HUL leads the personal care market with soaps like Lux, Pears, Ayush and Dove
In July, the largest consumer goods company in the country reduced prices of Lifebuoy, Lux and Dove soaps in order to counter weak demands and tough competition, the publication added.
Lux and Lifebuoy, which are from the company’s beauty and personal care segments, are two of the top soap brands in the country in terms of sale. India has a toilet soap market of Rs 20,960 crore, as per research firm Euromonitor. In household penetration, Lifebuoy happens to be the highest-selling soap brand in India, as per researcher Kantar.
On the other hand, the company increased prices of face-washes for brands such as Fair & Lovely, Ponds, Pears and Dove between 4-14 percent, said Mint referring to an August-27 report by Kotak Institutional Equities.
Moneycontrol could not independently verify the news.
"HUL does selective and judicious price changes across its portfolio in the normal course of its business. Given that the commodity prices are expected to remain benign for a certain time period, we have taken price reductions in the range of 4 percent to 6 percent in Lux and Lifebuoy portfolio, while it may be higher on certain packs in order to pass on the benefits to the consumers," Mint quoted a HUL spokesperson as saying on August 27.
The HUL top management gave a hint in July, during the conference call with investors, that the company might go for a price-cut as it expected weak commodity prices to continue.
HDFC Securities analyst Naveen Trivedi mentioned in July that Lifebuoy and Lux had been facing tough "competitive intensity" in market share loss amid a "benign commodity environment", the publication said.
According to Edelweiss analyst Abneesh Roy, it is the right strategy for HUL to reduce prices as "soaps volumes are soft and palm oil prices continue to remain lower on a year-on-year basis, although have picked up lately," Mint reported.He also added that the move would help HUL gain market share from the unorganised sector and some of the smaller players.The Great Diwali Discount!
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