Going premium in times of a slowdown in a saturated category like soap seems to have worked for ITC. The company made a relatively late entry into the soaps category in 2008, but it is the premium soaps portfolio which is growing faster than the mass offerings in its personal care portfolio.
Sandeep Kaul, Chief Executive, Personal Care Products, ITC, said, “Today, our premium brand of Fiama Di Wills gel bars is the fastest growing brand in portfolio while mass brands such as Vivel and Superia continue to be the largest selling. Our belief is that there has to be design and product development during times of a slowdown backed by the right technology.” Scientists at ITC’s innovation centre have been working towards creating products which are different from the regular offerings in penetrated categories like soaps. Considering the slowdown in GDP growth has hit the FMCG category as well, premium brands seem to have benefited more than the mass offerings in ITC’s portfolio.
“Slow GDP growth has affected the FMCG industry. However, it has been the best year for Fiama Di Wills gel bathing bars. Getting bath gel in the form of soap bar has worked and this has been a clear differentiator in the almost 100-year-old soaps category,” added Kaul.
Industry observers also say that the premium end of the FMCG category has been relatively less impacted. Vikas Daga , Partner McKinsey & Company, said, “While for most premium brands there is scope for growth, in the case of ITC, it is about having a differentiated value proposition which has worked for them in competitive categories like soaps.”
Moreover, for most premium brands the gap between spends and earnings is not that much, making it a better proposition during times of a slowdown when spends on any brand are being slashed.
Targeted advertising by ITC has helped its brands. “We believe in having dialogue with the consumers instead of having one way marketing with them. In such cases it is dialogue through the digital media and social media which has helped us in creating brands,” he said.
“ITC is planning a quantum jump in volumes and image of its soaps portfolio. It is catering to the aspirations of Indian consumer. Despite being present just a couple of years in the FMCG business, it is giving stiff competition of some of the big FMCG players,” said Jagdeep Kapoor, MD, Samsika Marketing Consultants.