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Overview of Indian Fairness Cream Industry- Group 4

Overview Of The Fairness Cream Market

Introduction of the Fairness Cream Market in India


Rupa has just finished college, is on the look-out for a job and a husband. Hers are what would be euphemistically called dusky looks but to those who matter, she is plain dark. And they know she doesn't stand too many chances of getting a good match. Her job prospects look gloomy too - and that also is attributed to her complexion. Rupa, a 21st century lass, though disheartened by her failure to land either guy or job, deals with it in a typically 21st century way - she uses a fairness cream and hey presto! jobs and eligible bachelors queue up to win her hand! Sarcastic? Yes. Exaggeration ? No. As much as these ads get one's goat, the reality is that Indians at large, and most of Asia, for that matter, are partial towards light skin. And companies in the business of purveying fairness claim they are only fulfilling a need, not making a statement about what is beauty and what is not. In the Rs 950-crore market for fairness products, the colour of competition is intensifying as major players are chalking out fresh game plans to woo complexion-conscious consumers across the globe. In India, the sector had registered 20% growth in 2006 i.e. the highest growth experienced among all sectors in that year. Today the Fairness Creams Industry is booming. Due to which these companies are diversifying into other Fairness related Product like washes, soaps and under-eye creams, not to mention sachets, which promise fairness. Moreover these companies are also introducing new variants to gain a Larger Market Share for instance HLL has even launched an Ayurvedic Fair & Lovely, probably to cash in on the craze for everything herbal (and by extension, safe and non-chemical). Fairness Cream Companies follow Low Pricing Strategies as they want to even reach out to the low income group who are usually more colour sensitive moreover Low-income consumers too are increasingly looking for such skin care products. Low unit price packs, like sachets, are to meet their needs within their budget, thereby facilitating consumption. Sachets, as with any other product, are intended to induce trials also. The cost per gram is substantially less in sachets. They also follow low pricing due to the cut throat competition in the market.

Strategic Management - SYBMS

Overview Of The Fairness Cream Market

Industry Size
Fairness products account for a whopping Rs 2000 cr of the skin care segment. The annual growth rate is between 10 and 15 per cent. HUL, with Fair & Lovely, has a massive 73 per cent market share, followed by CavinKare Fairever with over12 per cent share and Godrej FairGlow with a 3.5 per cent There are various products available for men to look fair like fairness creams, beauty packs, face massages, face powders etc... The most favourite and popular among these are the fairness creams.

Potential Of Industry
The past two years have especially been a fairytale success. At least 20 new fairness-out-of-atube brands have entered the market taking the number of fairness creams available to more than 40. From the grand old dame, Fair & Lovely, and Pears Naturals Fairness from Hindustan Lever Ltd (HLL), to Emami's Naturally Fair, Avon's PT-White Fairness cream, Revlon's Touch & Glow, CavinKare's Fairever-the list goes on forever. From Rs 384 crore in 1997-98, the fairness product market in India leapfrogged to Rs 558 crore in 1999-2000. And in the first six months of 2009-2010, sales had have touched Rs 760 crore. Growth rate in 2011 is expected to rise by 10-15%. There are many new players who are entering the market, so the fairness industry is expected to boom in future.

Strategic Management - SYBMS

Overview Of The Fairness Cream Market

INDIAN FAIRNESS CREAM AND THE ECONOMY Fairness creams have become a vital product for the Indian FMCG companies in increasing their overall sales due to the importance given by Indian consumers towards fairness. There are a number of creams in the market and many cosmetics. India has a tropical climate with maximum number of months having sun shining as the brightest star. Moreover, the temperatures are rising day by day. These factors create a need for the otherwise darkened skin due to over-exposure to the shining sun. Looks-conscious consumers propped up sales of fast-moving consumer goods (FMCG) companies, who in turn rewarded loyalty by not raising prices of fairness, anti-ageing creams, bathing bars and their likes, although input costs have risen in an economy ravaged by drought and then floods As the global economic crisis consumed nearly every sphere of business, one industry held out against recession through 2009 by promising to help Indians look fairer, younger and their teeth whiter, kids stronger and taller, and toilets cleaner, reports PTI. In particular, fairness creams have been very popular and many FMCG companies have come out with their own brands. For instance, as of 2007, Hindustan Unilever Ltd. (HUL) had a range of products under the brand name Fair & Lovely'. According to industry experts, as of 2007, the emerging skin-lightening products industry in India was worth US$318 million, and was growing at a fast rate, especially in the male-grooming sector. Skin-lightening products accounted for almost 40 percent of the Indian cosmetics industry. Hindustan Unilever, LOreal SA, Beiersdorf AG and Emami Ltd.target Indians with fairness creams pledging to make them more attractive and more successful by lightening their skin. Sales of whiteners increased 17 percent to 20.5 billion rupees ($432 million) in the nine months to September from a year earlier, according to research by Haarlem, Netherlandsbased Nielsen Co. With rising urbanization and affordability, skin creams and the fairness creams markets are poised to grow further, said Abhijeet Kundu, an analyst at Antique Stock Broking Ltd. in Mumbai. The fairness creams are among the most advertised in India.

