Personal Hygiene Market: 'A Boon within a Curse'
By Kevin Reji Abraham & Shubham Meena
Every economic shock leaves a legacy. The deadly coronavirus will be no different.
The great depression spurred a “waste not want not” attitude that defined consumer patterns for decades. Hyperinflation in the Weimar Republic still haunts German policy. The Asia financial crisis left the region hoarding the world’s biggest collection of foreign exchange. More recently, the 2008 global financial crisis drove a wedge through mature democracies that still reverberates, with workers suffering measly pay gains in the decade since.
This time it’s a public health emergency that’s shaking up the world economy. In just a matter of weeks, people in affected areas have become accustomed to wearing masks, stocking up on essentials, canceling social and business gatherings, scrapping travel plans and working from home. Even countries with relatively few cases are taking many of those precautions.
As John Wesley once said, “Cleanliness is next to godliness”. This quote has to be taken more seriously now than ever when the world is at the clutches of the omnipresent, omnipotent and omniscient pandemic to which a cure is yet to be certified.
(Source- WHO/ UNICEF)
(Source- WHO/ UNICEF)
In India, revenues in the personal hygiene industry have spurted from approximately 77,340 million INR in 2017 to 185,200 million INR in 2020 which is roughly 2.5 times that of 2017. Moreover, user penetration has also been increasing at a linear rate with 356m users in 2020, i.e., 25.8% of the population, nearly double that of 2017 with 190m users and projected to increase rapidly in the future due to the outbreak.
COVID-19, being a worldwide pandemic with no provable vaccine, relies on the motto of ‘Prevention is better than cure’. The most recommended advice includes washing one’s hands, use greater than 50% alcohol-infused hand sanitizer, frequently wash and clean high common touch areas, and so on. Certainly, a virus that has infected more than 2 million people across the world will make the citizens much more cautious about their personal and surrounding hygiene, now and much after. The drastic impacts of COVID-19 will forever be etched in the minds of the people who have survived through it.
In the present scenario, personal hygiene industry developments are more prominent than ever, with the novel coronavirus pandemic taking hold of the world. While social distancing and self-quarantines have been recommended as ideal measures to flatten the growth curve of the COVID-19 spread, experts hail good personal hygiene and sanitation practices as the first defense against not just this virus, but potentially any future breakouts as well. In the supermarkets, people began to stock up hoards of personal hygiene products even when the virus was in its primal stages. This shows that humans are mere creatures who have the basic reflex instinct to survive, to get through with whatever means it takes, be it at the cost of something or somebody.
During the SARS outbreak, in 2002-04, laundry sanitizers saw a 90 percent CAGR in retail sales value in China. Such a drastic increase in demand can be expected in this scenario, too, according to Euromonitor.
The sales of face masks, sanitizers and gloves have soared in India. Hand wash has grown by 199% since the outbreak as compared to last year in India, hand sanitizers by 1228% and floor cleaner by 69% as per the latest study by Nielsen. The sales of face masks and similar protective products have grown in the range of 400-500% in India, according to Euromonitor.
IPA pricing graph for Europe between April 2019 to March 2020 (Source- ICIS)
Hand Sanitizer is a liquid or gel generally used to decrease infectious agents on the hands. It contains alcohol as an active ingredient along with the amount of water, glycerin and fragrance. While the consumption of Alcohol as the cure for corona remains a myth, the use of alcohol in sanitizers can play a major role in eliminating most of the bacteria, fungi and some of the viruses.
Hand Sanitizers, unlike soaps, can be carried from one place to another. However, at home, soap is the best solution. Water alone may rinse off dirt, but viruses and bacteria are so small they often need chemical and mechanical intervention to get their sticky nanoparticles out of the crevices that make up our unique fingerprints. That’s why soap is so important, while alcohol can also break an oily membrane, washing with soap has the added benefit of physically removing even tougher to break viruses and bacteria from the skin. Consumption of soap has grown by 200% or 3 times as compared to last year in India.
Due to their effectiveness in maintaining personal hygiene, Indians have got Consumer health and hygiene firm Reckitt Benckiser Group (RB), known for its Dettol brand, ramping up production to meet a sudden surge in demand of its soap, liquid soap and hand sanitizer after the coronavirus outbreak, with other companies following the trend. Consumers and retailers across the country were faced with the shortage and non-availability of hand sanitizer and soaps since COVID-19.
