Dabur has had considerable success with Balsara. And Sanjay Singhal is certain that the Fem acquisition will also deliver for them despite their late entry into the skin care space
When it comes to Indian FMCG companies, and their manufacturing presence beyond the national boundaries, Dabur definitely steals the show. Recently, it strengthened its presence in the SAARC region by setting up a export oriented manufacturing unit in Sri Lanka. Interestingly, however, apart from two overseas manufacturing units, all the other manufacturing units spread in countries like Nepal, Bangladesh, Dubai, Ras-al-Khaimah, Nigeria, Egypt and Turkey; are for personal care. Like other players in its industry, personal care is a cash cow for Dabur, and within the category, the company seems to have the most optimistic projections on the skin care range. With the Fem acquisition (which was completed in 2009) and several other marketing initiatives including new product launches, the company is battling the well entrenched incumbents head on.
“We may be relatively new entrants in skin care. But we have – in a short period of time – created a niche for ourselves and a validation of the same is seen in the fact that Dabur has, within a couple of years, become a strong Number 3 player in the cold cream market. In fairness bleaches, Dabur is already the market leader,” replies Sanjay Singal, Marketing Head, Skin Care, Dabur India Ltd. who is leading Fem’s brand initiatives from the front.
Dabur has had considerable success in terms of minting the synergy effects from acquisitions. Its 2005 acquisition of Balsara’s home products in FY 2006, recorded a revenue of Rs.1.685 billion, a growth of 42% over last year. In the same league, acquiring Fem enabled Dabur to dive head first into the high potential segment of skin care and Dabur immediately catapulted to the top league, competing with the likes of HUL, P&G and ITC. Apart from acquisitions, Dabur unleashed a number of skin care products under its flagship brand Dabur Gulabari and maintained an edge over competition with it’s natural heritage positioning. Affirms Sanjay Singal to 4Ps B&M, “We remain true to our heritage and are continuously working to update our portfolio in line with the changing consumer demands and aspirations. Dabur has highly differentiated brands in the market, and most of its products are based on natural and Ayurvedic ingredients.”
To be sure, a lot of companies today offer Ayurvedic and herbal products and many of them have forayed into the service industry with their Ayurvedic products. But although Dabur enjoys the consumer’s trust because of its herbal heritage and has a strong brand equity as an Ayurvedic brand, it has no intention to foray into service industry. One of the main reasons for the same is that the group believes it’s not logical to venture into the service industry until you have your own real-estate presence. This ‘ look-before-you-leap’ approach seems to have paid off as it’s the real-estate problem that’s propelling HUL to hive off it’s Ayurvedic service business – Ayush. Instead of following this route, Dabur is blending service with its retail foray and is taking all of its skin care range to its health & beauty stores. Christened as New U, Dabur has 47 stores and targets to earn revenue of Rs.17 billion by the year 2013 through its 350 stores. These stores are also emerging as a platform to nurture and propagate the lesser known brands like Dabur Uveda. Elaborates Sanjay, “For Dabur Uveda, the penetration is slightly lower and that too is a conscious effort on part of Dabur as we are selling Dabur Uveda only through selective cosmetic outlets and through a network of beauty advisors. The idea here is to have a personal interface with the consumer, wherein the beauty advisors interact with the consumer, understand their skin type and their specific needs and then recommend.” So while this is not a pure play service format, Dabur has given a value added offering to its consumers that can help build loyalty in a market where this precise customer trait is in short supply.
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