Catch them young, watch them grow' is the latest mantra at the FMCG major Hindustan Lever Ltd. For the first time, the soap-to- foods company is foraying into personal care products exclusively for kids, sold only through its Hindustan Lever Network -- the direct selling business arm of the company.
In a parallel development, Lever Network has slashed the price of Lever Home detergents from Rs 95 (500 kg) to Rs 65. This will keep the price war in the detergents segment alive.
It has, however, not cut the prices of Aviance shampoo as the product proposition is different from that of other shampoo brands available on the retail shelves.
Under the Little Animalz brand, it has launched shampoo, bubble bath and body lotion. It expects the brand to contribute around 20 per cent of its turnover.
HLL is exploring the possibility of entering this segment through the retail channel in the future. On the retail front, Wipro, Johnson & Johnson and VVF has products targeted at babies and kids.
Says KK Rajesh, business head, Hindustan Lever Network: "This completes the portfolio of products targeted all segments of consumers -- Aviance for women, Denim Xclusive for men and now Little Animalz for kids."
India ranks third in terms of kids influencing parents' spending (43 per cent). The US stands at the top of the list, followed by Japan. Products targeting kids in India is estimated to be around Rs 5,000 crore (Rs billion). Personal care products forms 6 per cent of this market.
At present, the FMCG major through its multi-level marketing network sells Aviance personal care products, Lever Home fabric care and dish washing liquid, Mentadent oral care, Denim Xclusive personal care products, Ayush health care range and Indus Valley basmati rice and ready-to-cook meals. The Aviance brand is the largest contributor to the division.
The direct selling business industry is estimated to be Rs 2, 300 crore (Rs billion) and is growing at 22 per cent per annum. This segment is growing faster as compared with the retail segment, said Rajesh. According to AC Nielsen ORG Marg retail audit, the FMCG sector (retail) grew by a meagre 1 per cent in 2003.
Hindustan Lever Network consultant base has trebled from 75,000 in January 2003 to 275,000 today and has an active base of 75,000 consultants.
The Lever network has established over 240 service centres nation wide. To broaden its network base, the company is now tapping its wide shareholder base and offering them a special scheme.