Health, immunity and nutrition-based products registered a massive uptick during the pandemic and brands realigned their marketing strategies to meet consumer needs. Cipla Health, owner of products such as Nicotex, ActivKids and MamaXpert and Maxirich, aims to become a`1,500-crore corporation by 2025. To that end, it is expanding its direct and indirect distribution channels while looking at widening its basket of offerings. In an interview with Akanksha Nagar, Shivam Puri, CEO, talks about how the digital channel helped the brand build visibility. Edited excerpts:
The company has 12 brands across 10 categories including cold and cough, smoking cessation, gut health, feminine hygiene, pain relief, and skincare, among others. Which ones have been the fastest growing among them?
Brands including Nicotex, Cofsils, Omnigel and Cipladine are pretty large today in terms of size. Health supplement brands Maxirich, Evexpert, or the recently acquired Endura Mass are becoming significant contributors to our journey. The core brands Nicotex, Cofsils, Prolyte, Omnigel and Cipladine are expected to be $95 million by the end of this fiscal and $165 million in three to five years. For us, the wellness market is the right space, and all categories within this interest us. We would be investing across all of them. Even if a consumer is choosing homemade or ayurvedic products, we will look at their unresolved issues and resolutions. We would like to offer more evolved solutions than what home care affords.
The health and wellness category saw a massive uptick in demand during the Covid months. How successful were you in converting that challenge into an opportunity?
The consumers face a multitude of challenges today; therefore, the job of the brand should be to offer a sense of comfort, a sense of belonging, a sense of safety and security. Every one of our brands has a very different tone of voice. We incorporate both functional and emotional appeal in our communication. The job of communication is to share the brand story with the consumer in a way that they understand.
In terms of advertising spends, while it’s a mix of both traditional and online, at a macro level, the idea is to keep bringing in efficiencies of scale on the media outreach. Going forward, our spends on digital will continue to increase and that is again driven by the reach that digital has started offering advertisers.
Going forward, would you also look at the D2C channel to reach out to consumers directly?
D2C is one of the ways of reaching consumers, and eventually all successful brands need a good mix of online and offline distribution to be able to reach consumers. There are no very large D2C-only brands in this space – it has to be an omnichannel play. We are always looking at ways of growing either through organic means — that is, expanding our current products into newer geographies, more extensions on existing brands — or through inorganic means where interesting brands could come in. In the overall health and wellness space, with inflation ruling high, one can expect consumers to slightly down trade, especially in tier-II, and III towns. Lower price points are becoming slightly more relevant. But what is here to stay is the importance consumers attach to health and hygiene. As long as we can keep doing a great job and answer consumers’ needs as they change, we can overcome the challenges that our external environment potentially might throw at us.
The company has grown almost five times in the last three years when the effect of the pandemic was felt on consumer demand across categories. What will drive Cipla Health’s next wave of growth?
The biggest enabler for us is the legacy of Cipla — which is one of trust, care, and scientific expertise. Our portfolio spans 12 categories so we have a wide OTC play. We have built an engine that allows us to create disruptive products that make a real difference to the consumer. Products have to make a real difference to the consumer, which is when they win.
Expanding distribution to reach out to more consumers would be one of the other growth enablers and small towns (tier-II to VI) will have an equally important contribution in that. The needs and aspirations of smaller town consumers are no different from consumers in metros. So, the idea would be to bulk up our channels in smaller towns to ensure we are where the consumer seeks us. We already reach small towns pretty successfully with many of our brands, but yes, India is such a vast country that there is always that much more one can do.
We reach one and a half lakh chemists directly and another five lakhs indirectly. We have to leverage other channels as well including e-commerce and e-pharma platforms. In the long term, we are looking at a double-digit revenue contribution from the online channels. We already have an omnichannel play and for every SKU, the idea is to go and leverage the best route to reach the consumers.