The country?s fourth largest fast moving consumer goods company, Dabur India Ltd, is looking at expansion of product portfolio in categories like skincare and homecare. In the haircare category it is growing in double-digits. Like for most FMCG companies, Dabur?s growth thrust has come mainly from rural markets and in the mid segment category. In an interview with FE?s Kakoly Chatterjee, Dabur India Ltd?s CEO Sunil Duggal discusses the company?s future plans and thrust areas. Excerpts:

•Amongst the personal care products that Dabur has, which category is doing well? What is your market share and ranking in this category? What is the size of the hair care market in the country and what is your market share?

Haircare (both hair oils and shampoos) and skincare are the two categories that Dabur operates in today. Both these categories are high performers for the company, growing in double-digits. In the shampoo market, Dabur is the fourth largest player with close to 7% market share and Vatika is the fastest growing brand in the market. In hair oils, Dabur is the second largest player with an over 18% share. Dabur Amla hair oil commands 72% in the amla-based hair oil category. The haircare market in India is estimated to be worth Rs 5,500-6,000 crore, which includes, hair oils, shampoos, conditioners, creams and gels.

•Which is the personal care category where you need to make your presence felt?

Skincare is one segment where we do not have a sizeable presence yet. We are planning to launch a new Ayurvedic skincare brand during FY10. Last year Dabur had introduced moisturising cream, moisturising lotion and face freshener spray under the Gulabari brand. Besides, the company is also planning to extend new skincare products under the Fem brand. Our skincare portfolio has reported an over 40% growth in FY09 with the launch of Gulabari range.

•How is the homecare product category growing? What is your market share and are you planning to expand your portfolio in this category too?

The homecare market in India, which includes mosquito repellents, air fresheners and surface (floor, toilet and kitchen) cleaners is estimated at around Rs 3,000 crore, and is growing at around 15%. We have now expanded this portfolio with the launch of Odonil gels, besides relaunching blocks and easy-to-use sprays. In the mosquito repellent market, Dabur operates in a relatively smaller cream sub-segment with Odomos, which commands 90% of market share.

•FMCG companies do not have brand ambassadors for all the products in its portfolio. What are the factors that help you to decide a particular product needs a brand ambassador?

While celebrity endorsement helps in creating top-of-the-mind recall, what?s most important is how a brand uses a celebrity. It?s only then that the brand-connect happens better. Appropriately using a celebrity can be a highly powerful tool that magnifies the effects of a campaign. Celebrity endorsements surely help in magnifying a campaign, but what needs to be remembered is that celebrity endorsement is a means to an end and not an end in itself. A celebrity is generally used to impart credibility and aspirational values to a brand, but the celebrity needs to match the product.

Dabur Chyawanprash is a classic example where the product and the brand both stand for health and fitness. So, the brand and the concept are completely in sync with Dhoni?s personality. Dhoni is considered as completely rooted and earthy, same as Dabur Chyawanprash. Similarly for Zaheer?s endorsement of Dabur Glucose, where there is a great connect between the celebrity and the brand?s properties.

•What was the reason for you to revamp your sales force?

In order to create a greater bandwidth to beat any potential slowdown in the market, Dabur has recently divided the sales team into three focus groups–home and personalcare; healthcare and foods. Christened DARE-2, this new strategy is being rolled out in the current financials across 100 key markets.

•Right now which is growing faster for FMCG companies–bottom or top of the pyramid? Any change in trend in the current scenario? If so, why?

There may have been some contraction in demand at the top-end of the market, but in the mass market–where Dabur operates–the demand continues to be strong, both from rural and urban markets. There has not been any drop in demand for mainstream consumer products that are priced at popular price points.

•What are the measures that you have adopted to keep your costs low?

Controlling costs in a highly inflationary market–as was witnessed in the first half of the 2008-09 fiscal–has been one of the biggest challenges for any company, including ours. We effectively tackled this challenge on the strength of our strategic futuristic planning, calibrated hedging mechanism and e-sourcing initiatives. We engaged in forward cover on future exchanges for non-essential commodities, which helped protect our margins. Participation in the futures exchange helped us adequately prepare against inflationary trends in the market. Besides, Dabur also enhanced its activity on this front by participating on international exchanges through our Dubai-based international business division.

•FMCG companies are till now not so much affected by the downturn, but do sense any trouble for them in future? Which element of your business puts maximum pressure on your margins?

To begin with, we have not witnessed any drop in demand for mainstream consumer products that are priced at popular price points. There may have been some contraction in demand at the top end of the market, but in the mass market?where the company operates?the demand continues to be strong, both from rural and urban markets. The rural markets have, in fact, grown at a faster pace in 2008-09 fiscal. And we see growth momentum continuing now, unless monsoon plays spoilsport.

The rising commodity prices in the earlier part of the year had put the margins under some pressure, which was managed through a mix of intelligent sourcing of raw materials and judicious price increase. With the easing of commodity prices in the latter part of the fiscal, we are now witnessing margin expansion, which is expected to continue.