The major reason behind the shortage is unprecedented demand. Companies normally have 15-20% of their production in the form of inventory investment. However, the spurt in demand was so high that companies would have needed to keep at least 35-40% to meet the growing needs of the people. Companies have significantly scaled up production capacity of soap, liquid soap and hand sanitizer.
Currently, the market for soaps is valued at 19,000 Crore INR while Hand wash and hand sanitizer markets at 1,000 and 150 Crores respectively, in India.
EXPECTED CHANGES IN THE PERSONAL HYGIENE INDUSTRY POST COVID-19
The Indian personal hygiene industry is set to witness a considerable surge in the forthcoming years, given the critical role of good personal habits and personal care during these turbulent times, and the subsequent rise in product demand. There is a positive correlation between health and personal hygiene. Maintaining proper hygiene keeps bacteria and viruses at bay, shielding the body from disease and illness.
As demand increases, the price of commodities in this industry will begin to rise. Consequently, increased healthcare expenditure must be dealt with by increasing the disposable income of the consumers. To truly provide coverage to the 1.35 billion Indians and make personal hygiene a way of life, we need to support the awareness with affordability. For instance, if we look at the Indian soap market which is worth billions of dollars, the best-sellers are the products priced in the Rs 5-10 bracket. Similarly, we need to create other hygiene products which billions of financially constrained people can also afford and remain safe from various microbial diseases.
Another innovation that must be accounted for is the increase in the use of online pharmacies which has added on to the availability and accessibility of personal hygiene products which will facilitate growth in the future.
The biggest change will be noticed in the Hand Sanitizer market which had seen a tenfold jump in demand over the past month. Rising awareness about hygiene and wellness due to the increasing prevalence of bacterial and viral diseases will accelerate hand sanitizer market growth even post COVID-19. Various initiatives by the Indian Government and WHO have resulted in increasing awareness about hand hygiene thereby creating demand for hygiene-related products. Additionally, government initiatives to promote hygiene care to avoid the occurrence of pandemic diseases will boost hand sanitizer market growth in the coming years.
It is expected to see a shift in consumer habits and preferences impacted by the coronavirus pandemic with a greater focus on health, hygiene and protection. There would be a greater role by online sales channels, which will emerge stronger post the ongoing health crisis as people would tend to avoid stores. Companies in this industry would have to implement new online sales channels and have to shift their focus towards e-business. They have to be more aggressive on their e-commerce platforms.
The only factors that may slow down this industry a bit are the lack of awareness on sanitary napkins in rural areas. The country taking extra time to categorize sanitary napkins as an essential goods shows a fallacy on the government’s part. Secondly, some hand sanitizers have a few disturbing side effects such as cough as well as eye infections.
Just as how the previous decade became more conscious of diseases such as cholesterol, diabetes and high blood pressure, COVID-19 has made the current decade more conscious about self and surrounding hygiene. Just as how the previous decade saw the rise in gym memberships and organic consumption, COVID-19 has made the current decade more cautious in their distribution of spending. Hotels, restaurants, marketplaces, industrial areas and many other spaces with a potential of the gathering of a number of people will have to make more concentrated efforts towards hygiene standards and there will be a surge in health inspections and other measures by the government in the post-COVID-19 era to ensure that global standards are maintained. Due to this, there will be an increasing demand for various hygiene products across different industries. There will be a rise in personal hygiene expenditure to avoid a pandemic of such a large scale ever again.
There is great scope for the personal hygiene industry. Significant growth in this industry can be forecasted at least until the next decade. COVID-19 has ensured better health practices and social protocol. The products related to personal hygiene will be commonplace and will be found in all places including our homes, in restaurants, workplaces, etc. in the post-COVID-19 era. While the IMF predicts that the Indian Economy would only grow 1.9% for this annum, the current growth and predicted growth in the personal hygiene industry is much higher. Even in the predictions made before the coronavirus outbreak occurred the market for intimate care products had increased to almost US $3 billion and was projected to further grow to 5.3 billion by 2025. The projections are being revised and indicate more rapid growth than projected before the outbreak. It is fair to say that the personal care industry is the silver lining to the economy’s dark cloud or 'a boon within a curse'.