The detergent market in India is growing rapidly due to a surge in buying capacity of consumers. As per the data released by The India Watch, In the financial year 2023, India produced about 1.86 million tons of detergent. Companies such as HUL, P&G, Godrej Consumer Products, Nirma, and RSPL lead this phenomenon. It’s reported that these conglomerates capture 60% of the total detergent market, the rest is controlled by smaller local businesses.
On the basis of pricing, detergents are of three types:
- Premium products (such as Ariel and Surf)
- Mid-range options (including Rin, Henkel, and Tide)
- Budget-friendly choices (like Ghari, Nirma, Wheel, and local brands).
Furthermore, we can also segment the detergent market into detergent bars, hand detergents (both liquid and powder), and machine-based detergents according to their uses. When it comes to detergent consumption, the northern region stands first with 30% of the market share, followed closely by the western and southern regions, each contributing 25%.
Factors driving growth in Indian Detergent Market
Factors that drive the Indian detergent market include India’s large population, the surge in middle-income households, and a spike in buying capacity of middle and small-time customers. This growth can be seen in the rural areas also due to growth in the rural economy, the reach of the internet in rural areas, and the increasing popularity of FMCG products. According to some reports, consumers in rural households spend 3-5% of their monthly income on soaps, detergents, and similar items.
The pandemic also fueled the growth. As people became more aware of personal care and hygiene, it led to increased demand for detergents and other personal care products, soaps, lotions, and handwash. With the increasing number of hypermarkets, supermarkets, malls, grocery stores, and local community shops increasing, detergents have become easily accessible to consumers.
The growing popularity of e-commerce websites has also worked in favor as it considerably improved the accessibility and availability of detergents among Indian middle-class families. Brands are now offering products aligned with consumers’ evolving needs ranging from 200 gm sachets to 2 kg packs.
Detergents are now playing other roles as well beyond cleaning.They are now used for imparting fragrance, conditioning clothes, and softening fabrics. To capture the consumer base, Indian brands are pumping more investment in product promotion through digital advertisements, viral videos, free samples, and social media platforms.
The Growing Chemical Detergent Intermediate Market in India
The growth in the detergent industry is directly impacting the demand for chemical intermediates like caustic soda, soda ash, sulphonic acid, hydrated lime, zeolite, and more. In FY 22, India produced 780,000 tons of detergent chemical with a yearly growth rate of 5.97%. From FY 17 to 22, Indian detergent market has recorded a compound annual growth rate (CAGR) of 3.8%.
Even if domestic production has grown up, the Indian detergent market still relies on imports. The Indian import of chemical intermediates touched 273,000 metric tons In FY 22 with an annual growth rate of 3.7% from FY 17 to 22. It shows the need of developing indigenous manufacturing. The government has made several schemes for the sector including 100% foreign direct investment (FDI), special economic zones (SEZs), and production-linked incentives (PLI) to support the chemical industry.
How the India Watch can help with Detailed Project Feasibility Report (DPR)
India has great potential for the soap and detergent industry. Both the established and emerging brands are investing heavily to tap the opportunities the industry can offer. In case, you are planning a new business or an investor looking to enter this market, India Watch can offer you a project feasibility study that will provide a clear decision on whether to proceed or not and offer valuable insights on the market, growth drivers, demand, value chain, and more.
A well-prepared detailed project feasibility report can offer a wide range of actionable insights:
To conduct a comprehensive market analysis and develop a strategic growth plan, the following areas should be considered:
- Market Analysis: Assessment of the market’s size, growth statistics, future prospects, and category-wise market share.
- Consumer Analysis: Analyzing consumer behavior, including assessments of demand, trends, needs, wants, and the evolution of consumption patterns.
- Market Opportunity Scanning: Identifying potential opportunities within the market.
- Competitive Insights: Evaluating key players, their market share, product information, growth strategies, market positioning, pricing strategies, and promotion strategies.
- Retail Distribution and Pricing: Gathering information on distribution channels, pricing strategies, profit margins, and the balance between online and offline sales.
- Supply Chain and Vendors: Understanding the supply chain dynamics and identifying machinery and equipment vendors.
- Strategic Growth Plan: Developing a plan to capture a larger market share.
- Market Promotion Insights: Assessing effective promotion strategies, including online, offline, and public relations efforts.
- Human Resource Planning: Considering the necessary human resources for successful market entry and growth.
- Financial Analysis: Conducting a projected revenue analysis, profitability analysis, and ratio analysis to evaluate financial performance.