Hygiene is a series of practices performed to preserve health. According to the World Health Organization (WHO), “Hygiene refers to conditions and practices that help to maintain health and prevent the spread of diseases.” Personal hygiene refers to maintaining the body’s cleanliness. We have learnt all this when we were in school and now once again Covid-19 has taught all of us the importance of hygiene. 2020 was the year of cleanliness and hygiene and it is going to be the way of life going forward.
In the third part of the six series webinar, we are going to see how 2020 shaped the hygiene, personal care, beauty and cosmetics industry.
The webinar was moderated by Vicky Menezes, Founder, CMPL and Editor-in-Chief & Co-creator, WOOB. Prince Chatterjee; Head – Private Label; Imports & International Brand Alliances; Health & Glow, Sunit Sharma; Director G Brand; Grofers, Harsh Pal Singh; Managing Director; Ambe Group, Tapan Kumar Banerjee; Director; Mahika Packaging and Umair Siddiqui; Manager – Own Brands; Star were the esteemed panellists for this webinar.
Opportunities during Covid-19
2020 is the year of hygiene. Hand washes, shower gels, sanitizers had taken the top spot. Everyone knew that there was a huge demand but no supply, said Sunit. Hand washes were in demand always and it was growing with 12% CAGR. Soaps were also in demand when WHO said that soaps can also be used for the usage.
However, that was not the case with sanitizers, observed Sunit. The demand for sanitizers has been phased out. Though it hasn’t come down to a level where it was during the pre-Covid time but, definitely it is not there where it was when the pandemic started.
In 2020, there was a renewed understanding that hygiene is of most importance if you need to survive. Technically we saw two phases – one was the panic buying, which made the demand supply crisis. But we saw a huge peak coming only because of the panic buying, which happened with hand washes, soaps, sanitizers, said Prince. “The Covid-19 has actually brought a renewed understanding among consumers that hygiene is going to stay for long. It might switch, you might see sanitizers sales getting down to liquid soaps, bar soaps etc. but we will continue to see that momentum.”
We might have already noticed that there are a lot of advertisements happening around the vaccine and it says even if you are vaccinated please continue to wear your mask. So, it means even if you are vaccinated you should not leave the habit of washing hands, informed Prince. If I talk about this part of hygiene, we also saw a huge demand in terms of shampoos and conditioners. Generally, when we talk about hygiene in the Covid-19 scenario, it would mean either a sanitizer or a handwash. But we saw an effect also coming into shampoos and conditioners which is part of the overall hygiene.
“I have also experienced a surge of do it yourself manicure and pedicure kind of stuff which is also part of hygiene. In that shell there are huge opportunities going forward. Consumers are not going to leave all of that. So, consumers are going to look for these opportunities and it is important for us that we understand what the consumer is looking for and then offer them accordingly.”
What to look for in a supplier?
Talking about what to look for in a supplier when you are looking to develop a product category in the hygiene space, Umair explains that they have a comprehensive audit checklist which ensures that each and every aspect of the manufacturer – right from the capacity, capability, kind of machinery that they have, how ethically are they sourcing the raw materials, how sustainable is their supply chain etc. Capability of the manufacturer is one of the key things which we ensure on our checklist.
Emphasising on the attitude of the vendor, Umair said that putting up a new category is not a very difficult task. It won’t take much time to do that. But if your vendor doesn’t have the right attitude in terms of accepting the mistakes or supporting wherever we need support then we run into a problem.
We treat our vendors like our partners. We expect them to follow the standards that we follow. These are the key things that we look for in a supplier, stated Umair.
When it comes to packaging, we try to work with reputed suppliers to ensure they have the capability, conviction and the quality in their plants, asserts Umair. We ensure at least for the first three batches, a person from my internal team, quality team and packaging team is present both at the printing location as well as the final production location. After the 2-3 batches, everything is set.
A manufacturer should have an understanding of the market, product and the need of the time, affirms Harsh. The manufacturer should be ready with the team. We have to understand what the market or the buyer needs. We should have all the teams in place and then interact with the customer, where we understand what exactly they want – like the quality of the product, ingredients, whether they want chemicals or preservatives in it, they might want it to be an eco-friendly packaging etc. It is very important for both the sides to be aware of the need of the market, time and what kind of demand can be generated in the market. Once we make the product, it has to comply with the regulatory part of the domestic market and may be an international market too.
Talking about the current scenario, Prince said, around 30% of the global requirement of the glass nail polish containers is supplied from India. Globally, if you look into packaging, the Chinese are ahead of the Indians. The reason is price, not that they make the best quality. It is a huge opportunity for Indian manufacturers to not only capitalise the domestic opportunity but also the international. It is quite ironic that the Indian manufacturers actually have to sell abroad and when we make Indian products, we are looking for Chinese manufacturers to suffice our requirements.
Tapan is of the opinion that there are great opportunities and fantastic manufacturers available in India. It is just that there needs to be a proper channel so that the buyer can identify what exactly is available in Indian market.
To bridge this gap between the buyers and the sellers we try to create a platform like CMPL, said Vicky.
India, a hub in the future?
In 2020, whatever has gone is gone, now in 2021 onwards I see that there is a huge opportunity lying where India can become a big hub for the exports in the hygiene and personal care products space, said Sunit. The only thing I keep missing here in India are the packaging solutions. For personal care products, packaging is primary and the product is secondary. You need to have fantastic packaging and only then customers get attracted and make up their mind to buy it. Packaging is something that we are missing here.
