P&G India finds a winning formula

P&G’s turnaround is a sharp contrast from 5 yrs ago, when it had lost share in 2/3rds of product categories.

Procter & Gamble India, that sells products ranging from detergents and shampoo to razors and sanitary napkins, said it gained shares across categories, vindicating the world’s largest consumer goods company’s latest strategy to launch lower priced-products, increase rural reach and aggressively innovate existing brands.

The company also claimed that its brand, Head & Shoulders, is now the largest shampoo brand in the country, edging past Hindustan Unilever’s Dove and Clinic Plus.

“Our primary focus is growing with the sustainable top line and bottom line results, with a combination of growing categories faster and increasing market share. Both are important, and one is not more important than the other,” P&G India CEO Madhusudan Gopalan had told ET in his first media interaction after taking charge of the company a year ago.


Until last year, the 43-year-old was heading P&G’s Indonesia business, and had also worked in the Cincinnati headquarters with the P&G-Walmart business team. “Based on what we’ve seen in the past one year, where we put in place the strategies for driving balance in terms of top line, bottom line and cash, we believe that we’ve hit the success formula.”

graph

P&G’s turnaround is a sharp contrast from five years ago, when it had lost share in more than two-thirds of product categories, and posted losses that wiped out the entire gains since it had entered India in 1993. Over the past four years, it has also been de-prioritising several unprofitable lines of business in India, in line with its global strategy, that slowed down its revenue growth but led to much more profitable business.

ADVERTISEMENT
There is a gradual shift in its positioning too — from higher margin urban-centric products to low-priced ones. For instance, it launched Gillette Guard, its lowest cost razor designed for India a few years ago, which is now the largest selling variant in the country and is being used by more than 65 million men. More recently, it has launched Whisper napkin — at ?25 — its lowest price till date.

“Distribution is mission critical, especially for lower urban and rural, and that’s been a big focus for us. P&G’s distribution is seven million outlets now,” said Gopalan, an IIM, Calcutta alumnus, who started his career at P&G India in 1999 in the sales division.

The company controls more than half the market for sanitary napkins, diapers and shaving razors, a quarter in shampoo segment and about a fifth of India’s laundry category. A recent investors’ note by Jefferies said it has seen price war by P&G in categories such as detergents and feminine hygiene segment. “Consumer sector saw some pick-up in competitive intensity with P&G getting aggressive, though not alarming yet,” the report said.

The company said India is one of the fastest growing markets globally for P&G, and remains a priority for the Ohio-headquartered giant. India is also looked upon as the global innovation hub on the traditional retail part.

ADVERTISEMENT
“India is the global innovation centre for kirana stores. We learn how and what is the right packaging that wins with the consumer. We do a lot of work to understand what is the right way in which we can support the kirana store owners to try to grow their business,” said Gopalan.
READ MORE
ADVERTISEMENT

READ MORE:

LOGIN & CLAIM

50 TIMESPOINTS

Related Companies

More from our Partners

Loading next story
Text Size:AAA
Success
This article has been saved

*

+