The Times of India (28/08/2019) - MUMBAI: Toilet soap makers, led by Hindustan Unilever (HUL), have cut prices following muted growth in the category. Additionally, manufacturers have passed on cost benefits from low palm oil prices to boost market demand.
An HUL company spokesperson said, "HUL does selective and judicious price changes across its portfolio in the normal course of its business. Given that commodity prices are expected to remain benign for a certain time period, we have reduced prices by 4-6% in the Lux and Lifebuoy portfolio. It may be higher on certain packs, in order to pass on the benefits to consumers."
Wipro Consumer Care, which makes Santoor soap, has also reduced prices to stay competitive. Wipro Consumer Care president (India consumer care business) Anil Chugh said, "Yes, we have also cut prices in soaps, passing on the benefit of lower raw material prices to the consumer. We believe this will help increase consumption."
Volume growth has been a challenge for HUL over the last few quarters and the management had said in its discussion on on June quarter results that it witnessed muted performance in its skin cleansing division, largely on account of mass brands Lifebuoy and Lux. HUL CMD Sanjiv Mehta further added that the company was looking at price cuts in soaps.
Industry analysts said the move to reduce prices could spur growth in toilet soaps, a highly penetrated category.
"This is the right strategy by HUL in our view, considering soaps volumes are soft and palm oil prices continue to remain lower on a year-on-year basis, although having picked up lately," said Edelweiss Securities executive VP (institutional equities research) Abneesh Roy. He added that the move could help HUL gain market share from the unorganised market as well as from other smaller players.
Read more at: