Relaunch of Campa drinks triggers price war in India
INDIA – Reliance Consumer Products Limited’s (RCPL) relaunch of the iconic beverage brand, Campa, which has over 50 years of heritage, back to the Indian market has sparked price war.
Some of India’s leading distributors are protesting against price wars between FMCG companies, which they said will severely hurt their margins, as soft drinks companies push consumer promotions in states where Reliance Consumer Products has launched Campa Cola at prices lower than all national brands.
RCPL, the FMCG arm of Reliance Retail Ventures, relaunched Campa in cola, lemon, and orange variants in Andhra Pradesh and Telangana. With the launch, analysts predict the lower-priced drink brand will steal market share from Coca-Cola and PepsiCo.
A Coca-Cola spokesperson said the company has broadly kept the same prices since last year for all its entry packs.
Having new players in the market presents a great opportunity for investments to develop the market further and bring innovations to evolve the category and ultimately benefit the consumers, Coca-Cola noted.
Dhairyashil Patil, president of All India Consumer Products Distributors Federation (AICPDF), which represents 4 lakh distributors, said: “This competition between large companies with lower consumer prices and promotions directly hurts the margins of lakhs of distributors. We fear the price wars can escalate to other FMCG categories like biscuits and confectionery where Reliance is foraying into…all this will hurt margins of distributors severely.”
“The price war has begun. The AICPDF is closely watching the developments as distributors will be at a loss… will write to all the companies on this unethical competition.”
Patil said the entity is “escalating the matter” to the government and the Competition Commission of India (CCI).
Data and analytics company GlobalData revealed that leveraging penetration pricing, high marketing expenditure, and Reliance Consumer’s broad retail distribution network were all poised to bring Campa at par with the carbonate brands of multinational operators, Coca-Cola and PepsiCo.
According to its market analysts, Coca-Cola and PepsiCo currently dominate the US$18 billion Indian carbonates market.
GlobalData India business development manager Francis Gabriel Godad revealed that the Reliance Consumer also announced plans to launch an intensive marketing campaign at the Indian Premier League (IPL) 2023, a popular domestic cricket tournament with a viewership of over 200 million.
This is a powerful marketing strategy given that endorsements by celebrities or organizations are an essential feature that 29% of Indians actively look for when purchasing products, according to GlobalData’s 2022 survey.
Godad stated: “Campa’s brand nostalgic value among Gen X and the Millennial cohorts will also aid it in making a comeback. Similarly, as homegrown brands both Reliance and Campa can capitalize on the localism trend, which favors domestic brands. Reliance can also leverage its own offline retail and e-commerce stores to quickly narrow the gap with Coca-Cola and PepsiCo’s nationwide distribution networks and bolster Campa’s market penetration. In terms of pricing, the Reliance Consumer can go toe-to-toe with multinational operators.”
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