Smelling Good-Battle for Supremacy in the Deodorant Market

Published by MBA Skool Team, Published on July 22, 2014

India has witnessed exponential growth in the last two decades post liberalization, which in turn led to a sharp increase in the income of the middle class & lower middle class segment, which ultimately lead to the increase in discretionary spending. Indian deodorant market has witnessed a CAGR of about 18 % last year, and over 20 % since the last 5 years.

There has been an upsurge in demand from small cities owning to change in lifestyle & aspiration of middle class; Deodorant companies are now shifting their focus from large metro cities and exploring other markets and gearing up to launch a range of affordable deodorants, perfumes and colognes during summers. Deodorant industry is highly fragmented & there is no brand loyalty. More than 500 type of deodorant are available of more than 300 brands.

Deodorant comes under personal care category, but unlike the norm in personal care which is generally dominated by women; deodorant market is dominated by Men. Men generally work outdoors for long hours in hot & humid conditions. Hence, Men require deodorant to keep them fresh throughout the day. Deodorants are of two types Perfume passed deodorants & Antiperspirant. Around 69 % of the market is controlled by Men’s deodorant products, and this category is evolving along with change is consumer attitude & lifestyle. Besides deodorant, high-end perfumes in the men category are also doing considerably well due to the growing urge among urbane Indian males to stay well-groomed.

There are limited options for women but the segment is growing rapidly, as women have started switching to deodorants from Talcum Powder as well as perfumes. Women segment is still an untapped category with enormous growth potential. Indian women have traditionally preferred perfumes to deodorants, but this is changing slowly. Hindustan Unilever is one of the largest players in deodorant market & has products like Axe, Rexona and Dove.

The number Uno position of HUL has been challenged by Vini cosmetics which is promoted by Darshan Patel. FOGG has a unique positioning, as it is high on fragrance & it uses a non-aerosol pump which does not require gas. Hence FOGG does not vaporize easily and linger when sprayed on - overall a value for money proposition. FOGG has turned this factor into a marketing pitch. FOGG has more number of sprays per bottle as compared to any of its competitor, which has been communicated effectively to the consumer through the Brand communication efforts. During the initial launch, FOGG was more than 15 % expensive than its competitors. This gap between FOGG & its competitors has reduced to 7-8 %, as most of the competitors have increased prices.

FOGG with its unique selling proposition and has cleverly managed to tap into the needs & aspirations of youth. It seems to be delivering on the value quotient and it liked by the customers. FOGG has also diversified in the women’s category by launching FOGG delicious for women. This functionality of FOGG , more number of sprays in a bottle struck a chord with the consumer in an inflationary environment. FOGG has a differentiated value proposition from all its competitors. It has a effective advertising strategy and branding targeting the youth .

VINI outsources manufacturing for all its products, including its most popular band FOGG. This allows the company to focus on its core competency, marketing the product. VINI has been able to create & maintain a sustainable competitive advantage. Vini Cosmetics through its unique positioning and value proposition has been able to attract consumers and fulfill their aspirations.

The fall of Axe from the number Uno position has been due to many factors, the positioning of Axe as a chick magnet & helping men be attractive to women, has been copied by many Me too brands like wild stone . AXE generally had saucy ads showing barely clothed women throwing themselves at men. Axe advertisement which showed angels dropping from the skies when a man uses AXE, was not considered appealing by the Indian consumers.

Axe has now launched a new advertisement of Boat party, The AXE Boat Party is all set to make its India debut in Goa, and it has stuck a chord with customers. More than 2.5 million customers have tried to register for the boat party. It remains to be seen whether the consumer interest will translate into the actual product sale.

The deodorant market is largely youth centered, who constitute the bulk of India's population.  Deodorants are taking the place of talcum powder just the way tooth paste displaced tooth powder a long time ago. There are many little known companies that are churning out smell-good sprays for customers in smaller towns and rural areas, people from middle income & low income group also taking up deodorants. Given  the penetration of deodorant is still moderate and the consumption low ,as compared to the other developed countries,  We can say that  the deodorant market is still in a phase of growth. Deodorant industry has low entry barriers and good margins, which makes it one of the most sought after industry by Indian Personal care & Pharmacy companies.

Since there is very little brand loyalty, even new players can gain market share. Going forward, the brands that are able to drive penetration as well as usage would emerge as winners.

The article has been authored by Abhijeet Singh, FORE School of Management, Delhi

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