Wipro, an old timer in FMCG space, is now getting its game plan on to strengthen its hold in this space. The company is reported to sharpen its brand positioning with its consumer care and lighting business’ plans to expand its range of products to detergents, energy drinks and fabric conditioners.
It is reportedly looking to enter into new categories under existing brands with its well-placed backend chain. Wipro’s key brands include Santoor toilet soap, Chandrika soap, Glucovita Glucose powder, Northwest Switches, Bio Essence skincare brand and Yardley among others.
Jagdeep Kapoor, brand guru and Chairman and Managing Director of Samsika Marketing Consultants thinks it’s sensible for Wipro to move its focus back to FMCG as it’s needed.“It makes sense to intensify FMCG as both IT and FMCG can grow simultaneously. With brands like Santoor in its kitty, it understands this space. There is so much scope of growth in FMCG segment because many of the categories are hardly penetrated. There are some 8100 towns and 6.5 lakh villages in India. It's time someone catered to those consumers.”
N Chandramouli, CEO, TRA, agrees, “Wipro will definitely do well as they understand the Indian consumer in terms of FMCG concepts. They have done it from 60s. They have old well-vested brands like Santoor and Chandrika. That's one major area they will see growth in the years to come.”
Harish Bijoor, Founder, Harish Bijoor Consults Inc shares his take, “Wipro is one of the older companies in this space. As far as their existing products goes they have done decently well in the market. Future is looking for variegated options from marketers.”
Wipro’s entry to new categories will bring it more opportunities of line and brand extensions if done sensibly, as pointed out by Kapoor.
He says, “If they are able to reach out and preach out across these 8100 towns and 6.5 lakh villages, build their brand loyalty (which they already have), then leverage the existing categories and spread out to new ones then it can be a big and growing business. There’s huge opportunity over the next few years for Wipro.”
Of acquisition and distribution
The Rs 5,900-crore Wipro Consumer Care made headlines last year in the global FMCG space with its acquisition of Chinese personal care maker Zhongshan Ma Er Daily Products, its tenth in a decade. It's the firm’s second biggest buy-out since it bought Singapore-based Unza Holdings for $246 million in 2007, as per media reports. In fact it has given it captive market share in shower products and liquid detergents. It has identified China, the Middle East and Malaysia as some of its key strategic markets.
Chandramouli feels with this acquisition, the firm will have an upper hand, “They are not looking at China as a low-cost manufacturing base but also as market. They already have manufacturing facilities.”
On the other hand, Bijoor thinks it will not make much of an impact. He explains, “Mere acquisition don't matter in India because you can build a brand from scratch and make humongous success of it, for example Ujala, Ghari detergent and Nirma.”
Both Kapoor and Chandramouli feel Wipro has an upper hand with its distribution chain.
Bijoor, however, is 'not excited about Wipro’s fantastic logistics’ as he gives more importance to front end of the marketing. He explains, “This is because consumer brands are built on consumer proposition which are front-ended brand proposition.”
Stir up the competition
With the Wipro Consumer Care set to take on other FMCG giants like HUL and P&G with its product diversification should the latter two watch out? Kapoor thinks given Wipro’s goodwill, it ‘can give a run for money to anyone.’ He points out, “Other players should watch out for Wipro.”
Chandramouli points out that Wipro should change its branding strategy to create an impact, “They should look at more aggressive branding opportunities nationally. They need to select brands (which give them maximum revenue in small geography), take that and build it up to a national brand.”
Bijoor feels otherwise, “It's another FMCG marketer joining the ranks and doing exactly what they are doing. It (Wipro) will only become a threat if it brings a unique proposition. That’s how it can stand out. At this point in time I don’t see Wipro bringing that to the market.”