FMCG giants bite price bullet to keep small companies off their turfs
Hindustan Unilever, Marico and Britannia said the impact of smaller regional brands which have been eroding their market shares in the past year has either moderated or halted after India's leading fast-moving consumer goods companies cut product prices to pass on benefits of lower production costs to consumers.
«What we have seen of late is that while people (local brands) spread their wings, they started to feel the pressure in newer markets. And we have seen these shares stabilise of late,» said Varun Berry, Britannia's executive vice-chairman on an earnings call recently.
According to market researcher Kantar, which analysed 13 categories across personal care, home care, and food and beverages, local companies operating in a single market grew their market shares nearly 13% in the year ended April 2023 compared to a 9% expansion of national brands in the same period. However, regional brands operating in more than two markets saw market shares drop by 2%, while that of unbranded firms fell 5%.
For several years, homegrown brands have been chipping away market shares from top FMCG firms, especially in soap, detergent, hair oil, tea and biscuits. For instance, there are about 2,500 local competitors in the rusk market, while nearly 40% of the snacking segment is controlled by more than 3,000 smaller or regional players.
However, pandemic-led disruptions and ensuing inflation in key raw materials forced many to either shut shop or prune operations. But, in the past few quarters, falling commodity prices fuelled
