Fast moving consumer goods company Bajaj Corp is sharpening focus on
rural areas to drive volumes and is also scouting for acquisitions in
the personal care category, a company official has said.
With a
rural focused-Budget, the company expects demand from the hinterlands to
revive in the upcoming financial year. The company has been witnessing
tepid growth in the rural markets since the past many months.
"Our growth is coming largely from urban markets now and the growth rate
in rural markets is a lot slower since the past 18 months or so. This
year our focus will be to both sustain urban growth at the same time
also accelerate growth in rural markets," Sandeep Verma, sales and
marketing president at Bajaj Corp told PTI.
He said the prof-rual
budget coupled with a good monsoon should bring back rural demand. "It
is not as though rural market is de-growing, it is just not growing as
fast as urban. Till two years ago, rural was growing at 10 percentage
points higher than the urban markets but it has now slowed down. We
expect rural demand to come back in FY19."
Urban areas contribute 60 per cent of its sales and the rest come from the hinterlands.
Rural sales
To drive rural sales, the Shishir Bajaj-led company is allocating a
large portion of its marketing budget for. "We are spending a huge
amount for rural marketing. We are over indexing rural to 1.5 times when
it comes to TV spends and even some of the other above-the-line
spends," he said.
The Rs 800-crore company normally spends 16-18 per cent of revenue on advertising and marketing.
Personal product
Bajaj
Corp, whose popular products in the hair oil segment include Bajaj
Almond Drops, Bajaj Kailash Parbat and Bajaj Brahmi Amla, is also
planning to amplify its lower priced products in the rural market.
"Our Re 1 packet contributes to 40 per cent of our rural sales by
volume. We are going to focus on it a lot more and drive its depth. Next
financial year we would be launching Rs 10 almond oil in rural and
semi-urban markets," he said.
It has also increased its direct
coverage in rural areas by 20 per cent after GST by appointing more
distributors, direct sales agents.
The Rs 6,500-crore hair oil
industry is growing at 7.5 per cent and Bajaj Corp aims to increase its
market share to 16-16.5 per cent in FY19 from 14.5 per cent now.
The company focuses on the Rs 4,000-crore valued added hair oil category
that is growing at 13 per cent and would be launching a new hair oil
next quarter. It recently launched Coco Jasmine hair oil in Maharashtra,
making its foray into the coconut hair oil space.
It had
acquired NoMarks brand from Ozone Ayurvedics in 2013 to enter the
skin-care and Verma said they are looking at inorganic growth
opportunities in the personal-care segment.
Acquisitions
"We are open to acquisitions in the personal care category if they have
some sort of synergy with our distribution system," he said, adding he
expects NoMarks to become a Rs 100-crore brand in the next two years.
"The anti-marks category us growing at 30 per cent and is a Rs 350-380
crore category. We will continue to invest very strongly in the NoMarks
and we will have new products in the skincare segment under the NoMarks
brand," he said, adding in FY17 it contributed Rs 28 crore to the
turnover.
05 Mar 2018, 04:49 AM