China is fantastic in the packaging segment, stated Sunit. Everyone knows China ka maal jyada din nai chalta hai. We always doubt their quality but the design, look, feel and appearance of the packaging gives the confidence that their product is better.
Speaking about cosmetics, Sunit said that Korea comes to our minds first for cosmetics. Their product is not that great, but packaging is something that makes their products premium.As a country, as an industry, we need to work around this. We retailers are ready to give the boost to Indian manufacturers. We are equipped when it comes to raw materials, labour, processing etc. Only thing that we are missing is packaging solutions and there we need help.
Agreeing to Sunit, Prince also highlighted a point that Indians miss the consistency. Talking about his past experience, he said that he was getting hand wash manufactured in India. After a lot of struggle, in terms of putting the right packaging, look and feel. After cracking all of that, the other thing that I noticed was that we were not having the consistency. The nosil of the handwash suddenly from black became white in one batch and someone called me up and said sir abhi white wala aaya hai, lene ka ya nai lene ka? Why should that happen? These are very tricky things to do. Indian manufacturers have to be very mindful about the consistency.
Research work for a startup
When you are launching a new brand in a category, it takes a lot of research because you have to get an understanding on all the categories you work on, said Umair. Personal care is a massive category. It is one of the biggest categories that we have in the store and it ranges from shampoo, handwash, body lotion, perfume, deodorant etc. First you will have to make a five-year plan, which is what we did. Which categories to be targeted in the next five years and based on that we will do a competitive benchmarking on the kinds of brands which are available. For example – for deo, I will look at Fogg, Engage and Axe. For hand wash it will be Lifebuoy and Dettol. For body washes its Nivea. For soaps, its Dove and Pears. You have to amalgamate all of the information and then synthesize to understand how you will create one brand which will straddle through across all categories.
When you have to enter a category, the research remains similar, said Umair. We do qualitative and quantitative research especially in personal care products. I can tell someone to rate deo on a scale of 1 to 10. But I also need to get some pearls of wisdom subjectively in terms of what kind of fragrance he or she likes, in terms of the intensity – is the percentage too much or too little or just right. Some things can be quantified but some things have to be subjective. So, in most of the cases, we do a comprehensive as well as qualitative research. We have an internal sensory panel as well. Our quality teams are equipped to test the product. We ensure that the products are given to people who use the bench mark. For example – if I am fighting against Fogg or Engage, I will ensure that the customers who regularly use Fogg and Engage are the ones who test my product and ensure that the quality is at least the same if not better.
Umair further explains that they have a rich data space because they have their own retail stores. “We have a strong data on the kind of price points that the product sells, the promotions that are good, the kind of spacing that the product needs. So, research on the placement, the pricing and the promotion is also done comprehensively before we launch the product.”
Most of the retailers follow the same principles, said Sunit while agreeing to the points mentioned by Umair. Based on the scale and on the customer profile you can change a bit. We look at the Indian trends first, how modern trade is working, how GT is working, Neilsen data etc. We also draw some clues from the international market.
Giving an international perspective, Prince said that there are a lot of trend-setting things which happen in the west. Particularly, if you see across the European Union, they are doing quite a lot of cutting-edge trend setting things for the consumers at large. For example, one of the biggest trends is something that we call safe beauty or clean beauty, which means you will not have any harmful chemicals going in, there are no parabens etc in these kinds of products. Very interestingly, again within Europe, you will find that there are a lot of markets which have gone quite advanced to for example, if I talk about Germany, you go to any retailer which does personal care, you will not find any personal care product which has any of the harmful chemicals. It is completely green. Then if you go to Spain or Greece, you will find a mix of both. One of the major interesting things is that, if these things are happening in Europe, it’s just a matter of time that it comes to India. Should we take a leap now or should we wait while everyone else has done it and then we plunge into? That’s the constant thought that one needs to keep in mind. Out of my experience, one needs to be aware of what’s happening in the west and elsewhere in other developed markets which are known for credible products.
Since 2005, 80% of our business comes from the export and overseas market, said Harsh. In India, we have the capability, quality and standards. The new term PAH which is the new parameter in European countries has been taken care of in India. We have the capabilities to meet the requirements and standards of the European countries.
You will be surprised to know a lot of ingredients of these skin care products, which is a very sensitive thing in Europe, actually goes from India, asserts Prince. When I was in Denmark, I saw Indian machines in the factory in Denmark and when I was in Germany, I saw Indian machines there too. So, the trends are getting set there, the raw materials are going from here, the machines are going from here. All these mean that we have the capability. The question is how should we do it?
How should we do it?
Indians are still in the learning phase. We are trying to understand what is the usage, emphasizes Sunit. People are using Lifebuoy for bathing and as hand wash. The people who understand things like safe range, herbal range, green range, natural products, they are very less. They are not actually the customer for us. So, first of all, we need to educate the consumers that these are the products which keep you healthy, they help your skin, hair etc. In India, everyone wants value for money, they don’t want to pay anything premium. So here, the responsibility lies with us that we need to make that product affordable for them. Then they will start using it and they will understand the benefits of it. Once they understand the benefits, they will continue to buy it and then will also be ready to pay for it.