Transcript Building world class competence by Harsh Mariwala

Leveraging India Internationally
Marico Experience
1
Introduction
FMCG Company formed in 1990 :
-
With 2 Brands : Saffola & Parachute
-
In 15 years : INR 100cr to 1150cr
-
All sales through branded products and
services
2
Marico Builds Brands ...
Downstream Value Addition :
Consumer End - Branding, Product, Packaging
V/S
Upstream Value Addition :
Lower Costs – IT & BPO
3
The Business
Hair Care – Pre & Post Wash
(In India and Abroad)
4
The Business….
Skin Care –
Customised Solutions :
Through KAYA Skin Clinics
Sundari
–
Global Ayurvedics
:
Business acquired in US in 2003
5
The Business….
Wellness –
Healthy Cooking Oil, Blends,
Salt, Functional Foods
6
Characteristics of FMCG Business
1. Low Capital Needs
2. High Branding Costs
3. Distribution : critical to success
4. New Products : Failures 8 out of 10 Launches
5. 3 to 5 years to break-even, if successful
6. Global Brands & MNCs in large segments
7. Be Distinctive & Unique to succeed
7
Marico’s International Journey….
How Did It All
START ?
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Marico’s International Journey….
It all started with smuggling………
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Marico’s International Journey….
Export of Coconut Oil was prohibited….
Marico had then lobbied to get export allowed….
Thus started a “new” business in the early 90’s….
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Journey driven by....
“Indian- Centric”- driven by :
• Access to Clusters of Indian expats
- Gulf, US, Canada, Singapore & Malaysia
• Common Media Footprint
- Gulf, other SAARC Countries
• Common Ethnicity/ Hair Oiling habits
- Bangladesh, Nepal, Pakistan, Bhutan
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The Mechanics....
Used Distributor Model to enter countries
Appointed Distributors in Gulf, SAARC
countries, US, Singapore / Malaysia etc
And then onto …. Brand Building in the
markets abroad
Spread the Brand : “PARACHUTE”
12
Where we have reached.…
Direct
 Bangladesh
 UAE, Saudi, Oman, Qatar, Bahrain, Kuwait,
Yemen, Lebanon, Sudan,Syria, Jordan
 Pakistan, Nepal, Bhutan
 US, Canada, Australia
 Singapore, Malaysia, Indonesia, Myanmar
 Kenya
 Planned : African countries
Indirect
 Several where ...Parachute is available
through wholesale trade channels
13
How it has progressed....
IBG sales
180
160
140
120
100
80
60
40
20
0
161
116
96
80
63
5
8
12
16
21
35
46
FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
International turnover in INR cr
FY07 figs Plans
14
Marico in the Middle East
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Started with Oils… Indians in Gulf...
• Parachute Gold - unique positioning.
• Parachute Lite for easy grooming & UV protection.
• Parachute Jasmine : perfumed coconut
nourishment with conditioning.
• Parachute Sampoorna :
value added CNO with
hibiscus, almond etc for
complete nourishment
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To Value Added Hair Care …
…In Modern Formats…
…Customised to suit Locals...
• Parachute CREAMS
• Parachute HAMAM ZAIT
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Using local ads… local celebrity…
Local Events
Displays
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The Result :
Middle East Sales in INR cr
SALES
70
60
60
50
43
40
34
30
20
24
14
17
FY02
FY03
10
0
FY04
FY05
FY06
FY07(E)
Parachute Creams are the largest selling within the basket ...
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The Learnings...
•
No Escape Buttons – Separate Structure
•
Non-Core business for MNCs, Grab Market Share
•
Local Insights – Product Development
•
Locally developed Advertisements and Marketing
•
Experience Dealing – Modern Trade
•
For people : Opportunity Posting Outside India/ Travel
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Marico in Bangladesh
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Bangladesh
• 15 years behind India
• Started Market Expansion in 1995
• Large Coconut Oil Market
• Dominated by Local Brands
22
The Parachute Journey....
Leveraged :
1. Plastic Packaging with flip top caps
• attractive, convenient, economical
2. Wide Mouth Jars – All weather pack
3. Mini Bottles
Distribution using Information
Technology
Superior Localised Advertising
Superior Sales Promotions
23
The Parachute Journey....
Started with very low margins
On gaining critical mass :Set up Subsidiary & Backroom Operations
Set up our own factory
Today …..
The largest Indian Company in Bangladesh……
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Going Beyond Oils
Acquired Two Soap Brands … 2005
25
The Results :
Last 5 years(fig in Tk Crores)
SALES
180
160
140
120
100
80
60
40
20
0
156
99
73
34
FY02
46
FY03
58
FY04
FY05
FY06
FY07(E)
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Parachute in Bangladesh: MS %
60%
50%
40%
30%
20%
10%
0%
PCNO MS
00-01
01-02
02-03
03-04
04-05
05-06
15%
24%
33%
42%
47%
55%
MARKET SHARE > 55%
Awareness
89% Total awareness level- 95% in urban vs. 79% in rural
42% TOM awareness across Bangladesh
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Further Geographical Expansion
-
Limited by hair oiling habit
-
To leverage
- Indian Habit
- Food
- Raw Materials like spices, Indian coconuts
- Science – Ayurveda
- Any other source of competitive advantage
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Developed Countries
-
Highly cluttered – Saturated
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Different Distribution
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High Cost Entry
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Dominated by MNCs
Decided to create brand through an
experience route
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Sundari
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Acquired Brand
Built on Principals of Ayurveda
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Changed Focus
Store to Spa Brand
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Catering to Resorts
Destination Spas
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Developed Protocols & Training
Shiro Dhara, Marma Points
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Appointed Distributors in Asia Pacific
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Sundari (Contd)
-
Four Seasons
Mariott, Canyon Ranch, Oberoi, Westin
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Huge Learning Curve
B to B Marketing
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Long Lead Times to get entry
-
Niche Brand
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Kaya – 2003
-
Customised
Solutions for Skin
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Problem Normal
and Anti-Aging
Skin
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Dermatologists –
Key Differentiator
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Medi-Spa-Zen like
Ambience
-
Launched Hair
Services
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Kaya ME
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Unique Business Model
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No-Chain Internationally – Leveraged
doctors / skin practitioners
2 in Dubai
1 in Abu-Dhabi
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Un Clear Regulations
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Plan expansion other GCC Countries
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Going Forward - Next 3 Years
1. Expand – GCC & Bangladesh
Wider Product Basket
2. New Countries
Leverage Hair Care Products
3. Expand Kaya
GCC Countries and Beyond
4. Sundari – Europe
Increasing Scale
5. Growth through Organic / Acquisitions
Route
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Benefits Beyond Top/ Bottom Line
1. Career Paths in Different Business
Outside India
2. Leveraging Technology Across
3. Learning Marketing and Distribution
4. New Ideas Domestic Business
5. Common Advertisement mediums e.g.
Kerala / Gulf
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We are passionate about
India Advantage
&
Uncommon Sense
Global Players in healthy living
through distinctive solutions, largely
leveraging India advantage.
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Thank You
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