There is a significant gap between urban and rural markets in the penetration of feminine care products, despite the impressive growth of the category over the last three decades. While the feminine care sector has expanded 100 times over the past 30 years, reaching Rs 3,400 crores, rural India continues to lag in terms of product usage.
“We expect double digit growth to continue over the next three years for the category. Not surprisingly, penetration levels lag in rural versus urban. Roughly the numbers are in the range of about 60 percent for urban India and below 40 percent in rural India,” PGHHC Chief Financial Officer, Mrinalini Srinivasan, said in the fourth quarter FY24 investor call on August 18. The company follows the July-June financial year.
Femcare contributes about 70 percent and healthcare about 30 percent in revenue of the company, with femcare leading the growth.
This disparity indicates substantial untapped potential in rural markets. The company is seeing green shoots in rural consumption with the monsoon softening inflation, and category demand growing. The category sales and users are growing in double digits.
“These are green shoots that we see closer home to the FMCG industry,” she said, emphasising the company's focus on increasing both penetration and consumption. Even in urban areas, the average value spent per consumer in India is just 1/6 of that in China, leaving significant room for growth.
P&G Hygiene witnessed sales of Rs 4,192 crores, up 7 percent from the previous year in FY24. The company also reported operational profits of Rs 809 crores, up 19 percent.
Innovations in the feminine hygiene category, including the introduction of products like Whisper Period Panties and Whisper Ultra for heavy flow days, have driven category growth.
PGHH reported a 46.40 percent decline in profit after tax at Rs 81.06 crore for the quarter ending June 2024 on account of increased spending as compared to Rs 151.24 crore in the same quarter of the previous year.
"PAT for the quarter was Rs 81 crore, with an increase in spending for demand generation to support innovation in healthcare and feminine care," said an earning statement from PGHH.
According to the investor meeting, the company saved Rs 130 crore through its productivity interventions in the July-June fiscal year. That will fuel reinvestment growth strategy.
PGHHC reduced touch points in its supply chain by 60 percent through seamless data analytics and automation. The AI, machine learning ordering system for its distributors helps better predict distributor shipments and retailer needs.
The company is using the right data drivers and techniques to develop a deep understanding of consumer behavior on quick commerce, for its brand-building efforts with a strategic supply chain model to support the unique business structure of quick commerce.
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