In what could be the biggest celebrity endorsement of Indian Inc, LG Care, the fast moving consumer goods arm of the Korean chaebol, is roping in 21 film personalities to promote its range products in India.
Each personality would be promoting two to three categories. LG Care has so far introduced seven product line viz. detergent, toothpaste, soap, diapers, shampoo, hair styling products and cleaners.
The company has lined up an ad budget of Rs 30 crore this fiscal to establish its brands in the fiercely competitive FMCG market. It will also spend another Rs 5 crore on celebrity endorsement to begin with.
The entire budget is quite substantial given the fact the company is expecting only Rs 150 crore turnover in the first year of operation.
In the next three years, the company intends to pump more than Rs 100 crore into the Indian market for promotion.
Even as FMCG sector has seen large number of Bollywood personalities endorsing personal care products, LG’s deal would be the largest in number.
“We will be very aggressive in marketing and promotion,” Vijay R Singh, managing director of India Household & Healthcare Ltd, the sole licensee of LG FMCG items in the country, said.
Singh, however, was unwilling to spill the beans fully. “We are in an advance stage of negotiation with them and deal would be signed very soon,” he added.
The company pointed out the success of it products would depend on its quality and packaging and not by riding piggyback on celebrities.
“They will only provide the softer touch to products without which an item may look lifeless,” Singh added.
Even as the company starts its assault on established player like Hindustan Lever (HLL) and Proctor & Gamble (P&G) it is not expecting to make any profit for the next three years.
“India is fiercely competitive market where volume is growing but sales value shrinking. But we believe our strategy of umbrella branding, distribution network and promotional campaign will pay off,” he added.
The import duty on LG products is 56 per cent. Unless it starts manufacturing here, company would not be able make profit.
It is looking to achieve sales of Rs 300-350 crore before taking a call on setting up manufacturing base in India. LG is now bringing all its products from South Korea.