Condoms in India
In the wake of government’s decision to bring condoms under essential drug and cap its price last year, the male contraceptive industry has clocked negative growth this year.
Until November 13, when the government brought condoms among the list of essential medicines and fixed the ceiling price, the Indian contraceptive industry was going at a healthy double digit growth.
As per the mandate of Drug Pricing Control Order (DPCO), the condom price has gone up from 6.56 a piece to 8.35 per piece now. But that is way below the valued added condoms like ribbed, dotted and other flavoured condoms which are sold for anywhere between Rs. 30 to Rs. 60 per piece.
The concept of Condoms in India has undergone a sea change. Condoms were initially seen as contraceptive. But now, condoms are heavily promoted as pleasure enhancers. And the target market too has changed. From merely addressing couples to use condoms for family planning, condom promotions are now targeted at youth crowd pushing them to habituate to condom usage to enjoy safe and pleasurable sex.
But the price capping has seriously impacted the industry as condom promoters are not able to innovate and bring new products.
From approximately 15% year on year growth, the industry has reported negative growth in the financial year ending March 2015. The industry reported negative on value growth, volume and unit growth. Manforce, the new delhi based condom and sexual wellness brand, which holds almost 30% market share in India, has reported reduced growth, if not negative growth, which is a clear indicator that price capping has telling effect on the condom business in India.
Experts say that price capping on luxury variants gave very little room for condom manufacturers to spend on advertising and promotion, and this impacted the bottom lines hardly. Industry is also finding it difficult to introduce new products and innovations as achieving profitability is hard to come by with very little margin.
Manforce leads the Indian condom market with about 30% share followed by Kamasutra Condoms (18%). Kohinoor and Moods stands in the second rung with 13% and 12% market share respectively.
The price capping has affected all brands across the country uniformly and this doesn’t gave way for cheap variants to achieve record sales. This signifies that number of condom users has not come down, but the price capping allowed customers to try many variants across brands.
Even luxury condom brand Durex a brand owned by Reckitt Benckiser Group has reported negative growth as many of its products come in the premium range. ReckittBenckiser has reportedly filed a case challenging government’s decision to bring condoms under essential drug.
The company has essentially argued that pleasure condoms are not to be confused with essential drug as it is a premium range which is meant only for those who can afford. While the matter is subjudice and early to predict the outcome, the point to be noted that the price capping has seriously affected the growth of the condom industry and condom manufacturers are finding the going tough.