There is relief news for the general public in the festive season. In fact, the soap which is used by the people on daily basis will now be available cheaper because the country’s biggest FMCG company has decided to reduce the price of soap. Hindustan Unilever said it has decided to cut down the volumes of soaps, detergents and laundry items to take advantage of low commodity prices in India, increase volumes and compete with local players in the market.
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hence the low prices
Hindustan Unilever Limited (HUL), a major consumer goods (MFCG) company, has cut the prices of some brands of soap due to falling prices of raw materials. The maker of Lux soap and Surf Excel detergent also said the Indian market is witnessing a gradual recovery led by urban areas. But the rural market remains weak. Unilever CFO said he does not expect there will be deflation except in a few areas.
In such a situation, it will cut the prices of detergent and soap to take advantage of low prices, increase volumes and compete with local players in the market. Over the years, domestic brands have been snatching market share from major consumer products companies, especially in soaps, detergents, hair oils, tea and biscuits, Hindustan Unilever Chief Financial Officer Graeme Pitkethly told analysts during the third quarter earnings call. However, due to the subsequent inflation of key raw materials due to the pandemic, many people have been forced to either close shops or curtail operations.
impact of inflation
Last week, Unilever’s Indian subsidiary Hindustan Unilever said it was eyeing smaller and regional brands. Many of whom had left the market during the peak of inflation. For example, in the tea sector, smaller companies have grown 1.4 times faster than larger rivals, while regional producers of detergent bars expanded six times faster in the three months to August.
According to Graeme Pitkethly, their performance in India remains competitive with both price and volume being positive. HUL reported 3% volume growth during the quarter ended September. While it has been cutting prices for the last two quarters, the country’s largest consumer products company said it will be a difficult task to meet the demand after the existing inventory at the distributor level gets exhausted and lower priced products come in at retail prices.
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