Hygiene products lose steam

In a consumer survey from September 2020, Mintel had found that 47% of consumers believed that the use of hand sanitisers will decline once the pandemic subsides. 

The hygiene products market in India is losing momentum somewhat as consumer spending on products such as hand sanitisers is on the wane. This is in sharp contrast to last year, when products like hand sanitisers and face masks were in high demand, and brands across sectors forayed into these segments as supplies ran short.

As per industry estimates, the hand sanitiser market, which was valued at Rs 100 crore in February 2020, grew rapidly to reach Rs 1,000 crore by the end of 2020. In May 2020, the mask market in India was valued at Rs 10,000-12,000 crore. In July last year, Kantar estimated that nearly 350 new sanitiser brands entered the market. Brands like Fabindia, Spykar, Jockey and Wildcraft launched their own range of masks/ respirators in 2020. Most of these brands have now, however, scaled down their presence in these categories.

The slowdown

Dabur entered the hand sanitiser and vegetable wash categories in 2020. By December 2020, the brand decided to rationalise production of these products. The company’s CEO Mohit Malhotra said in the Q3FY21 earnings call that revenue from the hygiene segment was down to Rs 2-3 crore in Q3FY21, as compared to Rs 50-60 crore in Q1FY21.

Similarly, Marico, which introduced a fruit and vegetable wash in the wake of the pandemic is “de-focussing” from the hygiene category. Biscuit and confectionery manufacturer Parle Products, which forayed into hand sanitisers last year, has reduced the volume of sanitisers it makes. Now, it mainly manufactures large packs for institutional sales.

“From the end of 2020 until March 2021, there was a drop in the sale of sanitisers as people got complacent,” says Manish Chowdhary, co-founder, WOW Skin Science. The company introduced hand sanitisers last year.

Deep Bajaj, founder, Sirona Hygiene, says his company has observed a 70% decline in the demand for masks. “We have exited the fabric mask category, and are focussing on FFP2 and N95 face masks,” he says.

Spykar, too, is not manufacturing fresh fabric masks, informs its CEO, Sanjay Vakharia.

Heightened awareness about the virus and how it spreads has dealt a blow to some product categories. “People now know that the virus is airborne, and that surface transmission is low. As a result, surface sprays and vegetable washes have lost relevance,” says Bajaj.

Profitability has been hit because of the entry of new players. “Because of the commoditisation of the category, demand has been disaggregated,” says Gaurav Dublish, co-founder, Wildcraft India. The company is selling masks at a 33% discount on its website to compete with unbranded fabric masks that cost less than Rs 50 per piece.

Changing preferences

Rajat Wahi, partner, Deloitte India, says that the ongoing second wave is driving up sales of masks, especially since health regulators are now advocating double-masking. Companies in the hygiene products business, too, are seeing a small surge in demand for sanitisers and soaps, but Wahi says, “Consumers will fall back into their earlier routines once the current wave washes over us.”

In a consumer survey from September 2020, Mintel had found that 47% of consumers believed that the use of hand sanitisers will decline once the pandemic subsides. Further, 56% consumers agreed that cleaning surfaces regularly won’t be necessary when the pandemic is under control.

Nidhi Sinha, head – content, Mintel India, says that the health supplement category continues to benefit. “Consumers are looking for quick and easy immunity boosting supplements. Products like turmeric-milk mixes, kadha mixes and chyawanprash are seeing increased demand,” she says. The healthcare vertical of Dabur, for instance, contributed 39% to the company’s revenue in FY21 (Rs 2,647 crore), up from 33.9% in 2019. As per ICICI Securities, Dabur’s Chyawanprash clocked in 150% y-o-y growth in Q4 FY21.

Fully vaccinated people, Wahi says, are likely to ditch their fabric masks in the long term and opt for disposable masks instead when necessary.

Which is, perhaps, why Hemant Sapra, co-founder and president, Karam Industries, is rallying manufacturers of FFP2 masks to reduce their prices of masks to Rs 40-50 per piece. “Currently, only 5-10% of the market is held by N95 and FFP2 mask manufacturers,” he informs. Sapra’s long-term plan is to launch boxes of 50-100 surgical and FFP2 masks.

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