We are increasing focus on rural distribution and e-commerce: Amit Burman, Dabur
The newly appointed Chairman of Dabur India talks about the strategies the brand has adopted to bounce back in the market
Consumer products manufacturer Dabur India has shown steady growth this year after facing a tough competition from Patanjali in the past. During 2017-18, the sales of the brand were impacted due to various factors such as intense competition, low demand and demonetisation. While the industry has been showing definite signs of slowdown, Dabur has managed to report strong growth across its key businesses.
Amit Burman, who has been recently elevated as the Chairman of Dabur India Ltd, spoke to exchange4media on what strategies the brand adopted to bounce back in the market.
Burman attributes this growth to three factors--expansion of their rural footprint, invetsment in some key brands and focus on e-commerce.
"One of the factors is our decision to invest in expanding our rural footprint. We have increased our rural coverage to 48,000 villages in Q1 from 44,000 villages in Q4 last year. This has helped rural grow at a much faster clip for us as compared to urban in Q1. Then, we expanded the product basket in rural and added more low unit price (LUP) packs,” says Burman.
The second factor is the company identifying some key brands in each vertical that are showing strong sales, such as Dabur Amla Hair Oil, Real Fruit Juices, Dabur Vatika Shampoo and Hajmola tablets. “We have been investing disproportionately behind these brands, which has helped us gain market share. This has paid rich dividends, with these brands growing at strong double digits,” he adds.
The brand has also increased its focus on healthacare and believes the sector will be the key driver of growth, thus introducing a new strategy for it. “We are identifying 3-4 smaller healthcare brands and investing behind them to scale them up and bring them to the Rs 100-crore turnover level,” informs Burman.
Products such as Honitus, Lal Tail and Pudin Hara are the first three brands that have been identified under this strategy. “Investments are being made both in terms of higher media spends and innovations. We will now also be rolling out newer formats in each of these brands to drive growth. We have already started seeing the results with each of these brands growing at strong double digits over the past year. These efforts together have helped us report good growth and gain market share,” he shares.
According to a media report, in the Rs 1,200-crore organised honey market, Dabur Honey’s share dropped to almost 40 per cent a year after Patanjali’s entry from about 60 per cent three years ago. It has since recovered to around 54 per cent now. In chyawanprash, Dabur’s share, which had slipped to 58 per cent in 2016, has returned to over 60 per cent.
In the recent time, the brand has taken up an initiative called ‘Project RISE (Regional Insights and Speed in Execution). The initiative seeks to capture regional market opportunities. It is launching region-specific products and variants suited to the local consumer preferences.
“We have reported around 30 per cent growth in revenue in the Northeast cluster. This region continues to throw up many more opportunities of growth and expansion,” reveals Burman.
When asked, how will Dabur maintain its market shares in the crowded FMCG space, Burman replies, “We will introduce new products, formats and LUP packs to drive deeper into the rural market.”
The company’s another target is to focus on the e-commerce channel.
“We are increasing our focus on the e-commerce channel, which though is small today, but growing at a fast clip. Brands in categories such as health supplements, juices, hair oils, oral care, baby care and home care products have a good traction on e-commerce platforms,” says Burman.
“In order to tap the opportunities in online retail, we have put in place a specialised team equipped with the relevant skills. The team is engaging with each of the e-commerce platforms to enhance visibility and build customer engagement,” he shares.
Meanwhile, talking about Dabur’s growth, media veteran Anita Nayyar, CEO, India & Southeast Asia, believes it is a classic case of being focused.
“Dabur has concentrated and worked hard on gaining its market share in the categories it had lost. One such example is honey. On the other hand, Patanjali spread itself too thin and worked on doing too much too soon. Brands build over a period of time and their benefits and purpose ensure consumer interest and loyalty. That’s what Dabur ensured.”
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