Himalaya to focus on small towns to ramp up retail reach

Bengaluru-based Himalaya plans to double its retail reach in two years from around 1.4 million outlets at present to support its target of $1 billion in revenue by March 2021

Photo: Bloomberg
Photo: Bloomberg

Himalaya Drug Co., best known for its liver tonic Liv 52, plans to double its retail reach in two years from around 1.4 million outlets at present to support its $1 billion revenue target by March 2021, according to a top executive of the company.

The Bengaluru-based company, which also sells its products through an estimated 800,000 shops, will be focusing on tier-II and tier-III towns to ramp up its retail presence. “We will consolidate in metro and top cities, and expand across smaller markets. The next phase of growth will come from these markets,” chief executive Philipe Haydon said.

Himalaya, which closed fiscal year 2016 with Rs1,800 crore revenue in India, also sells products across 90 markets. “About half of the $1 billion will come from overseas markets. And the remaining will be from India, backed by new business segments including wellness, baby care, mother care and hygiene,” Haydon said, adding that the company hopes to close the current fiscal with revenue at around Rs2,100 crore.

At present, Himalaya gets about 34% of its domestic revenue from the pharma business. Liv 52, a liver care drug that the company has been selling since 1955, generates about Rs250 crore. About 42% of Himalaya’s domestic sales come from the personal care business, a segment the company entered in 1999.

Last December, Himalaya set up a new division to focus on non-prescription drugs in areas like immunity, joint care, women’s health and vitality. “Over the next five years or so, wellness could actually account for more than 30% of revenue, which is almost at par with the company’s domestic revenue from the pharma business,” Haydon said.

Face wash, as a sub-category, accounts for about 67% of Himalaya’s personal care sales. Himalaya’s Purifying Neem Face Wash, which has an estimated 19% market share, is the top revenue earner with Rs500 crore in sales a year, Haydon added.

Himalaya will continue to “differentiate across important consumer solutions using the knowledge bank of herbal ingredient problem-solving compounds”, besides creating a “new neutraceuticals segment concentrated on impr-oving the quality of life”, said Sunita Sachdev, analyst with UBS Securities India Pvt. Ltd.

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