ITC Blog

Monday, September 03, 2007

ITC to foray into soaps

The buzz about ITC plunging into the highly penetrated toilet soap market is getting louder by the day.
It is learnt that the cigarette-to-hotels major is eyeing the mass segment of the soap category, which is why some existing players are said to be sitting on old stock and holding on to the price line.

Sources said ITC plans to unveil its soap brand in the next two-three months. The name of the brand is being kept closely under wraps, and, it is not going to be the same brand, Superia, which the company was test marketing over a year ago in some rural areas, sources added.

A senior industry official told TOI: "Companies are holding on to the price line for the moment, despite pressure building on the raw material price front. We don't want to get caught in a situation where we raise prices and ITC launches its soap brand at a lower price."

Palm oil prices are currently ruling at around $650 per tonne. Industry analysts are skeptical whether I TC should enter the market at such high raw material prices.

Dealers of fast-moving consumer goods (FMCG) companies said that the last price increase that took place in the soap segment was initiated by Hindustan Unilever (HUL) in July this year.

HUL had taken a mid-year price increase on various products across categories. Prices of Pears soap and Lux were revised upwards. In the case of its popular soap brand Lifebuoy, HUL had reduced the grammage, keeping the price intact.

HUL is the leading soap maker in the country, with a market share of 54%.

As for Godrej Consumer Products (GCPL), the second largest soap maker with a market share of 10%, the company had recently said that prices would be raised in October-November.

Industry analysts said ITC's entry is bound to create excitement in the Rs 4,400 crore toilet soap category.
Decible levels on the advertising and promotion front are set to soar in the next few months. Besides, the Rs 12,369 crore ITC has made a significant splash in the packaged foods category, with Sunfeast and Aashirvaad.

Under Wills Lifestyle specialty stores of lifestyle retailing, ITC offers a range of Wills Classic work wear, Wills Clublife evening wear and Essenza Di Wills range of fine fragrances and body care products.

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