Rural consumers spending on premium high-quality products: Dabur India CFO

There's a growing awareness today among consumers in rural India too about beauty and health, and increasingly, people are seeking branded products to meet their personal and health care needs.
Dabur

The Indian consumption story is back to its normal and astounding growth numbers are on table. For example, Dabur India has witnessed highest ever volume growth of 21% in the AMJ (April, May, June) quarter. The company’s CFO Lalit Malik also reveals some interesting consumption pattern from rural Indian markets.

Excerpts:

The Nielsen study says, consumption is back after the demonetisation, GST huddle and the macro economy looks good. In this context, what was Dabur's performance in terms of sales/revenue in the AMJ quarter?

Our brands reported a robust performance during the first quarter of 2018-19 fiscal, growing ahead of the market and delivering strong double-digit growth across all our key categories like Health Supplements, Hair Care, Oral Care, Skin Care, Home Care and Foods. We have put in place a prudent growth strategy and continued to invest heavily behind our brands to successfully tap the emerging opportunities. Our India FMCG business, in fact, reported its highest-ever Volume growth of 21% during the quarter. Dabur’s Comparable Standalone India Revenue for the quarter grew by 24.7%. The company reported a Standalone India Revenue of Rs 1,473.1 Crore in Q1 of 2018-19.

Dabur's Shampoo business ended Q1 with a growth of over 30%. Dabur’s Honey sales continued to report strong gains, growing by around 42%, driving the Health Supplements category growth to 27.5% in Q1. The Skin Care category grew by 27.1%, while the Foods business, led by strong demand for our packaged juices, posted an over 26% growth during the first quarter. The Digestives business also grew by nearly 22% during the first quarter of 2018-19, while Dabur’s Home Care and Oral Care businesses reported an over 17% growth.

We have been witnessing a gradual improvement in consumer demand. Our focus on brand-building and market expansion coupled with innovation has helped Dabur sustain strong growth in our core categories, which has been significantly ahead of the market. Going forward, we will continue to focus on pursuing an aggressive and profitable growth strategy.

What's the latest trend in consumer buying behaviour?

Recent years have seen the re-emergence of Ayurveda with a growing population of Indians embracing traditional recipes and natural products for meeting their day-to-day health and personal care needs. This consumer trend continues to gain traction offering numerous opportunities for growth and expansion. As the country’s leading Science-based Ayurveda expert, Dabur has been at the forefront of driving innovation to make this traditional Indian knowledge available in a form that appeals to the modern consumer.

What’s the trend there in Dabur?

Dabur has always believed in the benefit of Ayurveda and has been spreading the goodness of Ayurveda among our consumers in India with a range of Ayurvedic products. For the past 134 years, we have been developing and successfully introducing products based on Ayurveda to cater to the ever-changing needs of the consumer. We are one of the very few players in the Ayurvedic and Herbal space today. Dabur has the advantage of being the early mover in this category. Dabur is today India’s leading natural personal and health care company with a portfolio of products on the Herbal/Ayurvedic platform. Dabur maintains its edge of competitors with its herbal and Ayurvedic heritage of over a century. We remain true to our heritage and are continuously working to update our portfolio in line with changing consumer demands and aspirations.

How narrow or small the urban/rural consumption drive?

There’s a growing awareness today among consumers in rural India too about beauty and health, and increasingly, people are seeking branded products to meet their personal and health care needs. We are also increasingly seeing rural consumers moving towards branded beauty care products. Gone are the days when the rural consumer was content with using loose mustard oil and plain soap on her hair and skin. Today, she is seeking special branded products for her daily skin and healthcare needs. The rural consumers across income segments are exhibiting marked propensity towards spending on premium high-quality products, which are backed by strong brand values. With the enhanced distribution footprint, we are now well placed to meet this demand.

How consumers are reacting to your natural products?

While a lot of companies today offer herbal or Ayurvedic products, Dabur enjoys the consumer’s trust because of its Ayurvedic heritage. Consumers understand that if a product comes from the House of Dabur, it is truly natural.

 

Lalit Malik, CFO, Dabur India Ltd
 
 
 
 
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