MUMBAI: Reckitt Benckiser has toppedGodrej Consumer and Marico to clinch the third spot in the Indian home and personal care market, even as the British firm plans to build one of its biggest factories in the country by next year.
Reckitt Benckiser India (RB India), which sells products ranging from soaps to over-the-counter medicines to condoms, posted revenues of Rs 3,593 crore for the year ended March as per its latest filing, slightly ahead of Godrej Consumer, Marico andColgate-PalmoliveBSE -0.04 % (see graphic).
Market leader Hindustan UnileverBSE -0.21 %is, however, four times its size and competes with the Dettol-maker in soaps and household products. Procter & Gamble too is ahead of RB India, but only after combining all its three businesses, including Gillette and P&G Hygiene.
"We have a vision to grow 25% per annum and we grew in high teens last year, too," Chander Mohan Sethi, senior vice-president for South East Asia at Reckitt Benckiser, said, adding the tough economic condition did not impact the firm's growth rate. He said the firm is evaluating setting up a multi-product greenfield plant, which will be one of its biggest in the country, within the next 12 months. It is yet to take a final decision and zero in on the location, Sethi said.
Reckitt Benckiser, which has made a fortune selling soap, cleaner and disinfectant brands in the country, is now betting big on its healthcare portfolio, including OTC brands and Durex condoms, as disposable income rises and consumers get more health conscious. "We want to focus on health and have hired a lot of people with a medical background. There is also a separate wing which caters to pharmacies," Sethi said. He pointed out that India's total health supplement market is about $300 million (about Rs 1,850 crore) against $800 million in Indonesia, which has just over one-fifth of India's population. While RB India already had brands such as Disprin and Strepsils, its Paras Pharmaceuticals buy almost three years ago brought to it niche brands such as Moov, Krack and D'Cold.
The company, however, said its focus on the health portfolio won't affect its established brands in the home and personal care segments. RB India's hair removal brand Veet, floor cleaner Lizol, lavatory care brand Harpic, Colin glass cleaners and shoe care brand Cherry Blossom are all market leaders in their respective categories.
Analysts say while most companies have been making efforts to reach more than a billion Indians through affordable products in mass segments, RB India is trying to capture the new-age and small categories, which can be challenging in the short term.
"Most of Reckitt Benckiser's segments are niche and will take years to have a sizeable business in India. The only large category they are in is soaps, which is getting extremely competitive, and Dettol trails HULBSE -0.21 % brands Lifebuoy and Lux," an analyst at a foreign brokerage house said.
Sethi said the company will invest for the long term and not get into a high-volume, low-margin business just to improve its top line. He said Dettol improved its market share in soaps segment from 1.3% a few years ago to 8% now. "We want to make it the number one soap brand," Sethi said.