Dabur regains market share, looks at boosting rural reach

Dabur India has regained lost market share, with the threat posed by Patanjali having receded, chairman Amit Burman told ET in his first interview after being elevated to the post this month.

“It (Patanjali’s) was a disruptive strategy to kill competition by price, like it happens in many industries. But after the disrupting, things settle down and ultimately product quality and depth of distribution are what matter,” he said.

Amid a slowing economy, intensifying competition and volatile markets, the Rs 8,500 crore-plus Dabur has identified eight power brands including Vatika shampoo, Red toothpaste, Real juice and Amla hair oil and is investing disproportionately to push them, said Burman, 50.

The youngest chairman of Dabur and a fifth-generation member of the founder family, Burman said his focus would be to enhance science-based ayurveda products, premiumisation, rural distribution and e-commerce.

“We have different products which are helping us. Our strength has been in healthcare, where we have seen good growth. That’s where newer products will come in,” said Burman, who is also promoter of independent food retailing company Lite Bite Foods.

Inskincare, where Dabur has had a relatively smaller presence, it plans to step up premiumisation and high-margin launches. It is creating products only for e-commerce in spaces such as babycare to leverage on the scale opportunity it presents. Online grocery sales for the fast-moving consumer goods sector are only 2% of the overall Rs 3 lakh crore-plus category presently but projected to increase 11% by 2030.

Another target, Burman said, would be expansion of the company’s rural reach to 55,000 villages by March 2020, up from 48,000 presently. Citing a sharp rural slowdown, market research company Nielsen revised its growth forecast for the fast-moving consumer goods (FMCG) sector to 9-10% in 2019 from its previous outlook of 11-12%.

“For rural markets, we will expand the footprint to new villages, while in urban centres we will leverage rapidly growing channels such as e-commerce and cash-and-carry,” Burman said.

Baba Ramdev-led Patanjali Ayurved, which sells staples, personal care and packaged foods, had forced almost all consumer goods companies to accelerate their presence in the ayurveda and natural products space over the past four years.

In the Rs 1,200 crore organised honey market, Dabur Honey’s market share dropped to almost 40% a year after Patanjali’s entry from about 60% three years ago. It has since recovered to about 54% now. In chyawanprash, Dabur’s share, which had slipped to 58% in 2016, has returned to over 60% now.

Source:-https://retail.economictimes.indiatimes.com/news/food-entertainment/personal-care-pet-supplies-liquor/dabur-regains-market-share-looks-at-boosting-rural-reach/70426240