1. Himalaya Drug company eyes $1 bn turnover; honcho reveals what its biggest advantage is

Himalaya Drug company eyes $1 bn turnover; honcho reveals what its biggest advantage is

Homegrown holistic wellness firm Himalaya Drug Company, which posted Rs 1,800 crore turnover last fiscal, is expecting to be a billion dollar company by 2020.

By: | Published: November 15, 2016 6:02 AM
The herbal and naturals segment is definitely on the upswing and has tremendous potential. New players have entered this market, existing players are launching herbal product lines and there is an all-round increase in awareness for such products amongst consumers. The herbal and naturals segment is definitely on the upswing and has tremendous potential. New players have entered this market, existing players are launching herbal product lines and there is an all-round increase in awareness for such products amongst consumers.

Homegrown holistic wellness firm Himalaya Drug Company, which posted Rs 1,800 crore turnover last fiscal, is expecting to be a billion dollar company by 2020. The company aims to expand its presence in all its product verticals and also has plans to increase the workforce. In an interview with BrandWagon’s Meghna Sharma, the company’s CEO Philipe Haydon talks about what sets the company apart and its future plans.

The world surely seems to have moved back to herbal and ayurvedic products. As a brand dedicated to herbal innovations, how do you see the market growing in India?

The herbal and naturals segment is definitely on the upswing and has tremendous potential. New players have entered this market, existing players are launching herbal product lines and there is an all-round increase in awareness for such products amongst consumers.

Today, Himalaya is registering a growth of over 20% at a company-wide level, and in specific categories like baby care and wellness, our growth is upwards of 50%. We believe this growth is here to stay because it’s fuelled by consumers making a conscious lifestyle choice and opting for gentler products.

Patanjali has rattled the segment. How do you see the competition increasing and what first-mover advantages does Himalaya have?

Competition is definitely on the rise with new companies entering the herbal space, especially in FMCG.

Himalaya has been in the herbal segment since 1930 and we have an 80-year legacy in developing herbal products. Our biggest advantage is our R&D. We have a 300-strong research team and one of the most advanced research facilities in India. We have taken the science of ayurveda and validated it with modern scientific research to develop products that are safe, gentle and efficacious. Our pharmaceutical products take anywhere between eight to 10 years to formulate while our personal care and baby care products take close to two to three years. We want to make products that endure the test of time and add tangible value to a consumer’s life.

We will continue to play to our strengths to stay competitive and relevant.

In the last decade, how has the brand redefined itself?

Himalaya’s transformation began in 2001, when we unified our portfolios under a single umbrella brand, Himalaya Herbal Healthcare. From being the ‘Liv.52’ company or being identified by our erstwhile personal care brand — Ayurvedic Concepts, we became a single entity Himalaya with products spanning pharmaceuticals, personal care, baby care and animal health.

While we entered the personal care segment in 1999, success came to us much later with the launch of our face washes. Today, we are the largest player in the face wash segment with close to 23% market share.

In 2007, we took a strategic call to promote our baby care products through the doctor prescription route and develop a wide portfolio of herbal offerings for babies. This business is growing by over 50% year-on-year. In 2015, we carved out a separate wellness division that offers a range of softer therapeutic and preventive care products for lifestyle ailments and healthy living respectively. Over the last decade and a half, we have moved from being a pharmaceutical company to becoming a holistic wellness brand.

How important is the e-commerce channel for Himalaya?

Very important. As smartphones become pervasive and the supporting infrastructure improves, a growing percentage of consumers are shopping online. Currently, our online sales are growing at 70% and we expect to reach Rs 100 crore by 2018.

To offer greater access to consumers, we have amplified our presence on e-commerce platforms, making our products available on popular sites like Amazon, Snapdeal and Flipkart. This has led to a 123% spike in our online sales. We launched our Himalaya store mobile app in May this year and are clocking over 300 downloads a day. Already 30% of the total transactions happen on mobile, and the interesting thing is 35-36% of the transactions comes from tier-III towns.

How does Himalaya plan to increase sales across all its verticals by 2020? What will be the marketing strategy?

Our aim is to be a billion dollar company by 2020. Presently, personal care is our biggest vertical and it contributes 42% of our total turnover, followed by pharmaceuticals at 32%, baby care at 15%, animal health and wellness at 4% each.

In personal care, we will focus on our key categories — face cleansing, oral care, hair care and lip care. Innovative and interesting communication will also help us drive growth in FMCG. We have rolled out a couple of award-winning marketing campaigns such as #HatethePimple for men and Muskaan for our lip care range.

In the baby care segment, the aim is to increase our presence in maternity hospitals and clinics, reach out to more doctors and expand distribution in stores and pharmacies. We recently entered the diapers market — a R3,000 crore segment.

The company recently ventured into the mother care segment. How do you see it strengthening the market share?

Every minute, 51 children are born in India. This means, we have 51 new mothers who need care and attention. Himalaya already has a strong presence in baby care and the entry into mother care felt like a natural extension. In the next two years, we expect the mother care business to contribute 5-6 % to our total turnover.

How has the male grooming segment grown in the recent past?

According to Euromonitor, the Indian men’s grooming market is projected to touch sales of R14,200 crore by 2020, up from R3,000 crore in 2010 and R7,500 crore in 2015, growing at a CAGR of 20%. FMCG companies are reaping the benefits of rising consumer sophistication. Today, men are choosing products developed specially for them. Consumption of men’s variants in categories like face washes, face creams and shower gels is on the rise. Future growth drivers for the male grooming segment include sun-protection products, anti-aging, lip care, etc.

How do you see partnerships with Royal Challengers Bangalore and Patna

Pirates enhancing the brand value among audiences?

‘Now’ is the new mantra. In an age of instant gratification, youth today prefer fast-paced things where action and results happen in a short span of time. This is the main reason for the popularity of shorter formats like Indian Premier League (IPL) and Pro Kabbadi League (PKL). On the back of this association, coupled with an innovative Pimple campaign, we have doubled our volume market share to 10% in the men’s face wash segment. After fruitful associations with IPL and PKL, we are now continuing our success run by associating with last year’s winner Chennaiyin FC team in ISL.

[email protected]

@meghna0101

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