Fakes rule the roost in rural India
Sunita Kumar, a factory worker’s wife in the Indian village of Hazratpur, has added talcum powder and face cream to her little make-up box for weddings and festivals. She doesn’t know they are fake.
Sitting cross-legged on the rough cement floor of her home, head covered by a red and green sari, Kumar said she’s illiterate. She can’t read the label on her tube of Fairy Love lotion, an imitation of a popular brand called Fair & Lovely from Unilever (ULVR)’s Indian subsidiary.
The village of Hazratpur, where open drains flow near poorly paved roads and informal retailers sell under trees, is a symbol of rural India, where high illiteracy allows imitations to siphon sales from companies such as Unilever and its Indian competitor Emami Ltd. About a third of India’s villagers can’t read even though rising incomes are expected to boost rural consumer goods sales tenfold to $100 billion by 2025.
“It’s a huge loss to the companies in the sense that they spend so much of money building these brands,” said Saroj Kumar Mohanta, a partner at MART, a consulting firm in New Delhi. As rural shoppers spend more, companies like Hindustan Unilever (HUVR), the Indian subsidiary of the London- and Rotterdam-based company, are marketing more facewash, conditioners and lipstick in villages. Low familiarity with brand names are allowing fakes to get in the way.
Between 10 per cent to 30 per cent of the cosmetics, toiletries and packaged food products sold in India are fake, the FICCI estimates said. Meanwhile, imitation products “impact revenue of genuine companies,” Hindustan Unilever said in an e-mailed statement.
Post new comment