‘HUL slipping in some personal care segments’

MUMBAI: Hindustan Unilever (HUL), India’s most valuable pure-play consumer company, appears to be yielding ground in some personal-care categories, with both local and overseas challengers seeking to breach the leader’s bailiwick in an expanding market that’s leaning increasingly towards herbal products.
In the past two years ended September, the maker of Lux and Dove soaps saw its share decline 290 basis points (bps) to 41% in skin-cleansing or soaps, the largest segment within personal care, according to Nielsen data sourced from industry officials. By that gauge, the fall was 320 bps in oral care, while in the hand-and-body-care category, HUL saw its share decline to 29.8% in September, compared with 34.2% two years ago. HUL did not comment on specific marketshare trends, but highlighted the apparent disconnect between its growth patterns and the Nielsen statistics.

“It is pertinent to clarify that Nielsen data may not provide the correct picture and there is a huge disparity between our actual growth numbers and the HUL growth numbers shown by Nielsen,” said the HUL spokesperson. The face-care segment saw a 100 bps decline at 44.9%. Hair care was the only business where it gained 200 bps, with a share of 51%.

For its part, Nielsen said its estimates on FMCG sales are derived using an elaborate extrapolation mechanism, involving the largest panel across more than 100 markets where it tracks sales of various product categories.

“There will obviously be a divergence between the manufacturer’s shipment numbers and Nielsen estimates, since we only look at the retail-to-consumer sales, and do not cover certain channels like exports, army canteen, B2B sales, etc. The variance could also be due to a multilayered trade intermediary structure and trade pipeline lag in a market like India, which has recently seen significant disruption due to demonetisation and Goods and Services Tax,” said a Nielsen spokesperson.

However, HUL’s reported numbers of personal care business segment, which accounts for nearly 60% of its profit, has seen tepid sales growth in comparison with HUL’s overall business.

“Consumers are drawn to such brands under the perception they are safer than cosmetics. Hence, personal care segment saw entry of newer brands, and existing companies also launched products in the ayurvedic sub-segments,” said Anand Mour, analyst at ICICI Securities.