Home / Companies / People /  Darshan Patel’s passion for products

New Delhi/Ahmedabad: India’s best selling men’s deodorant brand isn’t Axe, the cult brand from Unilever famous for the erotic TV commercials that unbashedly pander to male fantasies. For four quarters in a row, the distinction has belonged to Fogg, which is trailed by Wild Stone, Engage and Axe, in that order, in the 2,500 crore deodorant market, according to market researcher Nielsen.

In the television campaign conceptualized in-house, Fogg is promoted as a deo without gas, delivering more sprays per can. That’s in keeping with the philosophy of Darshan Patel, founder and managing director of Vini Cosmetics Pvt. Ltd, the Ahmedabad-based maker of Fogg.

“I work for one thing: a differentiated product," said Patel, who concedes that the approach has its pitfalls. “It’s a dangerous proposition because if no such product already exists in the market, consumers might reject it. But I feel it’s better to die differentiating than creating something that is already there."

The approach has paid off in the case of Fogg, which sells two million cans a month (cost: 180 for the smallest size) and makes up 75% of sales at Vini Cosmetics, which earned revenue of 350 crore in the year ended 31 March. The deo was launched only two years ago.

It also makes the facial powder White Tone, Jinjola talc, 18+ deodorant and Glam Up fairness cream.

To be sure, Patel, 52, isn’t new to creating brands. He was the man behind repositioning Moov, the pain relief cream and spray, and Krack, a cream sold as a treatment for cracked heels, Dermi Cool prickly heat powder and Set Wet hair gel, among a dozen popular brands marketed by the family-owned business Paras Pharmaceuticals Ltd.

Patel launched Vini Cosmetics in 2010, having spent two decades at Paras Pharmaceuticals, which he co-owned with his brothers; he had a 24% stake in it. Following differences with his brothers, he sold his stake to private equity firm Actis Capital for $43 million in 2006 and exited the company, which was acquired by Reckitt Benckiser Group Plc. in 2010 for 3,260 crore.

His first attempt to launch Vini Cosmetics in 2006 was aborted by his family, which persuaded him to stay on as a member of the board at Paras Pharmaceuticals. But he was raring to go and launched the company, named after a pet turtle of the family, four years later, after the acquisition of Paras by Reckitt Benckiser. Four more years on, the company has quadrupled sales.

A year ago, Sequoia Capital, the local arm of the American venture capital firm, invested $19 million in Vini Cosmetics. Patel’s business agenda includes the launch of over-the-counter healthcare products and packaged foods and a proposed entry into the Brazilian market.

Dressed casually in blue jeans and a white shirt—his work clothes, he says—Patel sits behind a neat desk at his office with a shelf full of deodorants and talks about his life, passion for creating brands and understanding the consumer. “It is god’s gift to me," he says about his insights into consumer behaviour.

Some of those insights he acquired during long road trips and train journeys from Odisha to Ahmedabad and back. Born in Ahmedabad and brought up in Sambalpur in western Odisha, Patel travelled frequently to visit relatives in Gujarat.

“We crossed states, cities and satellite towns and there you would see real India—with languages changing every 100km and local brands sold on the roadsides," he recalls.

The self-taught marketing whiz, who reads and re-reads books on marketing and branding to keep himself up-to-date with the latest trends, says that people who spend time only in the boardroom cannot fathom the Indian consumer.

He used his insights to create a portfolio of roughly two dozen consumer brands across the two companies he’s worked at.

At Paras, Patel was responsible for product development and marketing.

“Product launches were and still are a part of Patel’s DNA," said Abhay Pandey, managing partner at Sequoia Capital, which bought a 14% stake in Paras Pharmaceuticals in 2006 when Patel was on its the board and later invested in Vini Cosmetics.

The first seven years at Paras, recollects Patel, were a “learning phase". The time was spent expanding the distribution network, improving relations besides launching brands, including Itch Guard soothing cream and Borosoft cosmetic cream.

“If there’s one thing Darshan bhai knows it’s how to create new products," said Chandan Nath, a former head of advertising agency Mudra in Ahmedabad.

Ideas on the mind

Nath worked closely with Patel for more than 15 years on brands such as Moov, Livon and Dermi Cool.

“This is what I do before I go to bed every night—think of new ideas and how to market them," says Patel.

Livon, the leave-in hair conditioner, is one creation Patel is proud of. The idea of a leave-in hair serum struck Patel as he watched women in apartments across his house untangling their hair after washing it. Two years and many formulations later, Patel launched Livon, priced at 140, as a solution to wet, tangled hair.

“It was the first time I had sold something at that price point and it worked. The lesson was—see a need gap, fill it with the right product and the consumer will pay," he said.

