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A legacy brand’s toughest competitor is perhaps the brand itself. In a fiercely competitive market, staying ahead is key, and what but innovation can drive that growth? The secret to success for a fast-moving consumer goods (FMCG) company like Marico is adapting to new trends like digitization, premiumization, acquisition.
On a daily basis, the FMCG space is witnessing new launches that are creating cutting-edge competition in the sector. Brands must constantly innovate to stay ahead of the market. Appealing to new brands born online has helped companies grow.
“We are achieving growth through digitization and premiumization Jataa hair fall oil and onion oil are our special digital only products. Apart from this, our premiumisation of food staples, multiple digital brand acquisitions and investments in men’s grooming and skin care have been our diversification levers,” said Saugata Gupta, Managing Director & CEO, Marico Ltd.
Startup corporate chemistry
The company is on a digital transformation journey and going forward it aims to build a portfolio of at least three digital brands, organic or inorganic, with a combined turnover of INR 450-500 crore by FY24. Marico has recently added True Elements, Just Herbs and Beardo to its portfolio.
While it may seem fanciful to see how startups and corporate companies work hand in hand, the reality is more than meets the eye. Corporations and startups typically have different work styles. As an enterprise company, Marico is tuned to the operating model of a large FMCG, while its digital brands pay attention to fragmentation, niche SKUs and higher speed of innovation, taking small but few bets. Taking cues from such scenarios, the company decided to keep the operating models of Marico and its digital brands such as Just Herbs and Beardo separate. The two businesses operate on two parallel systems with separate key performance indicators, compensation and human resources. In any acquisition, Marico’s first priority is to find companies that align with its values and thus be a mutually beneficial relationship.
“I think it’s important that we build brands based on long-term sustainability, profitability and potential growth, as opposed to just topline growth and a path to profitability,” added MD.
Talking about what he has learned from the startup ecosystem, Gupta said, “The speed of innovation, digital marketing and operating model in terms of speed, risk and culture is very different and commendable.”
The world is currently suffering from rising inflation, which poses challenges for companies. Corporations are choosing new routes to navigate these difficult times. Supply chain disruptions, significant commodity inflation, shipping cost inflation are some of the key challenges.
“A balance is needed between managing costs and ensuring there are no disruptions in the supply chain. Whenever there is high inflation, especially in food products, people tend to reduce their trade in consumer goods. So we haven’t been able to pass all of that on to consumers or in certain cases we’ve been able to do that by going bridge or affordable. We firmly believe that the situation will ease by the end of Q2.”
The brand is also counting on its blessings as 50 percent of the company’s products are not under the high inflation cycle as these products went through the high inflation cycle last year. “We got a little lucky!”
However, the company will continue to manage costs, protect its market share and absorb some margin losses in the short term.
Marico makes a difference with its digital chemistry
Source link Marico makes a difference with its digital chemistry