FMCG major Marico, which enjoys close to 25 per cent share in the ₹8,000-crore value-added hair oils (VAHO) market, is looking to aggressively grow its market share over the next 2-3 years, backed by new product launches and ramping up of its distribution.
According to Somasree Bose Awasthi, Chief Marketing Officer, Marico, the growth in the value-added hair oils segment took a beating in volume terms in recent times due to high inflation. However, recovery in growth has begun, and the company is hopeful of gaining market share in the next 2-3 years. The company holds more than 30-35 per cent market share in the VAHO segment in volume terms.
“It [growth in VAHO segment] did struggle a bit in the middle due to inflation……but growth recovery has begun. In next 2-3 years, our aspiration will be to gain share and to be aggressive on that,” Awasthi told newspersons on the sidelines of a press conference to announce the launch of its new campaign featuring Alia Bhatt here on Friday.
No price cuts
In an earnings call transcript post the fourth quarter results, Marico had said that value-added hair oils delivered double-digit growth after subdued growth in the last five quarters. Value growth in the VAHO portfolio was in mid-single digits on a four-year CAGR basis on account of the extended slowdown in rural and also affected by some other issues in terms of commoditisation. While mid and premium segments continue to fare better, with lower inflation and reduced proclivity of competition to commoditise the category, the company expects the recovery in growth to be more broad-based, it had said.
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“Rural growth had been tempered due to inflation but with expectation of inflation inching down and monsoons picking up we expect rural markets to pick up,” she said.
The company, which did not take a price hike when the commodity prices increased and reduced the grammage and pack sizes to stave off higher raw material costs in the past few quarters., is not looking at any price cuts now that the cost is moderating.
“We did not go for price increase but cut down on volumes now we are retaining that volume and we will be investing on more variants,” she said.
Product launch
Marico, she said, will look to launch products tailor made to consumer demands in specific markets.
“We will be launching one product targeted for certain south Indian markets in the next few days. We are also planning to go for another product launch. For every region we are looking for what benefits the customer is seeking,” she said.
According to her, value-added hair oil segment is well penetrated across the rural and urban markets with each of these contributing equally towards sales.
One of the key strategies for Marico would be to ramp up distribution and ensure that its products are made available.
Modern trade and e-commerce together account for nearly 13 per cent of its total sales and it is looking to up its play on all channels to ramp up sales.