On the back of the weak winters witnessed in the December quarter, RSH Global, parent of homegrown personal care brand Joy, will miss its revenue target of Rs 600 crore in FY24. The company will close the fiscal at Rs 575 crore, Sunil Agarwal, chairman of Joy Personal Care (RSH Global), told FE.
“Winters were very weak in the initial stages of October and November, when the real sales happen from our side, and also in December and January—the peak months for consumption. Hence, a lot of stockings didn’t happen at the dealer distributors. Winters suddenly came after December and it was very harsh, but by that time, people had lost faith in the winter and hence we got two rotations short out of the three months of winters in India,” he said.
Despite the seasonal challenges, Agarwal said that as the personal care industry (estimated to be close to Rs 20,000 crore) in India continues to grow at around 8% to 10% on the back of premiumisation, the company has been growing twice the industry growth (20%) year-on-year for the last six years. For FY25, the Kolkata-based firm is looking at Rs 750 crore revenue growth and is in line to become a Rs 1000 crore company by FY27— where new-age masstige (premium) products will contribute upwards of Rs 200 crore, he said. The target growth will primarily come from the expansion of its premium offerings, increasing online and offline reach and enhancing its manufacturing capabilities.
While the company mainly operated in the mass or affordable segment of the market since its inception, it has done ‘some strategic premiumisation’ in the last few years. Agarwal said, “For a mass brand, it is a gradual process. For our three core categories: skincare, moisturisers and face washes, we already started doing a little bit of movement towards a bit of premiumisation with the introduction of value-added products.” Today, around 10% to 15% of its business comes from this mass-premium offerings segment, referred to as ‘masstige’ by the company. “Being a mass brand, we don’t aspire to be a very high premium brand. It’s not that the entire country is moving towards premiumisation, hence mass products will continue to have demand in a country like India, especially in smaller geographies. While some premiumisation is happening from our end, we don’t want to lose our existing customers,” he said.
The company continues operating its business out of North (contributing 47% to its domestic business), West and East and will further increase its offline footprint in these zones. With a direct reach of one and a half lakh outlets and an indirect reach of ten lakh outlets, it aims to take it to around five lakh outlets and 25 lakh outlets respectively, over the next three years. At the same time, it is also increasing its online commerce play — which, at present, is around 10% of the business and is set to grow to 20%.
In line with the target, the company is focusing on increasing its efficiency in its core markets and categories. To drive further penetration, RSH Global for Joy this year, also launched smaller SKUs (stock-keeping units) of its sunscreen at Rs 99 for 18 ml. Having put an upper cap, the company doesn’t do more than 30% of its business from the small-sized SKUs, Agarwal mentioned.
With a current capacity of around 13,000 tonnes annually from two of its manufacturing units in Baddi, Himachal Pradesh, RSH Global has invested around Rs 80 crore in its new and third capacity, which will start its operations in July this year and is set to have an additional capacity of more than 30,000 tonnes. Expanding its international business, the company has set its eye on the Philippines, the USA, Saudi Arabia, Russia, and Nigeria, which, put together, will contribute around Rs 150 crore of business by FY27.