BackHimalaya sharpens focus on wellness products to grow revenue
The company aims to close the current fiscal year with a domestic revenue of Rs1,800 crore
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New Delhi: Himalaya Drug Co., best known for its liver tonic Liv 52, wants to establish itself as a wellness product maker as it aims to cross $1 billion in revenues by 2020.
To do that, the Bengaluru-based company has set up a new division that will focus on non-prescription drugs in areas like immunity, joint care, women’s health and vitality.
“We started the division in December, and it already accounts for about 4% of our revenue from India. 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 pharmaceuticals business. We want to be known as a herbal wellness brand," said Philipe Haydon, chief executive officer, Himalaya Drug Co.
The company aims to close the current fiscal year with a domestic revenue of ₹ 1,800 crore. Himalaya sells products across 90 countries. At present, about 34% of Himalaya’s domestic revenue comes from its pharmaceuticals business, which is led by Liv 52, a liver care drug that the company has been selling since 1955.
About 42% of the company’s sales come from the personal care business, a segment Himalaya entered in 1999. Baby care accounts for about 13%, and the remaining comes from animal health and associated businesses.
“Wellness is a very established and mature category in the developed world. With longer lifespans, people want to live healthy lives. Over the next few years, wellness will emerge as an inherent aspect of people’s lives and the market in India is under-explored. The potential is huge," said Haydon.
Like all its other products, Himalaya’s wellness products are herbal (based on Ayurvedic formulations) and address chronic therapeutic areas. The company will eventually expand its wellness portfolio with more nutritional supplements and other problem-solving categories, said Haydon.
The estimated ₹ 14,000-crore wellness market in India is currently dominated by two categories—cough and cold medicines and health drinks.
“We want to change that," Haydon said, adding that Himalaya’s wellness range will fill the gap between these two categories.
The company will use its existing network of doctors, chemists and pharmacies to promote the wellness range, besides being present in supermarkets and small retail outlets.
According to Haydon, the company hopes to grow at a compound annual rate of 20-25% till 2020. Personal care is growing at around 30% while baby care is at around 50%. “Wellness will grow the fastest," he added.
The company will also boost its personal care business. Currently, Himalaya’s Purifying Neem Face Wash leads the category with around 19% share in the estimated ₹ 1,200-crore face wash market.
The face wash category in India is projected to maintain its growth rate at 17.5% per annum, according to market research firm Nielsen.
Face wash as a sub-category accounts for about 67% of Himalaya’s personal care sales. In June last year, Haydon said that the company would expand its personal care range with products for conditions that need medical attention such as psoriasis, wrinkles, scars, hair loss and other skin disorders, Mint reported.
According to Sunita Sachdev, analyst with brokerage firm UBS Securities India Pvt. Ltd, Himalaya will continue to “differentiate across important consumer problem solutions using the knowledge bank of herbal ingredient problem-solving compounds", besides creating a “new neutraceuticals segment (a first in India) concentrated on improving the quality of life (supplements and vitamins) along with products that cater to an emerging modern lifestyle."
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