Mumbai, Oct. 8: Nirma today clinched an industry-defining agreement to sell Procter & Gamble’s (P&G) Camay soaps in India, marking the first formidable challenge to market leader Hindustan Lever’s pre-eminence.
The Ahmedabad-based detergent major, which had shaken up the market with its value-for-money pricing over the past decade, will put Camay on shop-shelves in a month. The premium toilet soap segment is in the grip of Lever’s products like Lux International, Pears and Dove.
Announcing the alliance at a press conference held here today, Nirma Consumer Care chairman and managing director Hiren K. Patel said: “Camay is the jewel in the crown.” Analysts said Camay marks a large shift in the product profile of Nirma, which has so far been identified with products in the popular segment.
A coup of sorts lies in the fact that Karsanbhai Patel’s Nirma will peddle Camay at Rs 13, taking the edge off Lever’s premium soap brands — Lux International for instance (75 gms) — that cost at least Rs 2 more. Other premium products like Pears (Rs 19.50 for 100 gms) and Dove (Rs 35) are priced several notches above.
Asked if selling the Camay so cheap would undermine its premium positioning, Patel said: “It reaffirms our value-for-money commitment to Indian customers.”
P&G will monitor the quality and packaging of Camay, which is one of the most important and oldest brands — it has been around since 1926 — in its portfolio. Nirma’s licensing pact for an undisclosed royalty with Procter & Gamble Home Products will enable it to manufacture and market the premium soap in India.
Camay, with a strong recall value in the Indian market, will get the benefit of Nirma’s strong distribution network. That would help it gain a big presence in the premium soap segment, Patel said. A turnover-based royalty would be paid to P&G under an agreement that allows Nirma to use fragrances suitable for the Indian market in the Camay brand.
The soap market was caught in a slowdown in the last financial year, and with conditions unlikely to improve this year, many hope new brands will work up the lather.
Talking about the strategy to split its agreement into a unique five-year rolling licensing arrangement, P&G director Shantanu Khosla said the move will help the FMCG major to retain focus on health care, hair care and fabric washing. Beyond these areas, he said P&G would be looking at licensing arrangements for its other brands.