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Product Profile: Hand Sanitizers

HS CODE: Multiple eight digits tariff lines under 3401 and 3402 (34013090, 34022090, 34029099 for India)
• Hand sanitizer market size was estimated to be US$ 2.6 billion in 2019 and is projected to cross US$ 4 billion by 2025, growing at a CAGR of 9.1%.
• A sudden surge in demand is observed since the past couple of weeks as Covid-19 cases have shot up in the US, Italy, UK France, Germany, Spain, and South Asian countries including India.
• One expected fact to observe is that increase of hand sanitizer demand as of February 2020 in the UK was over 250% and over 1,600% in Italy, on Y-o-Y basis, while the M-o-M increase in the US from December 2019 to January 2020 was over 1,300%.
• India’s exports of hand sanitizers are continuously rising from the past five years at a CAGR of 9.8%. From US$ 26.1 million in 2014, India’s exports escalated to US$ 38.03 million in 2018.

The demand for sanitizers has been perpetually burgeoning for the past two and half months since the outbreak of the COVID 19 in Wuhan (China), but a sudden surge in demand was observed since past couple of weeks as the cases have shot up in the US, Italy, UK France, Germany, Spain, and South Asian countries including India other countries. As the virus has begun to spread ubiquitously across the globe, people have started panic-buy hand sanitizers as a preventive measure in an erratic manner.

The hand sanitizer market size was estimated to be US$ 2.6 billion in 2019 and is projected to cross US$ 4 billion by 2025, growing at a CAGR of 9.1%. A hand sanitizer is an antiseptic disinfectant obtainable in the form of a foam, liquid, gel and others. It is believed to be more effective than soaps as it kills most microorganisms. Increasing consumer awareness about hygiene coupled with awareness spread by international think tanks like WHO and government initiatives of several economies are driving the hand sanitizer market. Moreover, they are highly convenient and handy while travelling, especially when water is not available to clean hands.

Top exporters of hand sanitizers are Germany, Japan, USA, France, Canada, UK, Netherlands and South Korea. From imports point of view, major countries include China, Belgium, Germany, USA, Thailand and France.

With the outbreak of global pandemic Coronavirus in the year 2019, the sales of hand sanitizers swelled across every region in the world, which has led to a shortage of hand sanitizers. Increase of hand sanitizer demand as of February 2020 in the UK was over 250% and it was over 1,600% in Italy on YoY basis. The M-o-M increase in the United States from December 2019 to January 2020 was over 1,300%. Similarly, Indian manufacturers have witnessed a ten-fold increase in demand over February 2020. This increase in the demand of hand sanitizer is further expected to surge by at least 700% on Y-o-Y basis on an average across all countries.

All the sanitizers from supermarkets and local pharmacies have been almost sold out due to bolstered global demand. Further to this, online e-commerce channels such as Amazon and Flipkart are showing the product to be either out of stock or available at inflated prices.  The surges in demand for hand sanitizer have led online retailers to hike the prices. The companies are increasing the hand sanitizer’s prices by almost 70%, due to high demand.

Source: ITC Trade Map

According to the graph, South Korea’s export demand surged by more than 60% from January 2020 to February 2020. Similarly, Thailand and Switzerland exported hand sanitizers with a higher monthly growth rate from January to February.

During this pandemic phase, as hand sanitizer seems to be exhausted and common people are opting for panic purchases, though it is pretty simple and rudimentary to prepare hand sanitizer at home.

Hand Sanitizer Recipe

1. Two parts isopropyl alcohol or ethanol (91% to 99% alcohol)
2. One part aloe vera
3. Few drops of clove, eucalyptus, peppermint, or other essential oil.

Hand Sanitizer – Product Insight

Based on types and forms, the Hand Sanitizers market is primarily split into:

• Foam hand sanitizer
• Gel hand sanitizer
• Sanitizing hand wipes
• Liquid hand sanitizer
• Spray hand sanitizer

The gel segment dominated the market with a share of 49.4% in 2018. Gel sanitizers are usually thin and watery in formulation and therefore provide the convenience of getting spread easily and penetrate into the skin, killing most of the bacteria. Ease of product availability and wider access to this type of hand sanitizer have fuelled the growth of this segment. The product results in decreased microbial populations in different ways from anywhere and everywhere. Moreover, inclusion of different flavors affecting the fragrance have occupied a prominent place in the global market.

Global Hand Sanitizer Market share by distribution channel, in (%) as per 2018

Source: www.grandviewresearch.com

Hypermarket & Supermarket segment dominated the global hand sanitizer market and held the largest market share of 40.32%. This dominance is primarily due to convenient access to the product from these said markets. In addition to this, many people prefer to check the product before buying it, thus making this distribution channel one of the most preferred and dominant. 

In March 2020, Unilever Company announced that the company is augmenting its production capacity of hand sanitizers to meet the customer demand amid the outbreak of Covid-19. Similarly, in this month only, The Himalaya Drug Company announced that it had proliferated the manufacturing capability of hand sanitizers by adding more product lines and launching new production facilities, in the wake of the Coronavirus disease.

Indian Hand Sanitizer Exports Scenario

Source: ITC TRADE Map

India’s exports of hand sanitizers are continuously rising from past five years at the CAGR of 9.8%. From US$ 26.1 million in 2014, India’s exports escalated to US$ 38.03 million in 2018. Major exporting destination economies are Nepal, Pakistan, UAE, Bangladesh and Malaysia. The Indian hand sanitizer market is expected to grow at a robust pace over the next five years owing to rising awareness about hand hygiene, government campaigns towards encouraging safe sanitation and increasing consumer inclination towards wellness and health.

Increasing concerns regarding health safety, improving living standards and rising health expenditure are some additional factors boosting demand for hand sanitizers in the country. Major players operating in the Indian hand sanitizer market are Reckitt Benckiser (India) Private Limited, ITC Limited, Dabur India Limited, Hindustan Unilever Limited, The Himalaya Drug Company, Pristine Care Products Private Limited, Wipro Consumer Care Limited, Colgate Palmolive (India) Limited, Godrej Consumer Products Limited. 

Seeing the demand, the government has also asked liquor companies to ensure availability of liquor for making sanitisers. Sugar mills are also seeing a surge in demand for special denatured spirits (SDS) to make the product. Globally, liquor companies like that of former Australian cricketer Shane Warne have stopped liquor production and started manufacturing sanitisers. Even domestic liquor companies like Amrut Distilleries are seeking government licence for manufacturing these hand sanitisers. The enhanced demand is expected to precipitate a surge in production and exports of hand sanitisers from India in the coming years.

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