The female condom holds immense business potential in a country that consumes 1.8 billion condoms a year—male and female combined. Rising global consumption could be the icing on the cake
Even as Pope Benedict spoke against the use of condoms on his recent trip to Africa, it does not stop The Global Female Condom Initiative, run by the United Nations Population Fund (UNFPA), from moving in the opposite direction. Thanks to operations in 23 countries, in 2008, for the third consecutive year, access to female condoms rose dramatically, with the distribution of over 33 million pieces to beneficiaries across the world. Ever since the United States Food and Drug Administration gave its nod for the marketing and distribution of this innovative piece of contraceptive in 1993, with significant backing from international health organizations, female condoms have redefined women’s empowerment. Local initiatives such as the one by the UNFPA are further spreading awareness among women. But still, there is a long way to go before female condoms match the market size of their male counterparts.
What is a female condom?
It is a 17 centimeter long rubber sheath that has flexible rings at both ends. When initially launched, these condoms were made of polyurethane. However, the newer versions are made of nitrile, another form of rubber, and are cheaper, stronger, smoother, thinner and more reliable than a male condom that is made of latex rubber. The shelf life of a female condom is five years, while that of a male condom is only three. The female condom also costs more than the male one. Two brands of the former are available in India—Confidom and Velvet. Confidom is priced at Rs 250 for two pieces. Velvet is available at Rs 100 for three. Both are manufactured by HLL Lifecare (formerly Hindustan Latex), a Government of India enterprise.
 |
Growth drivers
One of the biggest growth drivers for the female condoms' business is the prevention of AIDS and sexually-transmitted diseases. India is sitting on a virtual time-bomb of the AIDS pandemic, being home to 2.5 million AIDS patients, with over a third aged between 14 and 24. Among other activities, the government’s National Aids Control Organization (NACO) stresses the use of female condoms as a prevention tool. Its Female Condom Scale Up Program is now targeting sex workers in Tamil Nadu, Andhra Pradesh, Maharashtra and West Bengal. Other states are also on its radar. NACO is working with state-level NGOs to get female condoms distributed at subsidized rates of around Rs 3.50 per piece against its cost of around Rs 40 per piece.
Empowering women in urban, and to some extent rural, areas is also a big factor in promoting the use of female condoms. According to the UNFPA, “It is the only available method that women and girls can initiate, and in some ways control, that protects against both unwanted pregnancy and sexually-transmitted infections. In this regard it is an important supplement to the male condom. Because of economic, social and gender inequalities, women are often ill-placed to make their partners use condoms, particularly within marriage.”
| Growth Drivers |
| - Women’s empowerment |
| - Population control efforts |
| - AIDS awareness |
| - Aggressive government initiatives |
| - Efforts by NGOs |
The potential for female condoms can be gauged by the buoyant sales of the Velvet brand of HLL Lifecare, the country’s largest condom producer. “Velvet as a brand was launched only in Delhi almost a year back. Within the first six months of its launch, the brand roped in sales worth Rs 22 lakh,” says a company source who requested anonymity. “Currently, around 7,000 to 8,000 packets of Velvet are sold in a month in Delhi. And 1,500 to 2,000 packs of Confidom [another of HLL Lifecare’s brand] are sold in a month.”
“This kind of demand is not even from 1.5 to 2% of the female population of Delhi. This shows the tremendous potential of the product in the metro city alone,” he stresses, pointing to the big business opportunity that exists in this sector.
The market
While HLL Lifecare is already making inroads into the female condom market, other big players in the male condom business seem to be shying away from entering. This is not because they do not see this as a huge opportunity area, but primarily because of the risk on return on investment involved. Some of the players DARE spoke to do have plans to enter this segment sooner or later. “Cost of manufacturing a female condom is relatively higher than a male condom. We would surely enter this space in the coming future. As of now, it involves a huge risk,” says a source in Mankind Pharma, a Delhi-based male condom manufacturer. The company supplies its own brand of male condoms in northern India.
| Opportunity Areas |
| - Manufacturing |
| - Exports |
| - Distribution and retailing |
| - Installation and maintenance of vending machines |
“I believe once the market picks up further, private players would also enter it in a big way. It requires huge money, risks and a clear vision to enter the space of female condoms,” says the HLL Lifecare source. Through NGOs, HLL Lifecare works in six states—Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra, Gujarat and West Bengal—to distribute female condoms.
The business
Manufacturing is an area worth exploring given that HLL Lifecare is currently the only player in the female condom segment in India. It has a technology sharing agreement with the US-based Female Health Company (FHC). The model of contract manufacturing that exists in the male condom business could also be replicated for female condoms. If a company ties up with NACO to meet its demand, the sales figures would be significant. At present, NACO procures around 1.5 million female condoms and distributes them at the subsidized price of Rs 3.50 each. The government is aggressively supporting the female condoms initiative.
| Big Players in the Condom Market |
| Company: HLL Lifecare (Moods, Confidom, Velvet) Production capacity: 1.3 billion condoms annually with 10 million female condoms Exports to: Over 70 countries |
| Company: JK Ansell (Kamasutra) Production capacity: 250 million (male) condoms annually Exports to: Over 50 countries |
| Company: TTK-LIG (Kohinoor, Durex) Exports to: Over 40 countries |
“The annual consumption of condoms, including male as well as female condoms, in India alone is around 1.8 billion pieces,” says Pritpal Marjara, Team Leader, Technical Support Group, Condom Promotion, NACO. Out of 1.8 billion condoms, 620 to 640 million pieces are distributed at subsidized rates. He says that the annual consumption of condoms is expected to jump to 3.5 billion by 2012.
The export market for condoms is huge, given that a host of initiatives are being run in the African continent, one of the worst sufferers of AIDS. The Middle East too is a big market for exports. Distribution and retail opportunities also make female condoms a lucrative business to look at, thanks to the growing awareness of the product.
| Entry Barriers |
| - High investment |
| - Competition from big players |
| - Less popularity of female condoms vis-à-vis male condoms |
| - Limited distribution network |
| - Brand creation |
Challenges
One of the challenges is the more intricate process of manufacturing female condoms as compared to male ones. “A female condom is a very niche product. It also requires some technical advancements over manufacturing of male condoms,” says Marjara.
Lack of awareness among women is one of the reasons why female condoms have seen less acceptance so far. Also, rural women are still largely ignorant about their use. It is up to the condom manufacturing companies to unleash a targeted marketing campaign for these condoms. It could help them rev up sales of the product. HLL Lifecare is educating women about the usefulness of female condoms. The company is planning to organize some training sessions for the staff of select retail outlets where female condoms are sold. Installation of vending machines is also planned at BPOs etc.
Subscribe to this comment's feed
written by maninder garg, March 24, 2010
written by Rashmi Priya, July 01, 2009
| < Prev | Next > |
|---|
Hope visiting this page will grab your trust, all anyone really wants is a trustworthy supplier who they can count on to deliver on quickly, correctly, and top quality every time!