New entrants crowd hand sanitizer market
Parle Products has been quietly pushing its hand sanitizer brand under its flagship name, Parle, for a few months. The firm is an unusual player in the hygiene market. However, it isn’t the only such firm to have launched a sanitizer during the pandemic.
Companies from paints to apparel and lifestyle majors, brewers, distillers, and fragrance makers have made an entry, even though frontline entities like FMCG, pharmaceutical, and healthcare majors were the first to seize the opportunity.
Mayank Shah, senior category head, Parle Products, said the launch of the hand sanitizer was part of the company’s backward integration exercise.
“We are into food production and as part of this we process sugar. Ethyl alcohol or ethanol, which is used in hand sanitizers, is a by-product of this process. Since ethanol was available to us and we saw a clear need for hygiene products triggered by the pandemic, it made sense to foray into this category,” Shah said.
Industry players estimate that the domestic hand sanitizer market, which stood at ~60 crore before the pandemic, has grown five times to touch ~300 crore.
At least 300 launches by organised and unorganised players have happened in the
past few months, say experts, forcing the government to rein in makers of spurious products, introduce price control and quality checks.
K Ramakrishnan, MD (South Asia), Kantar Worldpanel, says he continues to see strong demand for these products.
“I don’t see a significant drop in
demand for hand sanitizers at least for the next one year as the need to remain safe and maintain hygiene standards continue both at home and outside,” he says.
FMCG majors say that rationalisation is inevitable. “The market cannot sustain so many players,” says Sunil Kataria, CEO (India and SAARC), Godrej Consumer
Products (GCPL), which markets the Protekt brand of hand sanitizers.
“There is already a fair degree of rationalisation happening in India. And this trend will continue over the next few months,” he says.
This is endorsed by Mohit Malhotra, CEO of Dabur India, who says margins have been falling sharply in the category. “There is such a glut that margins have come down for most players. We’ve cut back on production in keeping with market realities. My own assessment is that the category will evolve as hygiene habits undergo a change,” he says.
Already, the emphasis on hand washing is growing versus hand sanitisation, say experts and FMCG company executives. “At home, for instance, the preference for hand washing is far greater than hand sanitisation,” says Sumit Malhotra, director, Bajaj Consumer, which launched a hand sanitizer under its Nomarks brand.
Kataria concurs, adding that hand washing has taken a big leap in terms of adoption over the last few months. “Hand sanitizers now are mostly consumed when travelling or when on the go,” he says.
Shah admits that while consolidation is inevitable in the domestic market, some second-rung players will nevertheless continue to be there. “We are here for the long term,” he says.