Soap business presents a massive business opportunity in the aftermath of coronavirus as more and more people adopt hygiene practices and become conscious of health concerns.
Soap business presents a massive business opportunity in the aftermath of coronavirus as more and more people adopt hygiene practices and become conscious of health concerns. “While growth rates and usage rates of the past two to three months may not sustain, the HUL management seems confident in the opportunity for volume momentum and premiumization momentum being much stronger than it has been in recent years,” a Motilal Oswal report said citing Sanjiv Mehta, MD, HUL. Further, other home cleaning and hygiene-related products such as detergents are also expected to boom in the wake of coronavirus pandemic.
HUL also said that while market growth may not be under their control during the coronavirus outbreak, competitive growth is. “Big brands die when they do not reinvent and remain contemporary, an exercise in which HUL has succeeded for the majority of its portfolio in recent years,” the report said. The company had started to ramp up the production of soaps, sanitizer and hand washes under its in-house brand Lifebuoy as early as March, even before the government had implemented nationwide lockdown.
While FMCG sales in general remained down in the month of April and May, sales of evolved hygiene categories such as hand wash, hand sanitizer and floor cleaners continued to grow in lockdown phase I, according to a report by market research firm Nielsen. Many new companies also entered the hand wash and hand sanitizer segment after major demand and supply gaps arising out of the coronavirus pandemic. Dabur, Nykaa, Emami, Nivea, ITC also recently debuted into manufacturing of sanitizers for both commercial and charity purposes.
Meanwhile, HUL recently completed the acquisition of GSKCH. The merger comes at a time when customers are increasingly seeking health and immunity-boosting products. “With GSKCH’s strong proposition on nutrition, the current scenario acts as a tailwind for the HFD category,” the report said. During the pandemic, the sales of immunity boosting products has seen a spike with another FMCG player Dabur reporting 400% sales jump of its chyawanprash range in last quarter.