Leveraging India Internationally Marico Experience 1 Introduction

Leveraging India Internationally Marico Experience 1

Introduction FMCG Company formed in 1990 : - With 2 Brands : Saffola & Parachute - In 15 years : INR 100 cr to 1150 cr - All sales through branded products and services 2

Marico Builds Brands. . . Downstream Value Addition : Consumer End - Branding, Product, Packaging V/S Upstream Value Addition : Lower Costs – IT & BPO 3

The Business Hair Care – Pre & Post Wash (In India and Abroad) 4

The Business…. Skin Care – Customised Solutions : Through KAYA Skin Clinics Sundari – Global Ayurvedics : Business acquired in US in 2003 5

The Business…. Wellness – Healthy Cooking Oil, Blends, Salt, Functional Foods 6

Characteristics of FMCG Business 1. Low Capital Needs 2. High Branding Costs 3. Distribution : critical to success 4. New Products : Failures 8 out of 10 Launches 5. 3 to 5 years to break-even, if successful 6. Global Brands & MNCs in large segments 7. Be Distinctive & Unique to succeed 7

Marico’s International Journey…. How Did It All START ? 8

Marico’s International Journey…. It all started with smuggling……… 9

Marico’s International Journey…. Export of Coconut Oil was prohibited…. Marico had then lobbied to get export allowed…. Thus started a “new” business in the early 90’s…. 10

Journey driven by. . “Indian- Centric”- driven by : • Access to Clusters of Indian expats - Gulf, US, Canada, Singapore & Malaysia • Common Media Footprint - Gulf, other SAARC Countries • Common Ethnicity/ Hair Oiling habits - Bangladesh, Nepal, Pakistan, Bhutan 11

The Mechanics. . Used Distributor Model to enter countries Appointed Distributors in Gulf, SAARC countries, US, Singapore / Malaysia etc And then onto …. Brand Building in the markets abroad Spread the Brand : “PARACHUTE” 12

Where we have reached. … Direct l Bangladesh l UAE, Saudi, Oman, Qatar, Bahrain, Kuwait, Yemen, Lebanon, Sudan, Syria, Jordan l Pakistan, Nepal, Bhutan l US, Canada, Australia l Singapore, Malaysia, Indonesia, Myanmar l Kenya l Planned : African countries Indirect l Several where. . . Parachute is available through wholesale trade channels 13

How it has progressed. . International turnover in INR cr FY 07 figs Plans 14

Marico in the Middle East 15

Started with Oils… Indians in Gulf. . . • Parachute Gold - unique positioning. • Parachute Lite for easy grooming & UV protection. • Parachute Jasmine : perfumed coconut nourishment with conditioning. • Parachute Sampoorna : value added CNO with hibiscus, almond etc for complete nourishment 16

To Value Added Hair Care … …In Modern Formats… …Customised to suit Locals. . . • Parachute CREAMS • Parachute HAMAM ZAIT 17

Using local ads… local celebrity… Local Events Displays 18

The Result : Middle East Sales in INR cr Parachute Creams are the largest selling within the basket. . . 19

The Learnings. . . • No Escape Buttons – Separate Structure • Non-Core business for MNCs, Grab Market Share • Local Insights – Product Development • Locally developed Advertisements and Marketing • Experience Dealing – Modern Trade • For people : Opportunity Posting Outside India/ Travel 20

Marico in Bangladesh 21

Bangladesh • 15 years behind India • Started Market Expansion in 1995 • Large Coconut Oil Market • Dominated by Local Brands 22

The Parachute Journey. . Leveraged : 1. Plastic Packaging with flip top caps • attractive, convenient, economical 2. Wide Mouth Jars – All weather pack 3. Mini Bottles 4. Distribution using Information 5. Technology 6. Superior Localised Advertising 7. Superior Sales Promotions 23

The Parachute Journey. . Started with very low margins On gaining critical mass : Set up Subsidiary & Backroom Operations Set up our own factory Today …. . The largest Indian Company in Bangladesh…… 24

Going Beyond Oils Acquired Two Soap Brands … 2005 25

The Results : Last 5 years(fig in Tk Crores) 26

Parachute in Bangladesh: MS % MARKET SHARE > 55% Awareness 89% Total awareness level- 95% in urban vs. 79% in rural 42% TOM awareness across Bangladesh 27

Further Geographical Expansion - Limited by hair oiling habit - To leverage - Indian Habit - Food - Raw Materials like spices, Indian coconuts - Science – Ayurveda - Any other source of competitive advantage 28

Developed Countries - Highly cluttered – Saturated - Different Distribution - High Cost Entry - Dominated by MNCs Decided to create brand through an experience route 29

Sundari - Acquired Brand Built on Principals of Ayurveda - Changed Focus Store to Spa Brand - Catering to Resorts Destination Spas - Developed Protocols & Training Shiro Dhara, Marma Points - Appointed Distributors in Asia Pacific 30

Sundari (Contd) - Four Seasons Mariott, Canyon Ranch, Oberoi, Westin - Huge Learning Curve B to B Marketing - Long Lead Times to get entry - Niche Brand 31

Kaya – 2003 - Customised Solutions for Skin - Problem Normal and Anti-Aging Skin - Dermatologists – Key Differentiator - Medi-Spa-Zen like Ambience - Launched Hair Services 32

Kaya ME - Unique Business Model - No-Chain Internationally – Leveraged doctors / skin practitioners 2 in Dubai 1 in Abu-Dhabi - Un Clear Regulations - Plan expansion other GCC Countries 33

Going Forward - Next 3 Years 1. Expand – GCC & Bangladesh Wider Product Basket 2. New Countries Leverage Hair Care Products 3. Expand Kaya GCC Countries and Beyond 4. Sundari – Europe Increasing Scale 5. Growth through Organic / Acquisitions Route 34

Benefits Beyond Top/ Bottom Line 1. Career Paths in Different Business Outside India 2. Leveraging Technology Across 3. Learning Marketing and Distribution 4. New Ideas Domestic Business 5. Common Advertisement mediums e. g. Kerala / Gulf 35

We are passionate about India Advantage & Uncommon Sense Global Players in healthy living through distinctive solutions, largely leveraging India advantage. 36

Thank You 37