Dabur: Building Bharat First Brands Dabur's Mohit Malhotra says the company has been ahead of the curve to keep urban as well as rural demand intact
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Today, when FMCG companies are struggling with tepid rural demand, Dabur India has amped-up its game. The company's rural demand continues to outpace its urban demand. "To expand the rural footprint, we invested ahead of the curve. Rural India accounts for around 46 per cent of our total sales," said Mohit Malhotra, CEO, Dabur India.
Over the past one year, the company has significantly grown its rural network from 60,000 villages in March 2021 to around 88,000 villages now. Rural demand for Dabur grew at 7.4 per cent on a base of 25.3 per cent whereas urban demand grew at 2.5 per cent on a base of 17.8 per cent in Q3 of 2021-22.
"We are also expanding our product basket in the rural market by way of newer LUP (low unit price) or affordable packs across categories to feed these markets and push demand growth. We have invested in consumer activations in rural India to reach out to consumers in the hinterland, giving them an opportunity to touch, feel and experience our products."
Malhotra joined Dabur in 1994, took over as the business head of the European Union in 2001, moved into Dabur's international business in 2004 as head of marketing based in Dubai and took over the reins as CEO of Dabur International in 2008. He then went on to take charge as the CEO-India business and subsequently as the global CEO of the company in April 2019.
Building Power Brands
The company's power brand strategy focusing on the top eight brands is the driving force behind the robust growth. Allocation of appropriate resources and investments are helping these brands to grow to the next level and capture more opportunities through portfolio expansion and consumer connect. "One of the successful examples of this strategy is Dabur Red Paste which has touched a INR 1,000 crore mark. We are also doing innovation under the power brands to keep them contemporary and relevant for millennials and Gen Z," the CEO added.
Currently, at an overall level, the company has reached 1.3 million outlets and is likely to hit 1.4 million by the end of this financial year.
Amping up the Market
"All our three verticals of healthcare, HPC and food have significant headroom for growth and we see a lot of opportunities for expansion within these verticals. Our focus will be to gain market share across our portfolio through right investments, great execution and driving consumer centric innovations. We aim to reach over 1.5 million outlets next year."
As inflation continues to rock the sector, he said, "Inflation in the third quarter of 2021-22 was truly unprecedented at over 13 per cent. There is continued inflation in hydrocarbon derivatives, paper-based packing material, raw honey, edible oils and some key spices that we use. Going forward, we will be taking calibrated price increases in addition to cost optimization to mitigate this impact. Inflation, in fact, remains a concern over the short term."
With the onset of the pandemic, the e-commerce platform has been thriving. To keep up with the pace, Dabur has launched a host of e-commerce exclusive and digital native innovations. "Our new products accounted for around 3.6 per cent of our sales in the third quarter of 2021-22, but in the e-commerce space, this is in the range of around 10 per cent. We are very well geared to clock around INR 100 crore from these products in the e-commerce space in the next fiscal."
Some of the new launches in this space are Real Health range of Superfood Seeds, Dabur Baby Diaper, Dabur Cold-Pressed Mustard Oil, Dabur Ghee and Vatika Select range of shampoos, to name a few. "So, e-commerce is a big future pillar of growth for us," said Malhotra.