

The BOGOF initiative is also attempting to increase the volume of bottles in the shampoo market where 50 per cent consumption comes from sachets. According to an HLL press release, per capita consumption of shampoos in India is very low compared to other similarly developed countries. As a market leader, HLL believes that it can lead market growth by driving consumption and frequency of usage.

“Bottle packs play a significant role in this. Major innovation and value improvement initiatives on these bottle packs can deliver outstanding value to consumers and thereby drive consumption and growth,” the release added.

The move is expected to double volume growth during the period in which the scheme is launched. The strategic role of Clinic Plus in HLL’s shampoo brand portfolio has been one of market growth by attracting new users and greater consumption. “While delivering Outstanding Consumer Value through such initiatives, the company is confident that with scale economies, appropriate sourcing and leveraging its established skills in supply chain efficiencies, it will be able to neutralise significant part of the cost of this initiative over time while fortifying its market position,” HLL said.

According to analysts, the move is short-term. Analysts added that the coming 2-3 months would be very critical for the company as growth in volumes would take place as a result of all these steps. Such periodic changes and new schemes are likely to continue in future in the highly competitive FMCG sector.