Leveraging India InternationallyMarico Experience
FMCG Company formed in 1990 :
- With 2 Brands : Saffola & Parachute- In 15 years : INR 100cr to 1150cr- All sales through branded products and servicesIntroduction
Downstream Value Addition :Consumer End - Branding, Product, PackagingV/S
Upstream Value Addition :Lower Costs IT & BPOMarico Builds Brands ...
The Business
Hair Care Pre & Post Wash(In India and Abroad)
Skin Care Customised Solutions :Through KAYA Skin Clinics
The Business.Sundari Global Ayurvedics : Business acquired in US in 2003
The Business.Wellness Healthy Cooking Oil, Blends, Salt, Functional Foods
Low Capital NeedsHigh Branding CostsDistribution : critical to successNew Products : Failures 8 out of 10 Launches3 to 5 years to break-even, if successfulGlobal Brands & MNCs in large segmentsBe Distinctive & Unique to succeedCharacteristics of FMCG Business
How Did It AllSTART ?Maricos International Journey.
It all started with smuggling
Maricos International Journey.
Export of Coconut Oil was prohibited.
Marico had then lobbied to get export allowed.
Thus started a new business in the early 90s.Maricos International Journey.
Indian- Centric- driven by :
Access to Clusters of Indian expats- Gulf, US, Canada, Singapore & MalaysiaCommon Media Footprint - Gulf, other SAARC Countries Common Ethnicity/ Hair Oiling habits - Bangladesh, Nepal, Pakistan, BhutanJourney driven by....
Used Distributor Model to enter countries
Appointed Distributors in Gulf, SAARC countries, US, Singapore / Malaysia etc
And then onto . Brand Building in the markets abroad
Spread the Brand : PARACHUTE The Mechanics....
DirectBangladesh UAE, Saudi, Oman, Qatar, Bahrain, Kuwait, Yemen, Lebanon, Sudan,Syria, JordanPakistan, Nepal, BhutanUS, Canada, AustraliaSingapore, Malaysia, Indonesia, MyanmarKenyaPlanned : African countriesIndirectSeveral where ...Parachute is available through wholesale trade channelsWhere we have reached.
How it has progressed....International turnover in INR cr FY07 figs Plans
Chart1
5
8
12
16
21
35
46
63
80
96
116
161
IBG sales
Sheet1
FY965
FY978
FY9812
FY9916
FY0021
FY0135
FY0246
FY0363
FY0480
FY0596
FY06116
FY07161
Sheet1
IBG sales
Sheet2
Sheet3
Marico in the Middle East
Parachute Gold - unique positioning.
Parachute Lite for easy grooming & UV protection.
Parachute Jasmine : perfumed coconut nourishment with conditioning.
Parachute Sampoorna : value added CNO with hibiscus, almond etc for complete nourishment
Started with Oils Indians in Gulf...
In Modern FormatsCustomised to suit Locals...
Parachute CREAMSParachute HAMAM ZAITTo Value Added Hair Care
Local Events
DisplaysUsing local ads local celebrity
The Result : Middle East Sales in INR crParachute Creams are the largest selling within the basket ...
Chart1
14
17
24
34
43
60
SALES
CONS
2001-022002-032003-042004-052005-062006-07
Rs. LacsRs. LacsRs. LacsRs. LacsRs. LacsRs. Lacs
SALES1,389.571,747.412,422.163,430.714,303.18597919,272.03
GC539.21582.071,244.121,644.451,997.46
ASP431.32517.61518.25752.711,804.0021006,123.89
NC107.8964.46725.87891.74193.46
FY02FY03FY04FY05FY06FY07(E)
SALES141724344360
CONS
SALES
01-02
SALESGCASPNC
2001
SAP2544.75763.04431.32331.72
N&B456.72172.12172.12
OTHERS160.8841.71041.71
Bulk537.581010
GULF1389.57539.21431.32107.89
107.89
2002
SAP3209.55704.15517.61186.54
N&B503143.08143.08
OTHERS156.2638.7138.71
Bulk802.88-59.71-59.71
GULF1747.41582.07517.6164.46
64.46
Sheet3
No Escape Buttons Separate StructureNon-Core business for MNCs, Grab Market ShareLocal Insights Product DevelopmentLocally developed Advertisements and MarketingExperience Dealing Modern TradeFor people : Opportunity Posting Outside India/ TravelThe Learnings...
