After 40 years in the business, the Chennai-based TTK Group had to start from scratch in the condom industry. It has, however, almost regained its lost market and has climbed to the number two position in a short span of six years.
After 40 years in the business and being market leaders, the Chennai-based TTK Group had to start from scratch in the condom industry. It has, however, almost regained its lost market and has climbed to the number two position in a short span of six years.
The TTK Group introduced condoms to the country way back in 1948. The very first condom brand that hit the market was Durapac, which was later known as Durex. The group entered into a distribution arrangement with the London Rubber Company (LRC) of the UK, and then got into a joint venture with the UK company, to manufacture condoms. The company was named TTL LRG when LRC changed its name to London Rubber Group—LRG was later renamed London International Group (LIG).
This was a pioneering venture in many ways. The group contributed a lot to the family planning programme of the government (goo.gl/S9YFV7). It was during the Second World War—with troops landing in India from the West and Africa—that the group tied up with LRC to distribute condoms. When it decided to start manufacturing condoms, the group faced many challenges. It was not easy to get a licence as the government did not consider family planning a priority. A committee that had been set up to figure out how to control India’s growing population did not think condoms warranted manufacturing in India.
After many struggles, the TTK Group got the licence. Says TT Raghunathan, the CEO of TTK Healthcare Ltd (the group company that manufactures and distributes condoms), “We have spearheaded many revolutions in the condom industry. Be it establishing the country’s first condom manufacturing plant in 1963 or installing the first electronic testing facility, or even introducing India’s first non-subsidised condom in 1974, we have always been at the forefront in bringing new technologies, new products and new expertise to the condom market”.
The Kohinoor brand, which was launched in the 1970s, became the top seller and a market leader. It ruled the market for 40 years. Coloured condoms called Fiesta were introduced to the market, again a first time in the country, with advertisements bordering on the risqué. The group, known to be publicity shy, has always brought out fun campaigns to sell its condoms. It has had no inhibitions.
It started manufacturing the global premium brand Durex from 1997 for both the local and export market. TTK took care of 40% of Durex’s worldwide demand. LIG had shut down its European factories, as Indians were rolling out quality products with various international accreditations. The joint venture partner LIG sold out to SSL international in 1999. The new partner and TTK continued to have good relations and Durex continued to be manufactured in Indian factories.
This happy story came to an end when SSL was taken over by Reckitt Benckiser, a global conglomerate. Reckitt Benckiser became TTK’s joint venture partner. It was dislike at first sight between both parties. Reckitt Benckiser wanted to rework the terms of agreement of the joint venture, which was very unfavourable to TTK. After a court battle, TTK bought out Reckitt Benckiser’s 49.8% shareholding for Rs 150 crore. The problem was that the company got the factories and technology, but did not have a product and brand. Reckitt Benckiser got the Kohinoor and Durex brands. This was in November 2012.
The company was down but not out. “We had a plan B. It was getting pretty obvious that we will lose the brands. We had started working on a new brand a few months before the judgment was delivered”, says Raghunathan. After the initial disappointment, the company went all out to build its own brand without a joint venture partner. The chosen name for the brand was Skore. The day TTK lost Kohinoor and Durex in the court, it launched Skore.
By 2015, Skore was the third largest selling brand. Delhi-based Manforce and JK Group’s Kamasutra were ahead. Skore is currently the second largest brand in the country in the commercial condom category in both volume and value terms. Skore is bigger than Kohinoor and Durex combined. This is according to the retail audit conducted by AC Nielsen in the first quarter (January-March 2018). The volume share is 10%. Skore is the also the single largest brand in the south zone, with 20% market share. Says Vishal Vyas, general manager, Marketing, TTK Protective Devices, “We have always believed in producing top quality condoms. With our long years in the business, we understand the condom distribution channel. We know where condoms are sold, how they are sold, and who sells them”.
Skore focuses on the young population in metros with advertising that is fun, says what it has to say, but never crossing the line. “Our communication is disruptive, noticeable but always engaging. Skore has been innovating constantly. We have launched unique variants, condoms with free disposal pouches and so on.”
Condom market in India is complicated. There are branded players—those who supply to the social sector (the government and NGOs), and the grey market known as Indian-made foreign condoms (IMFC). TTK’s biggest rivals are Manforce, which was eating into its share around the time the problems with Reckitt Benckiser erupted. Manforce is the market leader—it took its market share from IMFCs.
“We never lost volume and I did not want to discount my product. I would rather be in niche categories where I am a dominant player. In spite of a glut in the world market, we get export orders. Reckitt Benckiser itself is coming back to us to manufacture their condoms. We have maintained world-class quality standards with proper documentation”, says Raghunathan.
According to NHFS 4 (National Family Health Survey-4, 2015-16), condom usage is only 5.6% in India. Government purchases started declining since 2010. There is a vast untapped potential in the condom market. With higher incomes and lifestyle changes, there is an increasing demand for quality branded products. It is this market TTK hopes to tap.