By Richa Naidu and Dhwani Pandya, Reuters

London/Mumbai,12 September 2024

For years, the world’s biggest condom maker Reckitt Benckiser designed products and marketing to lure Indian men to its Durex brand. Now, it is pushing a growth strategy by betting on women and rural consumers.

India last year surpassed China to become the world’s most populous nation, but still fares poorly on the use of contraceptives. India’s government estimates only around 10% of men use condoms and for women, sterilization remains the popular form of contraception.

Social stigma surrounding sex – which some say stems from Victorian social norms established during British colonization – has for decades marginalized female pleasure in the Indian society.

But attitudes are changing and Reckitt is shifting marketing gears to take advantage of an upswing in condom use among Indian women – now a key target audience for Durex.

Around 9.5% of married Indian women cited using condoms during sex by 2021, almost double the use five years earlier, according to latest available government statistics. Among unmarried women, such use more than doubled to 27%.

Reckitt is reformulating products such as lubricants aimed at attracting women consumers, and has new marketing campaigns, Pankaj Duhan, Reckitt’s senior vice president of intimate wellness, told Reuters in an interview.

The Durex lubricants in India will use improved formulations to appeal to women and have been created after performing clinical studies to address concerns females face — 30% of Indian women experience some discomfort when having sex with their partner.

“We want to change this … That is why we are relaunching our lubes portfolio,” said Duhan. “The women tend to become a little bit more underserved consumer groups.”

The India condoms market is currently dominated by Mankind Pharma, which makes Manforce, followed by Reckitt and TTK Healthcare.

CHALLENGES

The British consumer goods firm faces some stiff challenges in its quest to carve out a lucrative slice of the female condom market and rural consumers, primarily with distribution and pricing – two areas industry watchers believe are key to success – but also in coaxing a still-largely conservative rural population to buy its products.

Moreover, competitors are making a pitch to women too, with Durex’s main rival and market leader Manforce tweaking its marketing — a recent ad stars a Bollywood actress talking about benefits of condoms and asking women to “go buy your own.”

“One challenge Reckitt may face is consistency of messaging,” said Devangshu Dutta, head of retail consultancy Third Eyesight, adding the company needs to figure out if it is targeting condoms for health, family planning, or pleasure as there could be different messaging for each type of shopper.

The growth opportunity is compelling – India’s condom market size is merely worth $210 million, compared to China’s $4.1 billion, but is forecast to grow at 7.4% compound annual rate between 2024 and 2030, according to Indian consulting firm 6Wresearch. The global market is worth $11.3 billion.

Growing the market will take some doing though, not least because of India’s vast size and millions of mom-and-pop stores require a widespread distributor network.

Currently, only about 10-15% of Durex’s sales in India come from rural areas, which is far more price sensitive than urban cities.

“Distribution is the big challenge simply because even though most consumer goods companies have made their way to all pincodes in the country, the question is maintaining availability at retail points,” said Dutta of Third Eyesight.

CHIPPING AWAY AT TABOOS

Sex education in the conservative country is also lagging, and there is a vast gulf between awareness and actual use of contraceptives.

Matt Godfrey, executive vice president for Asia Pacific at Monks ad agency, part of S4Capital, said marketing tweaks by the likes of Durex are a welcome change but condom use and sex education need to improve in India.

“There are significant societal and cultural aspects that need to be rapidly shifted to reverse the status quo,” he said.

In the eastern state of Odisha, for example, a small medical store of Sudam Padhan does not prominently display condoms as “people frown upon them”.

In India, it’s men who mostly buy condoms, but some like Pooja, a marketer in Mumbai, are trying to drive change. She made an “awkward” decision to buy condoms herself for the first time this year, saying “when I’m asking for a condom over the counter I am basically putting my health first”.

Still, in a telling sign of the somewhat taboo nature of the topic, the 31-year-old declined to share her last name as she is unmarried and feared societal admonition.

“An open conversation encouraging safe and responsible sex in India has been steadily progressing but needs to be continually supported” by brands including Durex, S4Capital’s Godfrey said.

Like many of its rivals, Reckitt has over the years largely focussed on Indian men, with many ads featuring women wearing skimpy clothes.

Rival Manforce Condoms features former pornstar Sunny Leone in videos, some labelled “EXCLUSIVE UNCENSORED”. Duhan said many of the condom ads “objectified women.”

But that’s changing. Durex earlier this year launched a risqué “Explorers Wanted” lubricants campaign in India which featured sensual shots of nude male body parts.

PRICING PAINS

Pricing is another big challenge, especially in stores in smaller towns and villages which are reluctant to stock condoms and lubes. Duhan said products have to be “extremely cheap” to sell in some rural areas, where many use free government-provided condoms.