Marico in Bangladesh
15 years behind IndiaStarted Market Expansion in 1995Large Coconut Oil MarketDominated by Local Brands
Bangladesh
Leveraged :Plastic Packaging with flip top capsattractive, convenient, economicalWide Mouth Jars All weather packMini Bottles
Distribution using InformationTechnology
Superior Localised Advertising
Superior Sales PromotionsThe Parachute Journey....
Started with very low margins
On gaining critical mass :-Set up Subsidiary & Backroom OperationsSet up our own factory
Today .. The largest Indian Company in BangladeshThe Parachute Journey....
Going Beyond Oils Acquired Two Soap Brands 2005
The Results : Last 5 years(fig in Tk Crores)
Chart2
34
46
58
73
99
156
SALES
CONS
2001-022002-032003-042004-052005-062006-07
Rs. LacsRs. LacsRs. LacsRs. LacsRs. LacsRs. Lacs
SALES1,389.571,747.412,422.163,430.714,303.18597919,272.03
GC539.21582.071,244.121,644.451,997.46
ASP431.32517.61518.25752.711,804.0021006,123.89
NC107.8964.46725.87891.74193.46
FY02FY03FY04FY05FY06FY07(E)
SALES3446587399156
CONS
SALES
01-02
SALESGCASPNC
2001
SAP2544.75763.04431.32331.72
N&B456.72172.12172.12
OTHERS160.8841.71041.71
Bulk537.581010
GULF1389.57539.21431.32107.89
107.89
2002
SAP3209.55704.15517.61186.54
N&B503143.08143.08
OTHERS156.2638.7138.71
Bulk802.88-59.71-59.71
GULF1747.41582.07517.6164.46
64.46
Sheet3
Parachute in Bangladesh: MS %MARKET SHARE > 55%Awareness89% Total awareness level- 95% in urban vs. 79% in rural42% TOM awareness across Bangladesh
Chart1
5644
5941
6436
Platics
Tins
Sheet1
PlaticsTins
2003-045644
2004-055941
2005-066436
Sheet2
Growth03-0404-0505-06
Parachute34%25%21%
LP24%19%10%
SP60%38%41%
Chart2
0.15
0.24
0.33
0.42
0.47
0.55
PCNO MS
Sheet3
00-0101-0202-0303-0404-0505-06
PCNO MS15%24%33%42%47%55%
Sheet4
Sheet5
Limited by hair oiling habitTo leverage- Indian Habit- Food- Raw Materials like spices, Indian coconuts- Science Ayurveda- Any other source of competitive advantage
Further Geographical Expansion
- Highly cluttered SaturatedDifferent DistributionHigh Cost EntryDominated by MNCs
Decided to create brand through an experience routeDeveloped Countries
Acquired BrandBuilt on Principals of AyurvedaChanged FocusStore to Spa BrandCatering to ResortsDestination SpasDeveloped Protocols & TrainingShiro Dhara, Marma PointsAppointed Distributors in Asia PacificSundari
Four SeasonsMariott, Canyon Ranch, Oberoi, WestinHuge Learning CurveB to B MarketingLong Lead Times to get entryNiche BrandSundari (Contd)
- Customised Solutions for SkinProblem Normal and Anti-Aging SkinDermatologists Key DifferentiatorMedi-Spa-Zen like AmbienceLaunched Hair ServicesKaya 2003
Unique Business ModelNo-Chain Internationally Leveraged doctors / skin practitioners 2 in Dubai1 in Abu-DhabiUn Clear RegulationsPlan expansion other GCC Countries
Kaya ME
1. Expand GCC & Bangladesh Wider Product Basket2. New CountriesLeverage Hair Care Products3. Expand KayaGCC Countries and Beyond4. Sundari EuropeIncreasing Scale5. Growth through Organic / Acquisitions Route
Going Forward - Next 3 Years
1.Career Paths in Different Business Outside IndiaLeveraging Technology AcrossLearning Marketing and DistributionNew Ideas Domestic BusinessCommon Advertisement mediums e.g. Kerala / GulfBenefits Beyond Top/ Bottom Line
We are passionate about
India Advantage
&
Uncommon Sense
Global Players in healthy living through distinctive solutions, largely leveraging India advantage.
Thank You