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Anticipating a slowdown in rural demand, Marico has decided to launch male deodorant brand ‘Zatak’ in the rural market.
Chaitanya Deshpande, Executive Vice-President, Marico, said, “Lack of monsoons could have an impact on agricultural incomes and we could face the prospect of a slowdown in the rural markets. In the remaining quarters we will not be witnessing continuous growth in the rural markets like we have done in the first quarter.” Marico witnessed 26 per cent growth in the rural markets compared to 20 per cent growth in the urban markets in the first quarter this year.
Introducing more affordable brands in the rural markets is going to be the way forward to sustain growth levels there.
“Since Zatak has got a mass market pricing in the male deo category, we will be taking it to the smaller towns and rural markets. The rest of the acquired brands of Reckitt Benckiser such as Set Wet and Livon are mainly for the urban markets,” said Deshpande.
Currently, it is mainly Parachute and the value added oils which have a significant presence in the rural markets.
“In the past two years we have invested time and effort in rural markets and today we have 8 lakh outlets in this market. We have been trying to increase the penetration and frequency of coconut oil and also get converts from loose to branded oil,” he said.
Dropping prices is also going to be another way to maintain volumes in a slow market. Addressing an analyst call, Saugata Gupta, CEO, Consumer Products Business, said, “Parachute has been growing at 18 per cent and recently we have dropped prices by Rs 2 for the 50-ml pack. We do not want the consumer to feel uncomfortable when shifting from loose to branded oil.”
Meanwhile in the urban market, slowdown has impacted discretionary spends. Considering Kaya (Marico’s skin care clinics) has yet to break even, it has decided to launch smaller stores to ramp up its retail presence. “We are looking at new formats of 500 sq ft which will be product heavy. The new prototype will be a sub brand of the existing Kaya Skin Care outlets,” said Ajay Pahwa, CEO, Kaya.
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