`Product innovation and unique offerings have helped us grow' -- Dr Rakesh Kumar Sinha, General Manager (Consumer Products Division), Godrej Soaps Ltd

Latha Venkatraman

Hair colour is the fastest-growing segment of the hair care industry. The Rs 250-crore Indian hair colour market is expanding at more than 25 per cent annually and Godrej Soaps, whose presence in the segment dates back several years, is the market leader.

Over the past couple of years, the market for hair dyes has been abuzz with activity with MNCs such as L'Oreal entering the fray. How is Godrej Soaps coping? ``Affordability, product innovation, and access, are factors that have helped us expand the segment. We would continue with these,'' says Dr Rakesh Kumar Sinha, General Manager (Consumer Products Division), Godrej Soaps Ltd in an interview with Business Line.

Excerpts from the interview:

Growth rates in hair care products such as shampoos and hair oils have been slowing down in the past year. What has been your experience with hair colour?

The high growth rate in the hair colour segment is partly because of the considerable promotional activity in the market. As we are the leaders in this market, we are consciously trying to expand the market. It is growing upwards of 25 per cent and we expect the growth rates to continue. As a market leader, it is our responsibility to ensure that the category grows.

Godrej has traditionally dominated the lower end of the hair colour market with liquid and powder dyes. Has the entry of MNCs such as Wella and L'Oreal at the higher end impacted your market share?

No. In the same period last year, you will see that our market share has grown. The new entrants such as L'Oreal have helped expand the market. We now have a presence in the upper end with our brand Godrej ColourSoft. Overall sales of ColourSoft are comparable to L'Oreal. As for Wella, the brand has always been smaller than us. L'Oreal is at the absolute top end of the market. However, the gap between L'Oreal and ColourSoft is narrowing.

With the advent of cream-based products, do you see consumers upgrading from powders and liquids to creams? If so, does Godrej plan to enter the cream segment of the hair dyes market?

Consumers do upgrade to better offerings, but not to other forms of products. If there is a superior product offering, there will be consumers at the top end. That is what has happened with L'Oreal Cream. Those of our consumers who want to shift upwards, are now shifting to ColourSoft, which is in liquid form.

Godrej has recently launched Kesh Kala, an oil-based dye. What is the current size of the brand?

Kesh Kala's market share has been rising every month since its launch. It has the potential to become a fairly large brand in our portfolio. We decided to launch this product because there were no players in this category. We have great hopes for this product.

You have launched ColourGloss shampoo, which targetted at people who colour their hair. Is this just an extension of your hair colour business or are there plans to enter other segments of the shampoo market?

This is an extension of our hair colour business. Through ColourGloss shampoo, we are targetting all those with coloured hair. Not only those who use hair dyes, but also those who use henna and other natural products.

Your hair oil brand Anoop does not appear to have seen much activity of late. Why is this? What are the future plans for the hair oils market?

Anoop is operating in a niche segment. The brand has some loyal customers who have experienced the benefits of this brand. There is no problem on distribution. The brand is widely available. For sales, this product relies mainly on word of mouth and positive user experience. Anoop is already well positioned, we do not want to tinker with it.

What is the current size of the hair colour market? What is the product's penetration level?

The hair colour market is currently Rs 250 crore, excluding the henna market, which is very large. Nobody has an idea of the size of the henna market. The branded hair colour market is just a small part of the entire market. Hair dye is used by just 20 per cent of the population. So we see potential for increasing penetration levels.

What are your strategies to pep up growth rates in this segment?

New offerings have helped us improve growth in this category. Our offering of powder hair dye in sachet form has exploded the category. Our offering of Kesh Kala, the oil-based dye, is again expanding the lower segment of the market. We would like to launch more such offerings to create awareness of this category. Product innovation, packaging, unique offerings, better availability and affordability are factors that have helped us to grow the segment. We will continue with these.

How much does the hair colour business contribute to Godrej Soaps revenues and profits?

I cannot share the profit figures. In terms of revenue, the hair colour business contributes about 20 per cent to the topline.

What are your plans for the hair care soaps -- Godrej Shikakai and Crowning Glory? Do you see potential there or has that category died out?

The category has not died out because there are a lot of consumers who do buy these brands. Shikakai is a big seller among people who want to use a natural product for their hair. Crowning Glory also has its own set of loyal customers. The growth rates in these brands may not be similar to what you can expect in other brands. But the current trend will continue.

Both the Shikakai and Crowning Glory offerings are unique and they deliver the goods to the consumer. We do not want to relaunch these products without better offerings at this juncture. We changed the formulation of Crowning Glory last year and consumer feedback suggests it is 80 per cent better now. These products are holding up against the shift to shampoos.