No Wheels enough to catch up with Ghari; detergent maker maintains market share

MUMBAI: Nearly one in every four detergents sold in the country is Ghari as the Kanpur-based brand widened its gap with Hindustan Unilever’s Wheel, indicating its growing dominance at the mass end of the laundry market. The segment, that until five years ago had HUL dominating all sub-categories, is now demarcated with Ghari leading the popular segment, and HUL controlling a bulk of the premium and mid-market.

In fact, Ghari is now bigger than the next three popular brands — Wheel, Sunlight, and Nirma — all put together. Ghari’s share at 22% has remained unchanged in the past three years, but similar priced brands have seen an erosion over the period, according to officials quoting Nielsen data for September.

HUL’s Wheel and Sunlight lost 170 bps combined while Nirma’s share fell 30 bps. At an overall level, HUL is the leader of the Rs 17,000 crore laundry market with a 37.4% share and has gained nearly 200 bps, driven completely by its premium brand Surf that surged 420 bps to 14.8%. Over the same period, P&G that sells Tide and Ariel lost 350 bps to 15.7%. Nirma, that evicted Surf from the top slot three decades ago, saw its share reduce to just 3%.


Analysts said it reflects HUL’s success in the premium market even as it is slipping at the mass end. “The fact that none of the mass brands including Ghari are growing share indicates a strong premiumisation trend that HUL has been driving. As a result, Surf now controls a larger pie in the premium category while Ghari clearly dominates the mass-end even without gaining share,” said Abneesh Roy, senior vice president, institutional equities, Edelweiss Securities. “HUL has gained at the expense of P&G as the price differential between them has widened compared to five years ago.”

Tide had nearly 10% higher price tag compared to Rin. However, the gap has now increased to about 25% over the past two years as P&G followed a global mandate to focus on profitability and shed lower margins packs and brands. The laundry market has three sub-segments — premium that has brands such as Ariel and Surf, mid-market dominated by Rin and Tide and popular where Ghari, Wheel and Nirma operate.

A Nielsen spokesperson said it couldn’t verify or validate brand specific numbers, as these are confidential for clients. A P&G Spokesperson said: “It is essential to note that market data available may not provide the accurate picture on our laundry business. We have made strategic portfolio choices, which were expected to impact the top line in the short term, but should lead to balanced growth in the long-term.” HUL said it has strengthened its consumer franchise in the laundry category, and has grown across the portfolio. “We have been growing ahead of the market for the past three years and have outpaced it by 1.5 times in the last 12 months. We have a strong portfolio of brands that have all fared well,” said the spokesperson.

“As mentioned in our last quarter results, the laundry business sustained its strong performance of broad based double-digit growth. In the premium segment, we have strong brands and have pioneered innovations. And within the mass segment, we have grown ahead of the market by 1.2 times.”

In 2011, Ghari ousted Wheel to be the India’s largest home and personal care brand. RSPL, which was launched in 1987 by brothers Muralidhar and Bimal Kumar Gyanchandani, is now a Rs 5,000-crore company with Ghari alone contributing Rs 3,700 crore last fiscal. The company, widely celebrated by many as an example of small town entrepreneurial chutzpah, also sells other products including Venus soap, Xpert dishwash and Namaste Dairy brand.

Within the economy segment, both Ghari and Wheel are priced similar. “While our brand is positioned at the mass-level, it has better quality compared with some of the pricier rivals, a strategy that has remained unchanged. We have also added over three new states and manufacturing plants which added to the growth,” said Sushil Kumar Bajpai, president at RSPL.