Is HUL's market share declining?

By Samidha Sharma and Sagar Malvia, CNBC-TV18

Hindustan Unilever, that prides itself on the fact that two out of every three Indians use its products, reported a 20% growth in second quarter sales last week.  Yet they may be getting less competitive. In some categories they have actually ceded market share.

Till a year ago when Savita Tiwari, a College Lecturer, went out to shop, 60% of her cart was made up of brands: Like pears, dove and sunsilk - all from Hindustan Unilever. However, now every time she shops, she finds more options and newer brands.

Savita Tiwari, Consumer, said, “The older generation was sticking to older products because those were the products available at that time. But now, the present generation is trying new products available in the market like Olay.”

And that's why Hindustan Unilever's share of shampoo, personal wash and skincare has dropped by between one to one and a half percent in the past one-year. When contacted HUL, it did not wish to comment.

On the other hand international players like P&G, Nivea India, and L'oreal have all stepped up product launches and ad spends. For instance, Biersdorf has launched as many as 20 new products from its global portfolio under the Nivea brand and doubled its ad budget. Meanwhile, ITC’s Fiama and Vivel ranges have managed a 2% share in the personal wash market thanks mainly to its distribution network.

Soma Ghosh, Marketing Head, Nivea India, said,”It is actually quite obvious that they would be first to lose share, so many brands are coming and they would eat from levers. Probably it's true that they are not innovating as fast as lot of newer players are innovating.”

It is still advantage Hindustan Unilever, but a one percent drop can mean a loss of at least Rs 60 crore, depending on the category. So one can expect the defense to begin.