The Hindu Business Line : The <I>tels</I> of tomorrow

WHEN the market for a category such as hair oil, which is in constant use because of the Indian tradition of oiling hair, stops growing, it is time to sit up and take notice. Of late, most branded hair oil players have sensed a certain shift in usage and have moved away from marketing their pure coconut oils to lighter oils, which offer certain value-added propositions.

While the entry of Dabur's Vatika heralded the first success of a value-added hair oil brand, more FMCG companies have jumped into the fray, of late, trying to offer hair oils in new "value-added" combinations, with or without a coconut base, to cater to the changing needs of its consumers.

Although pure coconut oil dominates the Rs 1,000-crore branded hair oil segment, the shift towards using "do good" oils has been on the rise. Claims D. Shivakumar, Business Head, Personal Products, Hindustan Lever Ltd (HLL), "There is a shift towards value-added oils, with a demand for lighter ones with sensory properties."

With coconut prices on the rise, branded players, including the market leader in the segment (Marico's Parachute), have moved towards offering lighter oils with natural ingredients.

Early this year, HLL revamped its Nihar franchise, which has fragrance-led variants such as Rose, Jasmine and Hibiscus, by including the methi (fenugreek) component to its oils. Nihar Naturals today claims to have better "sensorials" and is functionally superior, as methi has a strong "do good" association to hair.

Likewise, Marico has reduced its dependence on its basic Parachute coconut oil and moved to lighter variants like Parachute Jasmine, which, according to the company, has been a success, registering a turnover of Rs 23 crore. Marico also took the trouble to relaunch its Rs 25-crore Hair & Care brand of non-sticky oil, with a proposition to provide protection from sun, pollution and dirt.

Including natural ingredients such as camphor and neem, Marico is currently focussing on cooling oils, by stretching the franchise of its Shanti Amla oil into a cooling oil under Shanti Thanda Tel, an initiative taken after Dabur jumped into the fray with its cooling oil brand, Himsagar.

Observes Jagdeep Kapoor, Managing Director, Samsika Marketing Consultants, "When a commodity like coconut oil gets well branded, it is natural for consumers to move to a different level with a higher perceived value which has a do good, feel good and look good factor to it."

Even a relatively smaller player, Bajaj Consumer Care, has decided not to focus on its older brand of Bajaj pure coconut oil. Claims Hemant Mishra, Vice-President (Sales & Marketing), Bajaj Consumer Care Ltd, "We have decided to stay away from promoting our coconut oil brand. Today, the market is growing towards value-added oils and people want to use non-sticky and cooling oils."

Adds Shivakumar, "Consumers want something more than coconut oil to take complete care of their hair and have stopped deriving any cosmetic benefit from the product anymore." HLL decided to blend its coconut oil with amla, which has the ingredient to restore the natural blackness of hair, and bring out a value-added proposition to its Nihar brand in 2001. At present, Dabur leads in the value-added hair oil segment with a share of 30 per cent, with players such as HLL trying to replicate its success in the hair oil market. "Today, HLL's hair oil strategy has to do with creating more value with its oils," states Shivakumar.

While coconut oil usage may see a decline, the emergence of amla oil is being perceived as a better value proposition by the branded players. Says Shivakumar, "Amla hair oil continues to be a popular segment in the hair oil market. It is known to be a do-good ingredient for hair and users expect cosmetic benefits." Major brands such as Dabur Amla, Bajaj Brahmi Amla and Shanti Amla continue to register volumes for their respective companies in spite of the segment stagnating.

"Today the players are getting volumes but not profit and this is because they are not adding value to their products," observes Shivakumar. Fighting on price to get volumes is not expected to help the category, which cannot grow unless there is a value proposition attached to the brands. Analysts attribute that frequent price drops by players like Marico for its Parachute brand have hampered the growth of the category which has already been feeling the heat from the unbranded players.

While the value-added route is being explored frantically by most FMCG companies, a reality check shows that hair oiling as a habit has also taken a backseat for most urban consumers who have graduated to products like gels and shampoos.

Explains Mishra: "Today, the younger generation does not want to oil their hair. It is not an exciting proposition for the youth and unless companies actually offer something different and exciting, hair oil as a category will continue to stagnate."

Meanwhile, in spite of the de-growth in the category, certain segments such as cooling oils seem to be growing faster than the rest. According to Arvind Mediratta, Head of Marketing, Nature Care Division, Marico Industries, "The cooling oil segment is growing the fastest at 16 per cent, a rate which is even more than the growth of shampoos."

Companies have also been beefing up their ad budgets to make their hair oils more visible. While HLL has always been a big spender, a smaller player like Bajaj Consumer Care has set aside Rs 12 crore for its flagship Brahmi Amla using the song Ghanana-Ghanana from the film Lagaan to communicate the benefit of faster and thicker hair through its agency Leo Burnett.

Meanwhile, as the hair oil segment continues to stagnate for both coconut and value-added oils, it's time for the FMCG players in the business to make the category look more attractive. As Kapoor says, "The players have to find more locations and occasions for its consumers to use the product and actually make an attempt to make the category look more contemporary."

Picture by Shaju John

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