Leveraging India Internationally

Marico Experience

Introduction
FMCG Company formed in 1990 :
-

With 2 Brands : Saffola & Parachute

In 15 years : INR 100cr to 1150cr

All sales through branded products and

services

Marico Builds Brands ...

Downstream Value Addition :
Consumer End - Branding, Product, Packaging
V/S
Upstream Value Addition :
Lower Costs IT & BPO

The Business
Hair Care Pre & Post Wash
(In India and Abroad)

The Business.
Skin Care

Customised Solutions :
Through KAYA Skin Clinics

Sundari

Global Ayurvedics

Business acquired in US in 2003

The Business.
Wellness

Healthy Cooking Oil, Blends,

Salt, Functional Foods

Characteristics of FMCG Business

1. Low Capital Needs

2. High Branding Costs
3. Distribution : critical to success
4. New Products : Failures 8 out of 10 Launches
5. 3 to 5 years to break-even, if successful
6. Global Brands & MNCs in large segments
7. Be Distinctive & Unique to succeed

Maricos International Journey.

How Did It All

START ?

Maricos International Journey.

It all started with smuggling

Maricos International Journey.

Export of Coconut Oil was prohibited.

Marico had then lobbied to get export allowed.
Thus started a new business in the early 90s.

10

Journey driven by....

Indian- Centric- driven by :
Access to Clusters of Indian expats
- Gulf, US, Canada, Singapore & Malaysia
Common Media Footprint
- Gulf, other SAARC Countries
Common Ethnicity/ Hair Oiling habits
- Bangladesh, Nepal, Pakistan, Bhutan
11

The Mechanics....
Used Distributor Model to enter countries
Appointed Distributors in Gulf, SAARC
countries, US, Singapore / Malaysia etc
And then onto . Brand Building in the
markets abroad
Spread the Brand : PARACHUTE
12

Where we have reached.

Direct
Bangladesh
UAE, Saudi, Oman, Qatar, Bahrain, Kuwait,
Yemen, Lebanon, Sudan,Syria, Jordan
Pakistan, Nepal, Bhutan
US, Canada, Australia
Singapore, Malaysia, Indonesia, Myanmar
Kenya
Planned : African countries
Indirect
Several where ...Parachute is available
through wholesale trade channels

13

How it has progressed....

IBG sales
180
160
140
120
100
80
60
40
20
0

161
116
80

12

16

21

35

46

96

63

FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07

International turnover in INR cr

FY07 figs Plans

14

Marico in the Middle East

15

Started with Oils Indians in Gulf...

Parachute Gold - unique positioning.
Parachute Lite for easy grooming & UV protection.
Parachute Jasmine : perfumed coconut nourishment
with conditioning.
Parachute Sampoorna :
value added CNO with
hibiscus, almond etc for
complete nourishment

16

To Value Added Hair Care

In Modern Formats
Customised to suit Locals...
Parachute CREAMS
Parachute HAMAM ZAIT

17

Using local ads local celebrity

Local Events
Displays

18

The Result :
Middle East Sales in INR cr
SALES
70

60

60
50

43

40

34

30
20

24
14

17

FY02

FY03

10
0
FY04

FY05

FY06

FY07(E)

Parachute Creams are the largest selling within the basket ...

19

The Learnings...

No Escape Buttons Separate Structure

Non-Core business for MNCs, Grab Market Share

Local Insights Product Development

Locally developed Advertisements and Marketing

Experience Dealing Modern Trade

For people : Opportunity Posting Outside India/ Travel

20

Marico in Bangladesh

21

Bangladesh
15 years behind India
Started Market Expansion in 1995
Large Coconut Oil Market
Dominated by Local Brands

22

The Parachute Journey....

Leveraged :
1. Plastic Packaging with flip top caps
attractive, convenient, economical
2. Wide Mouth Jars All weather pack
3. Mini Bottles
Distribution using Information
Technology
Superior Localised Advertising
Superior Sales Promotions

23

The Parachute Journey....

Started with very low margins
On gaining critical mass :Set up Subsidiary & Backroom Operations
Set up our own factory
Today ..
The largest Indian Company in Bangladesh

24

Going Beyond Oils

Acquired Two Soap Brands 2005

25

The Results :
Last 5 years(fig in Tk Crores)
SALES
180
160
140
120
100
80
60
40
20
0

156

99

34

FY02

46

FY03

58

FY04

73

FY05

FY06

FY07(E)

26

Parachute in Bangladesh: MS %
60%

50%

40%

30%

20%

10%

0%

PCNO MS

00-01

01-02

02-03

03-04

04-05

05-06

15%

24%

33%

42%

47%

55%

MARKET SHARE > 55%

Awareness
89% Total awareness level- 95% in urban vs. 79% in rural
42% TOM awareness across Bangladesh

27

Further Geographical Expansion

-

Limited by hair oiling habit

To leverage
- Indian Habit
- Food
- Raw Materials like spices, Indian coconuts
- Science Ayurveda
- Any other source of competitive advantage

28

Developed Countries
-

Highly cluttered Saturated

Different Distribution

High Cost Entry

Dominated by MNCs
Decided to create brand through an
experience route

29

Sundari
-

Acquired Brand
Built on Principals of Ayurveda

Changed Focus
Store to Spa Brand

Catering to Resorts
Destination Spas

Developed Protocols & Training

Shiro Dhara, Marma Points

Appointed Distributors in Asia Pacific

30

Sundari (Contd)
-

Four Seasons
Mariott, Canyon Ranch, Oberoi, Westin

Huge Learning Curve

B to B Marketing

Long Lead Times to get entry

Niche Brand

31

Kaya 2003
-

Customised
Solutions for Skin

Problem Normal
and Anti-Aging
Skin

Dermatologists
Key Differentiator

Medi-Spa-Zen like
Ambience

Launched Hair
Services
32

Kaya ME
-

Unique Business Model

No-Chain Internationally Leveraged

doctors / skin practitioners
2 in Dubai
1 in Abu-Dhabi

Un Clear Regulations

Plan expansion other GCC Countries

33

Going Forward - Next 3 Years

1. Expand GCC & Bangladesh
Wider Product Basket
2. New Countries
Leverage Hair Care Products
3. Expand Kaya
GCC Countries and Beyond
4. Sundari Europe
Increasing Scale
5. Growth through Organic / Acquisitions
Route

34

Benefits Beyond Top/ Bottom Line

1. Career Paths in Different Business
Outside India
2. Leveraging Technology Across
3. Learning Marketing and Distribution
4. New Ideas Domestic Business
5. Common Advertisement mediums e.g.
Kerala / Gulf

35

We are passionate about

India Advantage
&
Uncommon Sense
Global Players in healthy living
through distinctive solutions, largely
leveraging India advantage.
36

Thank You

37