Home > industry > retail > Himalaya plans expanding reach to 1 mn outlets via kirana route

Bangalore: The Indian unit of Ayurvedic medicine and cosmetics maker Himalaya Global Holdings Ltd plans to double sales at its consumer products business in three years, as it aggressively expands its distribution reach in kirana stores.

The maker of Neem face wash and Liv.52 tablets expects its sales to jump to 1,000 crore from 500-540 crore last year, said Rajesh Krishnamurthy, business head (consumer products) at the Indian unit of Himalaya Global.

Himalaya Global stocks its cosmetic products in more than 90% of supermarkets or modern trade outlets, as well as in 70-80% of drug stores and in about 250,000 grocery stores.

“We’ve expanded our reach through increasing our field force, getting more feet on the street. We’re also increasing automation, so we’ll cover more wholesalers and build the wholesale channel meaningfully," Krishnamurthy said in an interview. “We’re now focusing on kirana stores. We’re present in 450,000 retail outlets. Our target is to increase that to one million within three years. Most of this growth will come from kirana stores."

The consumer products business, which includes the company’s eponymous brand of shampoo and toothpaste, is becoming increasingly important to Himalaya.

The segment generated 45% of the company’s sales of 1,200 crore last year, up from 10-15% just six years ago, and Himalaya executives soon expect the division to become bigger than its pharmaceutical business.

Himalaya is going to focus its investment and new product launches in four categories: face care, shampoo, toothpaste and winter products such as body lotions, said Krishnamurthy, who joined the Bangalore-based company in 2012 from Colgate-Palmolive (India) Ltd.

“Face wash still has the most potential and then face packs and scrubs. Face packs and scrubs is currently a 500 crore category; I see it growing to 1,500 crore in five-six years because there is a shift in consumer behaviour with people expecting salon-type treatment at home," he said.

The company, owned by Dubai-based entrepreneur Meraj Manal, is India’s largest face wash maker, ahead of the likes of Hindustan Unilever Ltd. Its face wash brands contribute more than half of the consumer business sales.

Consumer products makers in the country have seen a slowdown in growth over the past two years or so because of a weak economy and high inflation.

“We haven’t been much hit by the slowdown primarily because the face wash category hasn’t slowed much. It’s growing at 20% from 30% earlier, but it’s still one of the fastest growing because of low penetration. Its penetration is 20% across India (in urban areas). Shampoo, for example, is flat from growth of 8-9% earlier. Toothpaste is growing around 9%, down from 14-15%," Krishnamurthy said.

“Himalaya has a great brand and it’s associated with herbal care, natural remedy, etc., which would appeal very much to rural consumers. I think it’s a good strategy for them to expand into more kirana stores—the opportunity is too big to ignore. The only thing is that they will need to get their pricing right and they will need to sell sachets because rural customers aren’t going to pay large amounts," said Pinakiranjan Mishra, partner (retail) at consultancy EY.

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