THE SOAPBOX DERBY TIGHTENS UP

JOSEPHINE J. BOW

BOMBAY, India (FNS) -- Leading soap and detergent suppliers are jockeying with a local brand for position as the market here continues to grow in size and popularity.

Traditionally, Hindustan Lever, a subsidiary of the British detergent maker Lever Bros., has dominated India's soap and detergent categories. Lever posted worldwide earnings of more than $800 million in 1993.

Nirma, a brand developed by local chemist Karsanbhai Patel, has been a strong competitor in this market-share battle and Procter & Gamble, the U.S. consumer products giant based in Cincinnati, Ohio, is the newcomer to the fray.

The battles among the major suppliers took on greater dimension in the early 1990s as a result of heavy advertising, which has since slowed slightly. Still, soaps and detergents are among India's most heavily advertised categories.

Until the early 1970s, only four soap brands were sold in India, led by Lever's Surf. Surf's high price, however, meant the

product was reserved for the country's wealthy. Despite surveys showing a tremendous potential for lower-priced washing powders, it took the upstart chemist Patel to shake things up.

Lacking his competitors' automated plants -- Lever manufactures at 31 plants scattered throughout the country -- Patel's improved Nirma brand was mixed and packed by hand when it was launched in the mid-1970s. It sold for 40% of the price of the admittedly better-quality premium brands.

By 1980, four years later, Nirma's sales equaled and then surpassed Surf. Nirma's annual output currently exceeds 200,000 tons, compared with Surf's estimated 50,000 tons.

Lever retaliated by launching the "value for money" product Sunlight, followed by the even lower-cost Wheel detergent. Patel then introduced Nirmabath, a challenge to Lever's Lifebuoy soap, which currently holds 40% of the mass toilet-soap sector.

Enter Procter & Gamble with its high-priced Ariel detergent in 1992. In the ensuing all-out war, which was played out on the nation's television screens, both Procter and Lever proclaimed their superiority.

Indian consumers, however, have proven to be a fickle group, jumping from one product to another with every new launch.

"Indian consumers aren't so brand-loyal," said Ritika Bhargava of New Delhi's Nanz Supermarket. "Every time Hindustan Lever introduces a new product, the previous one becomes redundant."

Whatever the case, product differentiation is the latest rage. Surf Ultra is for top-loading machines while low-foam Revel Plus is suitable for front loaders. Lever has just launched a liquid handwash and antibacterial soap, the first in its category, and Dove beauty soap at a whopping 30 rupees (about $1) for a 4-ounce bar. By comparison, Lifebuoy, a carbolic soap targeting manual laborers, sells for 16 cents per 6-ounce bar.

Lever spends a healthy 5% of total expenses, or about $30 million a year, on advertising, working with international advertising group Lintas. "We try to develop a memorable communication," said Group Marketing Adviser Siddhartha Sen. "As for Procter & Gamble, we're in serious competition but we're good friends."

In an India still dominated by chains of wholesale distributors who work sometimes on margins of under 1%, Lever boasts the country's largest rural sales network. Headquarters in Bombay is already computer-linked to 40% of the total population, with 70% of every village with more than 1,000 people targeted for 1995. Sales information is currently culled from handwritten reports filed by 2,300 self-employed wholesale stockists.

Lever led the rural market blitz of the 1980s, introducing video vans, doubling as mobile retail outlets, which showed clips of Indian films interspersed with advertisements. Rural sales -- more than 600 million of India's 900 million live in villages -- were growing at 15% annually, or twice as fast as urban.

But recent reports show the rural boomlet has leveled off, with urban growth for 1993 surpassing rural 19% to 12%. For one thing, the novelty has faded, since many companies employ similar promotional techniques. Secondly, villagers complain that most of the products and their ad campaigns are geared to urban populations and also ignore dialect variations between India's many language groups.

Back in Bombay, Lever's directors are hungrily eyeing the growing middle-class sector and the ready-to-explode washing machine market. "There are still only 3 million washing machines in India, of which only about 40% are automatic," said a Lever washing machine specialist.

Front-runner Videocon sells fully automatic, top-loading machines for about $500 while other more recent alliances include TVS-Whirlpool, BPL-Sanyo and Onida-Hitachi. German Bosch has recently entered the front-loading fray where current prices range from $625 to $775.

G.E., Rowenta and Thompson of the United Kingdom all are scheduled to set up shop either on their own or in joint ventures.

"There's tremendous potential in this market," said the Lever specialist. "First, there are more and more households with two working adults. Secondly, in the big cities, most servants in middle-class households work several jobs and don't have time to do the wash. Finally, dhobis -- India's traditional washing men -- are a dying breed."