Dettol - Where are you?

The recent spat involving FMCG giant, Reckitt Benckiser, and Modern Retail's heavyweights like Big Bazaar has caused consumers much inconvenience.

If you’ve searched for your favorite Dettol liquid handwash soap recently and ended up not getting the one at a Big Bazaar outlet near you, blame it on Reckitt Benckiser, the Anglo-Dutch FMCG giant, owner of such popular brands as Dettol, Harpic and Airwick among others, whose stubbornness has made sure that modern retailers like Big Bazaar, Reliance Fresh and More stores from AV Birla Retail have either run out of the stocks or are not placing fresh orders for any of its products. Last month, headlines in pink dailies screamed that Kishore Biyani-owned Big Bazaar stores have threatened to boycott products from Reckitt Benckiser as the latter allegedly trimmed retailer’s margins without taking them into confidence. Terming the move an arbitrary one on part of the manufacture, even other outlets had said to follow the suit. And the slugfest between the two parties has resulted into frustration for the consumers who use the brand.

Cashing on the face-off probably, or it might just be a coincidence, Hindustan Unilver has been aggressively promoting its brands like Lifebuoy liquid handwash and Domex at these modern retail outlets some of whom are also aggressively pushing their private labels in these categories as alternatives to RB’s products. For instance, Future Group is promoting its in-store labels like Clean Mate, while More stores are offering Germex as an inexpensive alternative to Dettol. Ditto with Reliance Fresh, which too is stepping up the effort to improve visibility of its personal healthcare private label brand Endurf, thereby confirming the growing significance of India’s modern ratailers, and more importantly, the rising penetration and popularity of private labels.

Though private labels at present contribute less than 10% of overall sales of modern retailers, in general, they are nonetheless expected to pose serious challenge to manufacturers’ brands in the foreseeable future. In developed markets of the US and Europe, modern retail accounts for over two-thirds of overall sales of consumer products while in Asian markets like China their share is about a third. Given the fast-paced growth of modern retail in India it won’t be surprising that the country would soon be able to catch up with at least its neighbors in Asia, which means manufacturers might not be able to continue enjoying their present clout over modern retailers for long. In fact, even in the present scenario, they (manufacturers) risk letting consumers shift loyalty in favor private labels of retailers (which are also planning to make their private labels available at local kirana shops as well), which could do much damage to their brands and have far-reaching impact.

However, at the same time, modern retailers also face the risk of annoying consumers who might not settle for anything other than a manufacturer brand. So, it’s not that by boycotting national brands retailers could have the last laugh as far as gaining consumer loyalty is concerned. Also, though in the past too, there had been instances of spat between retailers and manufacturers (Big Bazaar’s face-off with Kellogg’s and Frito Lay), this time it is different with the emergence of other alternatives like herbal and ayurvedic products in segments like cosmetics, personal care such as soaps, creams and shampoos which are available at only exclusive shops also pose, if not that big, challenge to both the manufacturers’ as well as retailers’ brands.

Given that, finding a middle ground, that too quickly, is just what experts would prescribe and is the need of the hour. After all, ‘consumer is king.’ 

Amy, Chief Editor.

You can reach the author at chiefeditor@addonviews.com

Tags: Dettol, Health care, Soaps, Skin care, FMCG, Kellogs, Frito Lay,  Hindustan Unilver, Lifebuoy, Domex, Reckitt Benckiser, Big Bazaar.