Godrej Consumer to renew focus on hair colours for growth

Godrej Consumer Products Ltd (GCPL) plans to strengthen its hair colour offerings through new launches and variants, in a bid to arrest its dipping market share in this lucrative sgment.

“One of the major tasks for the year is to re-invigorate our hair colour business and recover market share,” said Adi Godrej, chairman, Godrej Group, in a call with analysts and investors today. The company has a 32.6 per cent market share in this category, but its growth rate here is lower than the 19 per cent market growth rate.

The company has a range of products from powders to oil-based liquids, creams and lotions in a range of colours from blacks, burgundy and browns. The base of the market is henna (mehndi) at 15 per cent, the top end of creams is 20-25 per cent and the bulk is the liquids and powders at 40-45 per cent. While the focus on its key brands Expert Hair Colour and Renew Hair Cream will remain, “We will launch a premium product that will strengthen our representation across the pyramid,” said H K Press, vice chairman, GCPL.
 

ACRION PLAN

The company will...

* continue to focus on Cinthol, Fairglow

* sharpen focus on Rs 5 and Rs 10 packs

* launch a premium product in the hair colour segment

* use the Rs 400 crore raised for acquisitions in India and abroad

* widen its rural penetration and international reach

The other areas of growth for the FMCG company whose operations now include Godrej Sara Lee and Godrej Hersheys, besides GCPL, is to strengthen and widen its rural penetration and expand the geographical reach of the company internationally, as well as expand its products’ portfolio. Currently, the rural sector contributes 30-33 per cent of the company’s overall revenues, which it expects to increase to 50-55 per cent in the next three years.

“Today, we cover about 17,000 to 18,000 villages and in the next couple of years will cover 50,000 villages. We have a network of 3,300 small towns and we will double this to 6,500 in a year’s time. The third part of this strategy is to continue our focus on traditional retail and wholesale,” said Press.

Earlier this year, the company had a rights issue of Rs 400 crore. “We will be using this for exploring acquisition opportunities in India and outside,” said Godrej.

Internationally, the company is present in two businesses. In South Africa, it has Kinky and Rapidol. In Britain, it has Keyline and it is also present in the Middle East. With the global slump affecting modern trade channels and its international businesses, the company is adopting a strategy to focus on cost efficiencies and strengthening the association with modern trade channels for its international operations.