COVID-19 impact: Germ-protection market gets crowded, but it’s not all about minting money

The germ-protection soap market is getting crowded. Tata Consumer recently joined the market. Major brands like ITC, Reckitt Benckiser, and Hindustan Unilever are already present there. In fact, ITC is planning more launches.

Is this just a mad rush to grab market share or is there more to it? Moneycontrol spoke to a few brand analysts and experts to find out.

Some brand experts do see business sense in it. In the current germ-protection-obsessed market, it makes immense sense to market soaps in any avatar, promising hygiene and germ protection.

“Most FMCG companies have expanded their range during COVID. Anybody who had a chance to move in to areas anti-bacterial or germ has launched it,” said N Chandramouli, CEO of TRA Research, a consumer analytics and brand insights company.

Figures support the argument. The Indian soap market, which was worth $2.9 billion in FY20, is estimated to cross $4.4 billion by FY26 due to the increasing focus on maintaining proper hygiene and rising disposable incomes.

Pavan Padaki, a brand consultant and coach, presented a different angle.

“It’s not just about making money. From a brand point of view, it is important to stay relevant to the current customer base and needs. Companies have to ensure that their customers don’t look at other brands to solve new needs. This is required to fence both its loyal and potential customers,” he said.

From a business point of view, brands are adding another potential hot-seller to existing categories, which are well-established with robust distribution chain and channels to gain immediate and profitable ROIs (Return on Investment),” added Padaki.

In fact, some analysts see a different potential here. The current market potential for hygiene products is an opportunity for replacing low-ROI brands with market-relevant products, they believe.

No wonder, even existing players are adding more products in the segment.

Up for launch next is ITC’s neem and glycerine soaps. It is expected to hit the stores in a month. ITC is already present in the premium soap category and sells under the brand -- Fiama Di Wills and Vivel.

In between, in mid-July, Tata Consumer joined the bandwagon. The company launched its germ-protection soap brand Skye in three variants -- anti-bacterial, menthol, and jojoba oil.

Dabur, an existing player, followed up by adding the Sanitize soap brand to its collection. Emami has already launched a Boroplus soap.

ITC (Savlon), Reckitt Benckiser (Dettol), and Hindustan Unilever (Lifebuoy) are the major existing brands.

None of the companies are willing to talk as they are observing what is called a silent period ahead of the announcement of quarterly results. The Q2 results of these firms are due in a few weeks.

Although there is no data to verify how the soap category has fared during COVID-19 times, in the last interaction, after HUL’s Q1 results, Chairman and Managing Director Sanjiv Mehta had told Moneycontrol that Lifebuoy products are the hot-sellers for the company.

According to Research and Markets, an online platform that provides market and research data from publishers, consultants, and analysts, the soap manufacturing industry is one of the biggest in the FMCG space in India, accounting for more than 50 percent of the consumer goods sector.

Due to increasing awareness about hygiene standards, around 50 percent soaps are sold in the rural market.

A study by WHO shows that just by washing hands properly with soap and water helps cut down stomach-related illnesses by 50 percent and respiratory infections by 16 percent.

In a blog on Unilever website, Sayandip Mukherjee, a virologist and Senior Research Scientist at Unilever R&D, Bengaluru, explains: “Some germs have an outer protective covering made up of two layers of fatty molecules. Soaps can help to break apart this outer protective layer, trapping and removing these germs along with any other oils and debris that are present in our hands. Now, for a soap to do all this, remember we must wash our hands for at least 20 seconds.”