Thursday, April 04, 2013

The Best a man can get?

When P&G bought Gillette for $57 billion in 2005, it earned Criticisms galore. Six years later, The Brand has already added $32 billion to P&G’s kitty. If Gillette’s India Market Performance improves fast, the coffers will only swell further. And there are signs of that happening.

The electric shaver and the safety razor have cut deep into the American and European markets but many Indians still strop their own razors or visit a barber for a shave. In fact, as per a CII official, over 50% of India’s 600 million males shave outside their homes in salons. Naturally, for Gillette, the world’s top razor-blade maker, India is a highly attractive market with a vast potential. Indian men on an average shave only 2.5 times a week, far lower than, say, Koreans and Japanese. But cracking this market, especially the mass segment, is not proving to be easy for Gillette. Years of conventional marketing and advertising have won it a premium brand image, but Gillette lags behind rivals in India because consumers can’t afford to buy its flagship products. So while it dominates the Rs.10 billion blades and razors category at the top-end of the market, family-owned Indian companies such as the Houses of Malhotra and Vidyut dominate the mass market.

Gillette India’s revenue of Rs.8.52 billion for FY2009-10 (July ‘09 to June ‘10) looks healthy given that it contributes to 19.4% of its parent Procter and Gamble’s India business (which amounts to Rs.44 billion). But Gillette’s India glory-tale is chicken-feed when compared to the brand’s global revenue of roughly $8 billion! Understood that the brand globally contributes to a much lower 10.13% of the total sales of P&G, but the fact that India contributes just 2.37% of Gillette’s total revenue invites nothing less than shame for a 28 year-old brand. Across the world, Gillette accounts for about 70% of the razors and blades sales, but in India, it has failed to live up to its spectacular global performance. And even though it is currently the market leader in the five billion-units-a-year razors and blades market in India with roughly 40% share, its performance here pales in significance to its global dominance. Just 10% of Indian men who shave use Gillette blades, compared with about 50% worldwide.

Gillette’s personal care products – shaving systems and cartridges, razor blades, toiletries, and shaving brushes – represent what the company is all about in India. The category accounts for a little over Rs.6 billion in sales – 70.42% of all that the company rustled up sales-wise during its last accounting fiscal (ended June 2010). Next in the pecking order is oral care, comprising toothbrushes and other oral care products. This division brought in sales of Rs.2.2 billion or 25.82% of all sales. Then there is the portable power products division, made up of battery sales, which rang in 3.76% of its sales.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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