Padhan, from the medical store in Odisha, doesn’t stock Durex “because they are costly and there’s no demand for them in rural areas,” and says most sales are of Ustad “Deluxe Condoms” made by a state-run firm.

Ustaad costs just 10 rupees (11 U.S. cents) for a pack of six. A pack of 10 Durex condoms starts retailing at around 250 rupees, with some priced above $6, and a similar pack of Manforce starts at $1.

But the smaller three-condom Durex pack starts retailing around 99 rupees, and Reckitt believes they will sell better in rural India.

“We are starting at the top (and) planning to get down to the rural areas,” Duhan said. “It’s a massive undertaking”.

(Reported and Published by Reuters)

April has opened eventfully around the world, when it comes to food prices.

A leading Indian business daily opened the first week of April 2008 with a story saying that chain-stores may be as much as 15-40% cheaper than street vendors for staple vegetables and fruits. When we put this against the backdrop of concerns at skyrocketing global prices of rice and fuel, as consumers we may have a reason to thank the chains for helping to balance our monthly budgets.

But is this really a victory for proponents of organized retail, or a blow against retail chains?

The same article went on to state that chain stores were offsetting the hit they were taking on food by selling other products that offered them more margin, “an option not available to hawkers”, and also quoted leading Indian retailers.

The very same day, media in Hong Kong were covering a survey that stated that supermarket prices in the city were on average 12% higher than independent grocers, with some branded products being sold for as much as 20% higher. The Democratic Alliance for Betterment and Progress of Hong Kong, which carried out the survey, cautioned consumers that they should not be misled by supermarket ads for big discounts and advised them to compare prices frequently between chains and independent retailers.

(The study did not compare price differences now to what they might have been 20-25 years ago, when the market was not so consolidated. Such a study may provide some other interesting insights.)

During the same week, the government of Ivory Coast in Africa also responded to protests by women and youth in Abidjan against rising living costs with an emergency meeting and lower import duties on key food items.

Obviously inflation, especially in food prices, is a global concern right now, so this simultaneous appearance of news across countries is hardly a coincidence.

They, however, do raise concerns about how the chain of food supply and retail is structured, and also some important questions about competitive strategy.

Let’s deal with competitive strategy first. Obviously, the terms “loss leader” or “key value item” have been coined in the last few decades, but the strategy itself has been well-known and widely used since the time humans started trading thousands of years ago. 

The foundation of the strategy is built on items that are a staple, usually widely compared by consumers or used as a benchmark when comparing different merchants.  A merchant may place a very low margin on such a product, or sell it at cost (or even at a loss).

The concept is simple: attract a customer into the store with an irresistible offer, but make sure that consumer also buys other products that provide enough profit to the retailer. 

As a consumer you may feel outraged that someone is “cheating” you, but in our “sensible” and rationally-aware moments we as customers know that this happens frequently, and know how to avoid it. However, we are not always rational – if shopping were purely a rational exercise then automated comparative software would be fulfilling all our shopping needs by now.

Stepping beyond the retailer-consumer relationship, there is also question whether this can be classified as free or fair competition when cash-rich organizations with a wide basket of goods, take the strategy to the doorstep of the small individual trader whose product offering is much narrower and usually concentrated on the staple goods that are being discounted.

There is no really easy or quick answer to this question. 

On the one hand, large retailers such as Wal-Mart, Carrefour, Tesco, Metro and others, have been widely credited for achieving cost-efficiencies from scale, and then passing on these efficiencies to the consumer in the form of lower prices (and, apparently, higher standards of living).  That is a good thing and definitely of benefit to the population at large, especially in inflationary times such as these. Rather than keeping prices high due to inefficient sourcing, wasteful and expensive handling, and non-value-adding costs in the supply chain, it is surely a good to push for lower costs.

On the other hand, there is no simple way to draw a line when competitive benefit to the consumer becomes predatory pricing within the trade. 

If a retailer took price reduction as a “strategic investment” to grow a market (as happens in markets and product categories around the world), when do you start calling it “unfair”? And should you even attempt to label it unfair? What is the cost to the market, when it could eventually concentrate and consolidate market share in few hands? Is the cost to society more in supporting small inefficient retailers, or more if these retailers lose their independence and become employees? (If you’re looking to me for the answers…sorry, I don’t have them yet!)

Value judgements are almost always subjective rather than objective. ‘Large versus small’ conflicts are frequently emotive rather than rational. And even though there are no easy answers, I believe we should think about these questions, as businesspeople, as consumers and as social individuals.

There are some rather interesting (and by no means conclusive) studies, opinion papers and books that have looked at the structure and economics of the food supply chain, but constraints of space force me to postpone that aspect to another column. The questions and competitive strategy will not be disappearing quickly, so I’m sure these will still be relevant then. 

Meanwhile, I’m sure we have enough food for thought!