There is no pressure on margins, Bajaj Consumer nearing 10% volume growth
Sumit Malhotra, MD, Bajaj Consumer Care
Mar 15, 2019 | Source: Economic Times
On cooling oil segment: We are trying to take advantage of the brand strength that Bajaj Almond Drop has and launch a light cooling oil, the whole idea being that by nature the existing cooling oils in the market are dark red and basically strong in their cooling effects. If I can have lighter cooling oil, it makes lot of sense for people who do not venture into that segment just because it appears too harsh. This is a light cooling oil and therefore we are going along with our plans of moving away from the heavy stick oil category which one of the cooling oils are.
On expansion: We already have had our share of launches in the skin care/ We have launched sunscreen lotion now. In terms of extension of Bajaj Almond Drops, that is something that we have been working on for the last couple of years. The first attempt was at cooling oil and our researches show that there are opportunities there. We would go ahead with that.
On future for almond oil category: There is no almond oil category and even though we marketiers are divided between coconut, amla, light hair oil, cooling oil, etc, the consumer does not see it like that. The consumer looks all of this as hair oil and therefore we need to find our own strength within the fold. Up till now, we have got a very unique proposition which is light hair oil with the nourishment of almond. We probably need to find some other sweet spot within this to increase our market share within the hair oil ategory. Currently it is around 10%.
On tie up with Bain and five-year strategy: Yes, we have just tied up with Bain and therefore there is no strategy that has come out of our interaction with Bain. The whole logic is that there are headwinds and growth over last three quarters are really picking up. This is the right time to invest both in terms of strategy and implementation of the strategy and that is why we believe that there was no better organisation than Bain to help us because they have had a proven track record within India and have had quite a few visible successes in their strategy out here.
On volume growth for 2019: You would see stronger hair oil growth in India and what has been happening over the last three quarters if you believe in trends is that both volume and value growths are coming back in the hair oil segment. What used to be something like a 5-6% volume growth is closer to a double-digit volume growth.
On margins: There is no pressure on margins because I have always been saying that is one thing we have been able to manage well. We had taken price hikes in April and in July and that has more than accounted for any possible reduction in gross margin. So, gross margins are fairly well protected at this point of time.