Procter & Gamble India on Tuesday kicked off a price war in the washing powder market by pricing its products lower than rival Hindustan Lever.
The company's Tide and Ariel's 20 gram satchets has been slashed by half at Re 1, while Ariel saw a one-third reduction at Rs 2, down from the previous price of Rs 3.
HLL Surf Excel is currently priced at Rs 3 for a 20-gram sachet, while Surf is available at Rs 2. HLL executives declined to comment on the possibility of a price war being triggered by this move.
The company is looking at a 40 per cent jump in its market share as a result of these price cuts, P&G's executive director Ashok Chhabra told Business Standard.
However, the price cut is only for the sachets and does not apply to Tide and Ariel's 200 grams, 500 grams, 1 kg, 1.5 kg and 2 kg packs.
"Improving the price-value proposition on our sachets will give many more consumers the opportunity to use Ariel and Tide not just for their good clothes, but all clothes," said Shantanu Khosla, country manager, P&G, India.
Speaking about the effect of the price cut on the company's margins, Ashok Chhabra, executive director, P&G said, "We are looking at providing our consumers with the same quality at a lower cost through cost saving measures incorporated in our sourcing, manufacturing and logistics."
P&G's market share in the domestic detergent market is 10 per cent with Tide holding 4 per cent, and Ariel at 6 per cent.
Meanwhile, at the company's launch in Ahmedabad, Dheeraj Vashista, P&G's district sales manager (Gujarat) said, "By this offering, we believe that many more people can now experience the quality of the world's best detergents."
