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.
