Nivea turns to small cities

As the Nivea brand enters its centennial year, its Indian operations will be strengthened with its making new inroads into distribution in the tier-II and III cities. After becoming a 100 per cent subsidiary of the Germany-based Beiersdorf AG, the brand is yet to reap profits in the country, and is now looking at ways to take its brand to smaller towns and cities.

Having captured the modern trade outlets, the challenge for Nivea is to reach out to more general trade outlets, apart from building brand saliency in the Rs 4,000-crore skin care market already dominated by stalwarts such as Hindustan Unilever and Garnier.

The newly appointed Managing Director of Nivea India, Mr Rakshit Hargave, said, “We would be strengthening our distribution, especially in the B class towns and expand our sales force in the tier II and III cities as well.''

In the past it was an Indian company, JL Morrison which owned the brand licence for Nivea and was responsible for distributing the brand in the country. But analysts say being a licensee did not entail making adequate investments in brand building, and this unfulfilled task is now being done by its fully owned India subsidiary set up in 2005.

“The challenge for the Nivea brand is to go beyond the top 30 towns. Its distribution needs to get more measured and it has yet to make a mark in the general trade,'' says a former employee of the company.