A downturn is the right time to gain market share: Chander Mohan Sethi4 min read . Updated: 10 Oct 2013, 12:25 AM IST
Reckitt Benckiser is looking at growing its market share in India and even double revenues in the next three-four years
Mumbai: In a slowing Indian economy, Chander Mohan Sethi, senior vice-president (South-East Asia) at Reckitt Benckiser Plc. (RB), maker of Dettol and Lizol, is looking at growing his company’s market share and even double revenues in the next three-four years. “Yes, the markets are slowing down. The sentiments are negative...this situation may not change for the next 6-12 months," says Sethi who is keen to take advantage of the downturn to grow. Sethi was in Mumbai to launch the Global Hygiene Council’s 2013 study on hygiene supported by RB. Edited excerpts from an interview:
Your advertisement spendings are very high, at over 15% of sales, and this too in a slowing Indian economy. Why is that?
Yes, the markets are slowing down. The sentiments are negative. But in spite of that, in any downturn there will always be the guys that have the will not only to survive, but take advantage of the downturn to build and grow. I honestly believe it is the right thing to do because when everybody else is leaving the field..., that is the right time to build and gain market share.
India for Reckitt Benckiser is one of the key markets. Not only do we passionately believe in the opportunity, we continue to invest in this country.
Our long-term vision of India and emerging markets is still very strong. It will be interesting to see how the market pans out. It will depend on how much stomach you have to continue to take the risk and fight for not only protecting share, but for gaining it. We are committed to gaining share and making India a much more significant part of our global country portfolio.
In the past year, close to half a dozen consumer packaged goods companies have had top-level changes. Moreover, companies such as Reckitt, Mondelez International (Cadbury India) and Britannia Industries Ltd have brought in external talent at the top. What is the need for change?
But companies will not shy away from that because very good people pay for themselves.
At Reckitt Benckiser, Akhil Chandra took over as managing director for India around a year ago, coming in from GlaxoSmithKline’s Malaysia and Singapore operations. What was the reason to bring in someone from a pharmaceutical background?
One of the reasons is the change in our global strategy. If you go back five-seven years, we used to say Reckitt Benckiser is the biggest household cleaning products company. We don’t say that any more. The strategy and direction of the company now is very different. About 18-20 months ago, we said this company would be about health, hygiene and home. You can see this playing out now. I spend most of my time looking at healthcare portfolio and opportunities. In less than 24 months we bought three major healthcare companies globally.
Dettol and hygiene products like Lizol still account for a large part of your India revenue.
Broadly, health will be our focus area. Hygiene is extremely important and home will chug along. We will see our health portfolio grow from 20% to 35% (of revenue) in three-five years.
It will be the fastest (growing) part of our portfolio. We will introduce more products in health from our global acquisitions here. The intent of this company is to double revenue in three-four years.
So you are looking at a growth rate of 25% a year even in a slowing market?
We have done this over the last decade, so why not now?
Yet, when you looked at brand extensions and new categories to enter, you chose Dettol for entering the dishwash segment. Can we expect more such brand extensions under Dettol?
Dettol stands for overall health and hygiene in the home and for the person. We have got Dettol for personal hygiene—hand wash, sanitizer and in soaps.
What we say in our commercials is something that can be scientifically proven. We have won all the cases and advertise what is allowed by ASCI (Advertising Standards Council of India).
We have already gained over 10% market share in the last six months in general trade, and over 15% in modern trade.