Strategic Management - SYBMS

Overview Of The Fairness Cream Market

Major players : Leaders And Challengers


Indians are attracted to fairness and hence the fairness cream market would never run out of business. Hence Fairness creams have become a vital product for the Indian companies. India is a country known for its diversity different consumers from different parts of the country prefer different brands. The leading players in the market includes Hindustan Unilever Ltd., (HUL's) 'Fair & Lovely' with 76 percent of the market share and Cavin Kare' s 'Fairever' with 15 percent of the market share. Other important players like Godrej' s 'Fairglow', Emamis 'Fair and Handsome', Vicco and Himalaya share the rest of the market share. Fair & Lovely (HUL) Fairever (Cavin Kare) Fairglow, Fair and Handsome , Vicco, 76 % 15 % 9%

Market Leader - Fair & Lovely (by HUL) Launched in 1975, FAL is the product born in the Unilever research center. Fair & Lovely ( FAL) is the brand that revolutionized the Indian Skin care industry. Indian skin care market was dominated by conventional beauty care products like Bezan, Multani Mitti etc. FAL changed all that. It virtually created and owned this category for long. In the fairness market, FAL enjoyed monopoly till Cavin Kare entered this lucrative segment with Fairever. In 1988 the brand went international. This brand is World's first and largest Fairness cream brand with a presence in 40 countries and a value of around Rs. 6 billion. Continues to be a leader...... FAL virtually created and owned this category of fairness creams for long. In the this market, FAL enjoyed monopoly till Cavin Kare entered this lucrative segment with Fairever. It was found out that most of the consumers prefer fair n lovely.The awareness level of it was also higher. Also various TVCs and marketing strategies keep it to the no.1 position like kumkum aadi telam. FAL sustained the pressure from the competitor by careful branding and new product launches. The brand never failed to emulate and learn from the competitor. It has laddered up to aspirational values like "Transformation of Women". The insight is that the transformation will be more than skin deep. The ads showing a girl achieving the ambition of being a cricket commentator ( a male bastion) were very much effective in connecting with the audience. HUL has also extended the brand to more aspirational values by launching Fair& Lovely foundation that works for Women Empowerment achievement and Transformation which are the qualities for which FAL stands for.

Strategic Management - SYBMS

Overview Of The Fairness Cream Market

Fair & Lovely was able to dominate the fairness market because of careful marketing and is a showcase of the marketing genius of HUL.

Strategic Management - SYBMS

Overview Of The Fairness Cream Market

The Competition
Indians are attracted to fairness and hence the fairness cream market would never run out of business. FAL virtually created and owned this category of fairness creams for long. In the this market, FAL enjoyed monopoly till Cavin Kare entered this lucrative segment with Fairever. Today companies are looking at innovative strategies to reach out to customers. companies are reaching out to the target customers through its wide range of fairness creams with Aloe Vera Extract, turmeric, vitamin-E, lemon extract. These are some of the ingredients which form major formulations but companies use it to differentiate their products and break the clutter. Today all the cosmetic companies have at least one fairness cream under their brand name. Although packing changes regularly, formulations remain the same. Starting from the most popular brand, Fair & Lovely plays as the market leader with oldest brand and highest customerbase. Competitors How Other Products Are Competing With The Market Leader Olay (by P&G) - For that flawless look, Olay of P & G, quite openly challenge FAL with the seven-day test and a money-back guarantee. FAL have also launched a premium subbrand Perfect Radiance to tap the premium segment of the market to counter Olay Emami Shahnaz Fairone claims its product as herbal and best in its range. It priced its product economically in range as against the normal line of products at premium prices. For the last few years, Emami is also selling its fairness cream for men Fair & Handsome. The product is a great success, especially in small towns and cities. Vivel - ITC's soap brand Vivel has launched its fairness cream extension in the Indian market. The brand has been launched in Kerala and is expected to offer stiff competition to the market leader Fair & Lovely. In a direct challenge to Fair & Lovely, Vivel is selling its sachet at Rs 5 ( introductory offer) compared to FAL's Rs 7. Indian personal care market is driven by sachets and the Rs 5 price point will help Vivel to achieve the important customer trials. Rs 5 price point is also beneficial to both customers and retailers because of the coinage factor. This pricing may force HUL to lower the price of FAL's sachet. Cavin Kares Fairever - FAL practically enjoyed absolute monopoly until the entry of Fairever. However, when Fairever launched the ayurvedic variant, FAL launched a much better variant.

