Ten Rupees Store

We are launching cheaper packs to attract new consumers as a slowdown hurts demand. Indian consumers need little convincing to embrace products at cheaper price points; after all, good things come in small packages.

The nation’s largest household goods makers are introducing cheaper packs— ₹10 is the popular choice—of products ranging from soaps to chocolates to attract new consumers as an economic slowdown in Asia’s third-largest economy depresses demand.

Over the past few quarters, Other brands all released products in ₹10 price packs. Lower prices are expected to help companies reach newer consumers, especially as they expand their reach in rural markets. Moreover, with exposure to the internet, even rural shoppers are aspiring to buy premium products, albeit at an affordable price, said top executives at consumer product companies.

“The ₹10 price point is required because we have to increase consumption. For doing that, we have to increase penetration," said Mohit Malhotra, chief executive of Dabur India Ltd. “So, if you look—whether they are economy brands or premium brands, they are all reaching out at that price point."

To be sure, India is a large value market, which means that biscuit packets priced as low as ₹2 and one-time shampoo sachets priced at ₹1, as well as chips and chocolates at ₹5 and ₹10 draw big numbers for companies. This is especially true for categories such as salty snacks, chocolates and biscuits.

However, companies said that over the last two-three years, the ₹10 price point has been growing at a faster clip. “Small packs and sachets are an important part of our portfolio," “Such packs allow us to reach first-time users more effectively, introducing our offerings to them. They are particularly useful to drive market development of nascent categories. Apart from this, small packs and sachets allow us to make available quality and aspirational products at affordable prices to consumers." In the biscuits category, for instance, ₹5 and ₹10 price packs constitute over 60% of the overall market.

Parle Products Pvt. Ltd has seen contribution of ₹10 packs to sales jump from less than 15% a few years ago to almost 25% now as it introduces trial packs for some of its premium cookies across rural and urban markets. The ₹10 pack, said Mayank Shah, category head at Parle Products, has been growing at a faster rate over the past two-three years, though ₹5 packs lead sales for the company.

“Ideally, it makes sense to gradually move the consumer to a price point, which would be convenient for you to cater to as well as affordable for consumers, and ₹10 fits in very well there," “The ₹10 pack is growing quite fast for us, in both urban and rural; of course led by urban," “It is a more sustainable price point from a manufacturing standpoint, and overall consumer affordability is increasing; it is also partly driven by the fact that a lot of innovations are coming at ₹10."

For wholesale retailer, the ₹10 price pack has seen a 150% jump in sales on an annual basis in May. “The ₹10 is a very attractive price point, which allows for easy distribution and penetration into the market.