Dabur India strategies in the recession

Dabur India strategies in the recession.

In a bid to tide over the ongoing consumption slowdown, Dabur India is stepping up its investments to expand its direct rural distribution network and is launching lower-priced packs of its key brands.

While Dabur hope the festive season and the ‘near normal’ monsoon should lead to a better second half as compared to the first half of this fiscal, Dabur feels this slowdown in consumption will be relatively medium term and will not disappear in another couple of quarters. 

Dabur is targeting a mid-to-high single digit growth in FY20. Nearly 45 per cent of its business comes from rural India. So Dabur is focusing on strengthening its rural footprint by establishing a direct distribution network in 60,000-65,000 villages, that contribute to about 50 per cent of the FMCG industry’s sales, over the next two years.

Dabur is focusing on creating a portfolio that will ride on this infrastructure. So Dabur is launching Low Unit Price packs (LUPs) of Rs 5, Rs 10, Rs 20 and Rs40, to make its  power brands more accessible to rural consumers. The direct distribution footprint increases the breadth of its portfolio significantly. 

Dabur is focusing on growing its power brands (Dabur Amla, Dabur Red, Real, Dabur Chyawanprash, Dabur Honey, Pudin Hara, Lal Tail and Honitus) by putting significantly higher investments behind them to drive growth in the medium term. 

In line with its premiumisation strategy, Dabur will look at offering its power brands in modern formats, especially targeted at e-commerce and modern retail stores. 

For instance — its cough syrup brand, Honitus, can be moved from the medicine chest to the kitchen cabinet, in the form of a tea bag for everyday consumption. Rather than looking at new categories, our focus will be on having a play in category adjacencies.

Urban India has become disaggregated, due to the emergence of e-commerce and modern retail channels. Dabur is  adopting different strategies for different channels. For the e-commerce channel, Dabur is  crafting specific SKUs and doing exclusive bundled offers.