Strategic Management - SYBMS

Overview Of The Fairness Cream Market

Ozone Ayurvedics - Then came the competition from Ozone Ayurvedics with their brand No Marks trying to carve a niche. HUL countered with FAL Antimarks and launched a controversial comparative ad that took the steam out of No Marks. Godrej's Fairglow - When Fairglow launched the soap, FAL also responded with soap. FAL never allowed the competitors to gain an upper hand in the market which it created. Fairness Creams For Men - Emami entered the men's fairness cream segment in 2005 with the launch of Fair & Handsome, which still dominates the space with close to 70 per cent share. In 2007, Hindustan Unilever launched Fair & Lovely Menz Active but it could not gather much share. Over the past year, multinationals such as Beiersdorf (Nivea for Men) and L'Oreal (Garnier PowerLight) launched a slew of products for men's skin care.

Strategic Management - SYBMS

Overview Of The Fairness Cream Market

CHALLENGES
Till less than three years ago, HLL's Fair & Lovely was the undisputed monarch of the market with a 90 per cent share and Emami's Naturally Fair was a poor second at 6 per cent. All that changed when Chennai-based CavinKare Ltd (CKL) launched Fairever. In just two years, the cream notched up an impressive 15 per cent marketshare leading to fall in the market share of HLL fair and lovely.This example clearly shows that there are small industries which are giving tough competition to big and settled companies. Now a days cometition have become very tough because every company is trying to bring innovative products.

Strategic Management - SYBMS

Overview Of The Fairness Cream Market

Future Trends - Fairness Cream For Men Is The Way To Go.


The potential lies in converting male users of women's skincare products to products developed specifically for them," said Dinesh Dayal, chief operating officer, L'Oreal India. Change in Indian mindset towards male fairness has today opened a huge untapped market for cosmetic creams. This is surely a great option as the women;s skincare product market is truly and highly competitive. Hence the strategy for future growth lies in seizing this opportunity and using it effectively. Men & Fairness Creams? - If asked few decades back the answer would be a big 'no' as fairness creams and cosmetics were the personal properties of female race. But today alarming statistics reveal that cosmetics and fairness creams are equally sought after by men too. As fashion trends and lifestyles change, the attitudes and conceptions about human beauty also have undergone tremendous changes. Experts said the men's grooming market is expected to grow thanks to the young population and rising middle-class. Half a decade ago, when Shah Rukh Khan took a dip in a bathtub to endorse Lux, he did much more than just endorse a soap brand. He set a precedent. Back then, the male grooming market was almost non-existent. It's different today. Now, as the segment evolves, even Shahid Kapoor and John Abraham are endorsing male grooming products. Men account for about 10-15 per cent of fairness cream use across the country and the figure is growing. In absolute terms, it works out to about Rs 300 crore in sales. About 20 per cent consumers of Fair & Lovely, one of HUL's mega power brands, are men. Emami decided to push the opportunity, the rest followed. The market was soon offering males fairness creams, haircare products beyond dyes, scrubs and face washes. Today, the male grooming segment in personal care is ready for its next round of product expansions and additions. Emami entered the men's fairness cream segment in 2005 with the launch of Fair & Handsome, which still dominates the space with close to 70 per cent share. In five years, Fair and Handsome has become a Rs 100 crore brand, growing at 45 per cent per annum and contributing 15 per cent to Emami's revenues. In 2007, Hindustan Unilever launched Fair & Lovely Menz Active but it could not gather much share. Hindustan Unilever is currently advertising Fair & Lovely MAXFairness for Men. It has also extended its Vaseline brand to the men's grooming segment with the introduction of the Vaseline for Men skincare range, including fairness creams, face wash, body lotions and body washes Over the past year, multinationals such as Beiersdorf (Nivea for Men) and L'Oreal (Garnier PowerLight) launched a slew of products for men's skin care.

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Strategic Management - SYBMS

Overview Of The Fairness Cream Market

While the overall cosmetics industry is growing at 15 per cent year-on-year, fairness creams constitute a huge market with sales worth nearly Rs 2,000 crore (Nielsen 2010 figures). Of this, men's fairness creams account for 10 per cent, though growing at 30 per cent yearon-year a sign that they're catching on. According to a survey conducted by Nielsen.

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Strategic Management - SYBMS

Overview Of The Fairness Cream Market

Bibliography

http://www.articlesbase.com/health-articles/there-are-a-number-of-fairness-creams-inthe-market-939990.html#ixzz10Gr9zreg Business Line Thursday, Sep 05, 2002 All's fair in this market http://www.thehindubusinessline.com/catalyst/2002/09/05/stories/2002090500040300 .htm : http://www.articlesbase.com/health-articles/there-are-a-number-of-fairness-creamsin-the-market-939990.html#ixzz10GuWdRoy Bottom of Form NOTE Major parts of this project were drafted on our own, articles were used as base references.

Credits
Snehal Babbani Kaushal Dedhia Aakash Jain Ruchika Kohli Nehal Panchal Vidhi Shah

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Strategic Management - SYBMS