Chemist network to push Godrej brands

Written by Vishakha Talreja | Rajat Guha | Rajat Guha | New Delhi | Updated: Jun 28 2010, 07:16am hrs
After Operation Big B that roped in barbers across cities, FMCG major Godrej Consumer Products has set its eyes on neighborhood chemists. With its Operation Big C, the company is looking at building a distribution network of over 1 lakh chemists by re-branding them, bundling products and offering discounts. The revenue model will be on the lines of Operation Big B, with chemist shops being offered higher margins.

A Mahendran, MD of Godrej Consumer Products, confirmed the launch of Operation Big C. We are looking at revamping our distribution network and at re-staging of brands. Our initiatives will result into a sea-change in distribution process. We are eyeing a growth rate of more than 20% in our personal and household product category, he told FE. Mahendran, however, refused to give out details of the proposed distribution network with chemists, citing competition reasons.

For 'Operation Big B', the FMCG major strengthened its network by roping in over 50,000 salon shops, to boost sales of its shaving cream and hair colour brandsGodrej Expert, Renew and Colour Soft. The strategy was to bundle products in a 'super-saver salon pack' and sell them at around 50% discount to salons and barber shops.

This time, it will be pushing various OTC (over-the-counter) products and brands that it has in it's kitty- Godrej Hair Dye, Snuggy (dry diapers), Protekt (instant hand sanitizer), Vigil (health soap), and insecticide brands like HIT and Good Knight, besides it's popular toiletry brands such as Cinthol and Godrej No 1. However, only dealer push is not enough, consumer pull is important too, adds Mahendran cautiously.

Godrej Consumer Products Limited is the second biggest FMCG company in India, next only to Hindustan Unilever. GCPL stock is currently selling in the range of Rs 342-345. Industry experts view that the company will grow at about 20-25% in the coming fiscal. The company expects revenue of Rs 4,000 crore in the coming financial year as a result of the acquisitions, according to a recent company statement .

Although Hindustan Unilever remains a market leader in several segments in India, it seems to be slowly losing its market share to Godrej, which has slightly less expensive products. Moreover, profit margins of Godrej products are significantly higher than those of HUL's. Godrej has been aggressive in its expansion plans with its recent acquisitions of Issue Group (hair colour) in Latin America, Tura Brand in Nigeria, Megasari Group in Indonesia, remaining 51% stake in Godrej Sara Lee (an erstwhile joint venture) and Argencos (hair styling cream) in Latin America.