Our turnover will cross Rs 2,000 cr by year-end: Jean-Christophe Letellier

Interview MD, L'Oreal India

Jean-Christophe Letellier took over as the managing director of L'Oreal India 11 months ago. He oversaw the French beauty major's first acquisition in India the very next month and is in the process of implementing what global chairman Jean-Paul Agon had articulated last year on his India visit. This includes localising products, pushing distribution, and looking at cutting-edge India-specific innovations in its goal to reach a turnover of Rs 7,000 crore by 2020. Further acquisitions are also on L'Oreal's mind and in this conversation with Viveat Susan Pinto, Letellier indicates where the company would make its next move in this regard. Excerpts:

You closed calendar year 2013 with sales of Rs 1,800 crore. Where do you see yourself at the end of this year?

We should cross the Rs 2,000-crore mark in terms of turnover by the end of this year, continuing with our double-digit growth rate. Last year, we grew at 16 per cent in terms of top line when the overall beauty market was down to six-seven per cent in terms of growth rate. Our endeavour is to get into L'Oreal's top-five club of markets by 2020. We are currently ranked 16th and if we maintain our double-digit growth rate per year, we should be able to achieve this by 2020.

While localisation of products is a key part of your plan to increase turnover, are you considering an exclusive ayurvedic or herbal line given India's rich natural heritage and a market that exists for these products?

We are clear that we do not want to do 'me-too' products. We want to use local ingredients and transform them into even better products. Our research and innovation centre in Mumbai as well as our advanced research laboratory in Bangalore is doing precisely this. At the same time, we are open to alliances, joint ventures and partnerships that will help us in our endeavour to utilise local knowledge to produce superior products.

Will you consider acquisitions of local herbal and ayurvedic companies in your bid to grow turnover?

We are not closed to the option of acquisitions in this area, but if there are other avenues (such as partnerships) by which we can grow our footprint, we will not rule that out either. At a broad level, acquisitions in the consumer products and luxury space are two areas where we would be interested in making acquisitions in the future. We already have leadership in professional products (targeted at salons) and with the acquisition we made last year of (Mumbai-based) Cheryl's Cosmeceuticals, we broadened our offering to include skincare products and services besides haircare. So acquisitions in professional products is not something we will actively look at. There are other areas which we'd be interested in as far as acquisitions go.

You have also begun rollout of affordable products this year. You started with a Rs 39-a-pack creme hair colour in March. What more can one expect from you in this regard?

Garnier Black Naturals, the product we launched in March, is not a downgrade of a creme hair colour, but an upgrade from a powder hair dye. This is our first non-ammonia, oil-based creme hair colour for single application at Rs 39. This is what I call a bridge product. And you will see more such products in hair care and skin care. Products that are accessible, of good quality, that will help consumers move up, not down. That is what most people want. And we realise that making it accessible to them is critical for our growth here.

Most consumer goods companies have increasingly tapped rural markets in the past few years to grow their business. Will you make a beeline for rural markets in the coming years?

It is a matter of maturity and time before we consider going to rural areas. We do not want to distract ourselves from the task at hand by going into markets we are not prepared for either with our products or formats. There is enough potential in urban markets for us to continue operating in urban areas. Our ambition is to be the No 1 beauty company in urban India catering to the population residing or coming to the cities. We currently are at No 3 with an overall market share of eight per cent. When the market evolves and we are ready with our portfolio of products, we may consider stepping into rural areas.