Himalaya Wellness, which competes with players such as Dabur and Emami in personal care, is looking to expand its neem-based portfolio of products, a top official said in a conversation with FE. The move comes as the company eyes a bigger share from the neem segment, where it enjoys leadership with its flagship neem face wash, Rajesh Krishnamurthy, business director, consumer products division, India, said. The Bengaluru-based firm has just unveiled a new formulation of its flagship neem face wash, coming at a time when competition from D2C brands is growing.
“The neem face wash has been a pioneer in the skin care category for over 25 years. We’ve sought to address teenage concerns around pimples. However, with the Gen Z consumer evolving as lifestyles change, it was important to be in line with changing trends,” he said.
Responding to a new generation of consumers
The expansion of the neem portfolio will be undertaken in face care including face scrubs, masks and serums, Krishnamurthy said, as the company seeks to reinforce its leadership in neem. The expansion is also intended to encourage habit formation by building a “regime” around face care. Personal care companies in recent years have encouraged building what they describe as a regime or routine around face and hair care. For instance, in hair care, companies encourage users to go in for shampoos, conditioners and hair serums to improve hair health. Similarly, routines around skin care including using a face wash, cleanser or toner and moisturiser are increasingly becoming common, sector experts said.
Sector analysts say that new-age brands have drawn the attention of Gen Z consumers, prompting legacy players to reimagine their brands. Krishnamurthy says there is enough room for growth for new and existing players as categories such as face care and skin care remain largely underpenetrated categories in India. “If you look at face wash, for instance, the penetration is limited. There is room for growth over many years,” he says.
Himalaya Wellness derives about Rs 3,500-4,000 crore in annual turnover, according to sector analysts. Over 50% of topline comes from consumer products, which includes personal care, health care and baby care products. Neem-based products contribute to 20% of the overall business within consumer products, experts said.
Parallely, the company is expanding direct distribution, which currently stands at 800,000 outlets. The company reaches close to 1.5 million outlets in terms of total reach which includes direct and indirect distribution, Krishnamurthy said.
Strategic focus on omnichannel distribution
However, in line with evolving puchase behaviour, the company is also aggressively tapping quick-commerce, which gives the company about a third of its online sales. Online or e-commerce sales, Krishnamurthy says, contributes about 15% to total sales, while another 15% comes from modern trade and 70% from general trade.