The personal care industry: A survey of the industry and related companies; SBI Funds Management Limited

Abstract

The personal care industry has seen a boom after the recent excise and customs duty cuts granted to it by the government. After a brief recession between 1989-92 the industry has recovered and has good growth prospects. The industry consists of the following segments: personal hygiene products, cosmetics and toiletries and miscellaneous products. With the changes in the Indian lifestyle, the demand for personal care products is on the rise. The increase in per capita income, the increasing literacy, and the growing urbanization are the factors which are likely to help the industry. The factors which are critical to success in the industry are: marketing strategies and distribution network, brand equity, modern technology, efficient production and products with some unique selling proposition. Raw material costs are roughly half the total costs of the industry. Raw materials like caustic soda, soda ash and linear alkyl benzene have shown a rising trend in the recent past. The availability of the raw materials causes no problems for the industry. With the changing lifestyle stimulating demand and the excise duty cuts being given to the industry, the growth prospects for the industry look encouraging. Most companies in this industry are established and mature companies which are good for long term investments. The increasing competition is likely to drive the smaller companies out of the market.