By the mid-1990s Paras Pharmaceuticals’ products were gaining popularity with Indian consumers. In October 1993, Patel launched Krack cream, interestingly positioned as a healing ointment for cracked heels. He also changed the positioning of Moov, originally meant to be a joint pain reliever. Its USP was extended to include all pains, including backache. By the time Patel left Paras, Moov was a 50 crore brand.

When Paras Pharmaceuticals was sold to Reckitt, Actis had a 63% stake in Paras and earned handsome returns from the stake sale. In 2012, Reckitt sold the Set Wet range of deodorants and hair gels along with Livon and Zatak deodorant to Marico Ltd, the makers of Saffola oil.

“I can’t explain why I left Paras but owing to differences sometimes you just have to move on. I had the confidence to build many more brands," said Patel, who in his new business is helped by his younger brother Dipam.

Vispy Doctor, who has worked with Patel for over 18 years conducting every consumer research for him through his company ORMAX Consumer Research and Brand Consulting, claims that Patel can put any multinational brand manager to shame.

Brand fixation

“His insights and clarity of thought are outstanding. While MNCs create a product and then brand it, Patel bhai creates a brand, identifying the need gap in the market and then builds a product around it," said Doctor.

Patel knows what he wants, Akashneel Dasgupta, a former planner at Mudra Communications in Ahmedabad, who has worked on Moov and Livon.

“He has a fixation for his brand names," said Dasgupta.

The names reflect the brand promise—whether Krack for cracked heels, Livon for leave-in conditioner (leave-it-on) and Set Wet for hair that styles because it’s wet.

“No jargon, no complexity. It made conversing with consumer much less tedious," said Dasgupta.

Patel set up Vini with an initial capital of 70 crore. In the year ended March, Vini clocked sales of 350 crore. “We will be crossing 480 crore by the end of this year—doing in four years what Paras took two decades to do," said Patel.

In a cluttered market, Vini has succeeded in introducing differentiated products, according to N. Krishna Mohan, former chief executive officer (sales, supply chain and human capital) and business head (healthcare division) at Kolkata-based consumer products company Emami Ltd.

“That’s why they’ve got this response from consumers. Their throughput per outlet would be much higher than that of competing brands mainly because of the brand proposition," he said.

Private equity firms have also been attracted to Vini. Although Patel didn’t need the money, Sequoia pursued him, investing in his ability to create more brands.

“We had seen his work in Paras and looking at some of the numbers that Vini achieved in the first year of operation, we decided to invest," Sequoia’s Pandey said.

Patel built a distribution network spanning 500,000 points of sale with a sales force of just 500 people.

“It’s something I learnt from Paras, you have to build distribution and invest behind it," he said.

Regional companies are doing as well if not better than the multinationals in the consumer space, according to Rachit Mathur, principal at Boston Consulting Group (BCG). Their biggest advantage is the quick response to market forces. Local companies also have a more nuanced view of the market, Mathur said.

“They view India in a set of micro-markets, as opposed to seeing it as one broad market. They are better with creating locally differentiated products," he said.

The odd failures

To be sure, not all of Patel’s products have taken the market by storm. For instance, hair perfume Q-CO was withdrawn from the market because consumers seemed wary of using a hair fragrance.

A former executive at Paras Pharmaceuticals who spoke on condition of anonymity said the company achieved success, but it had its share of products that didn’t do well. The executive still admires Patel for the work he did at the company.

“Very rarely would you find such determined innovators in the industry," he said of Patel.

But he’s sceptical of his over-zealous approach towards churning out new products. “It’s highly risky. You will only strike gold once."

Patel hopes to scale Vini into a 1,000 crore company by 2017-18. The company is also actively exploring international markets, having established a presence in Dubai. On a recent holiday in Brazil to watch the World Cup, Patel squeezed in a few meetings with potential distributors to possibly extend his brands to the Latin American market.

The former executive cited above is not so convinced about scale: Patel does not believe in allowing professionals to run his company, he said. And to scale from 100 crore at the start to 1,000 crore, he needs outsiders and a professional team to run his business. “Scaling up to such a level in a profitable manner is a different game," he said.

Patel is currently in search of a different product to enter the packaged foods market. Food industry experts caution that packaged foods is very different from the personal care category Patel is familiar with.

“It’s a different animal to tame," said Mathur of BCG. “It’s more operationally challenging. Companies have to work around issues of quality and freshness and it’s also a low-margin play compared to personal care."

Telling his story

Patel, whose only daughter Janki has graduated with a degree in business management from Bangalore and is training with him, can be found on weekends cooking Indian food at his orchard 100km away from Ahmedabad where he grows chikoos, sweet lime and apples, among other fruits.

He hopes to find more leisure when his nephew Manan, who has been living with him since childhood and is now studying marketing and finance in London, joins the business; he will devote the time to writing about the lessons that he has learnt in marketing.

“I never went to any business school so I want to tell my story, what I learnt about selling in India," he said.

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