ITC Ltd has emerged the second largest player in the domestic deodorant market within a year of entering the business, overtaking deep-entrenched rival brands like Axe and Old Spice in the conglomerate's first major success in the personal-care space.
The sweet smell of success for ITC with the Engage range highlights the trend of newer entrants gaining share in the Rs 2,300 crore Indian deodorant market by breaking away from the clutter of "man attracts women" communication theme.
ITC's Engage recorded an 8.1% volume share in May across India's urban markets that account for 90% of the overall deodorant space, show data compiled by market tracker Nielsen India. Market leader Vini Cosmetics' Fogg held 12.5%, while Hindustan Unilever's Axe and little known McNROE Consumer Products' Wildstone were at the joint third spot with a 6.9% share each.
By value, Fogg is way ahead, having 17.8% of the market. Wildstone had 6.7% and Engage 6.6%, followed by Axe with a 6.5% share. In markets like Kolkata, Kanpur and Kochi, Engage was the largest by both value and volume in May.
Engage is the fastest growing deodorant brand in the market, said ITC's chief executive for personal-care business Sandeep Kaul. He refused to comment on the market share.
"We have been able to break the clutter as far as advertisements for deodorant is concerned," said Kaul. "Most brands portray deodorant as a male phenomenon. Instead, Engage has focused on engagement and playful chemistry between two partners who are equals, thereby lending credence to its positioning as a deodorant for couples."
The company covered almost 75% of the market within four months of the launch. ITC's divisional chief executive (FMCG trade marketing and distribution), Sanjiv Puri, said it managed this by leveraging its nationwide distribution infrastructure.
According to Nielsen, there are more than 500 deodorant brands in India trying to woo the consumer. "Deodorant is also finding acceptance in the rural markets which today accounts for 10% of the overall size and growing at 29%," said Executive Director Vijay Udasi. He declined to confirm company-wise market share data.
The deodorant market is growing at 17-18% year-over-year for the past three years. While male deodorants contribute 69% to total sales, women's categories are driving the market with faster growth. Deodorant is the largest category in the male grooming space.
The number of sub-brands and variants is 986 as of April 2014, with more than 100 new launches or re-launches over the past year, Nielsen's reports show.
For instance, ITC itself initially launched six variants of Engage and the range has been scaled up to 14 variants in less than a year. The company plans to roll out seven-eight variants every year, Kaul said. Emami, which last month forayed into the segment, has six variants in the market.
The deodorant pecking order changed when Fogg overtook Axe as the market leader last October, with the former promising more per bottle in its communication. Emami and Park Avenue too have stayed away from the stereotypical campaign.
A Hindustan Unilever spokesperson said the Indian deodorant market is in its growth phase with the current level of low consumption offering big potential. "We are focussed on building the deodorant market by driving penetration for Axe as well as building usage of deos as a daily habit," he said.
Future Group CEO (Food Bazaar) Devendra Chawla said the deodorant category is witnessing the maximum churn in pecking order. The market had almost become commoditised with little price variation among brands, he said. But it is "getting back pricing power due to differentiated launches by Wild Stone, Engage and Fogg".
Emami Director Harsha V Agarwal said consumers have been shifting brand loyalty in this category with a multitude of me-too brands. "Differentiated brands are able to win in this market," he said, adding that the company is aiming to be among the top five in two years.
Chawla said another new fragrance category - body spray - is emerging in the market at affordable prices and can eat into the fast growth of deodorants.
ITC's Kaul said his company is looking at extending Engage to other areas in the fragrance category. He, however, is keeping his cards close to his chest.