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 ?
8
Marico’s International Journey….
It all started with smuggling………
9
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….
10
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
11
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
15
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
16
To Value Added Hair Care …
…In Modern Formats…
…Customised to suit Locals...
• Parachute CREAMS
• Parachute HAMAM ZAIT
17
Using local ads… local celebrity…
Local Events
Displays
18
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 ...
19
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
20
Marico in Bangladesh
21
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……
24
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)
26
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
27
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
28
Developed Countries
-
Highly cluttered – Saturated
-
Different Distribution
-
High Cost Entry
-
Dominated by MNCs
Decided to create brand through an
experience route
29
Sundari
-
Acquired Brand
Built on Principals of Ayurveda
-
Changed Focus
Store to Spa Brand
-
Catering to Resorts
Destination Spas
-
Developed Protocols & Training
Shiro Dhara, Marma Points
-
Appointed Distributors in Asia Pacific
30
Sundari (Contd)
-
Four Seasons
Mariott, Canyon Ranch, Oberoi, Westin
-
Huge Learning Curve
B to B Marketing
-
Long Lead Times to get entry
-
Niche Brand
31
Kaya – 2003
-
Customised
Solutions for Skin
-
Problem Normal
and Anti-Aging
Skin
-
Dermatologists –
Key Differentiator
-
Medi-Spa-Zen like
Ambience
-
Launched Hair
Services
32
Kaya ME
-
Unique Business Model
-
No-Chain Internationally – Leveraged
doctors / skin practitioners
2 in Dubai
1 in Abu-Dhabi
-
Un Clear Regulations
-
Plan expansion other GCC Countries
33
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
34
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
35
We are passionate about
India Advantage
&
Uncommon Sense
Global Players in healthy living
through distinctive solutions, largely
leveraging India advantage.
36
Thank You
37