While HUL officials did not comment on any issue related to their growth, Lalit
Thakkar, Director Research, Angel Broking elaborated on the concerns thus, “A slowdo
wn in domestic demand consumption emanating from overall economic slowdown, higher raw material prices (like vegetable oils, LAB, wheat etc.), extreme monsoon conditions & stronger competition resulting into market share losses remain the key long term risks...” Business uncertainties are actually proving to be mood dampeners for the entire sector, as the BSE FMCG Index, which closed at 1973.16 points in July 2007 (w.r.t 2025.69 points in August 2006). And the company understandably would want this cut in its advertising & promotional expenditure as a one off affair, as competition seems to be gaining an edge that spells bad tidings. According to CMIE, Kwality Walls had a market share of 19%, whereas Amul had a market share of 17% in 2006. But in 2007 Amul has conquered the market with 37% market share and sent HUL reeling to a market share of 9%. Similarly, in beverages, the trigger happy Tata Tea has garnered volume share of 19.2% in June 2007 in sales of packet tea, whereas erstwhile leader HUL, only recorded 18.6%. And to top it all, even P&G is beating HUL in toothbrushes (Oral B over Pepsodent) and detergents (Tide over Rin Advanced) as per AC Nielsen data.
For Complete IIPM Article, Click on IIPM Article
Thakkar, Director Research, Angel Broking elaborated on the concerns thus, “A slowdo
wn in domestic demand consumption emanating from overall economic slowdown, higher raw material prices (like vegetable oils, LAB, wheat etc.), extreme monsoon conditions & stronger competition resulting into market share losses remain the key long term risks...” Business uncertainties are actually proving to be mood dampeners for the entire sector, as the BSE FMCG Index, which closed at 1973.16 points in July 2007 (w.r.t 2025.69 points in August 2006). And the company understandably would want this cut in its advertising & promotional expenditure as a one off affair, as competition seems to be gaining an edge that spells bad tidings. According to CMIE, Kwality Walls had a market share of 19%, whereas Amul had a market share of 17% in 2006. But in 2007 Amul has conquered the market with 37% market share and sent HUL reeling to a market share of 9%. Similarly, in beverages, the trigger happy Tata Tea has garnered volume share of 19.2% in June 2007 in sales of packet tea, whereas erstwhile leader HUL, only recorded 18.6%. And to top it all, even P&G is beating HUL in toothbrushes (Oral B over Pepsodent) and detergents (Tide over Rin Advanced) as per AC Nielsen data.For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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