Wipro Care expects FMCG demand revival in rural India from end of Q3

Wipro Consumer Care and Lighting hopes that the recent good monsoon would revive rural demand in the FMCG sector, which has been subdued due to factors like demonetisation, GST implementation, NBFC crisis and stressed bank assets.

Anil Chugh, chief executive of Wipro’s consumer care business, India, said their soap brand, Santoor, has a strong presence in the rural market. Compared to the industry share, which is generally 74:36 in the urban and rural sectors, Santoor’s urban and rural market share is 50:50.

“We are looking forward to revival of the rural demand and the good monsoon are likely to bounce it back,” Chugh said. Monsoon coupled with the government intervention like giving higher MSP to crops can foster growth for fast-moving consumer goods (FMCG) products and this may happen from the end of the current quarter.

Foreseeing a rural demand growth, the `7,200-crore company is putting up another personal care product plant in Hyderabad over 25 acre and expects to make it operational by early 2020.

Although Chugh didn’t divulge details on the investments being made, he said Andhra Pradesh and Telangana were their biggest markets with 38% market share and they wanted to be closer to their predominant market.

Wipro Consumer Care, with a Rs 2,000-crore soap business, has seven plants across the country, and Andhra Pradesh and Telangana markets are served by the Tunkur plant near Bengaluru. A plant at Hyderabad will enable the company to better cater to the eastern region, where it has a low market share. The company aims to raise its eastern region market share to 10-15% in the next five years. Along with Santoor, the company is poised to re-engineer and reposition its Aramusk brand of soap and personal care products, which at one time had a strong presence in West Bengal.

“West Bengal is a strong market for cosmetics and personal care products,” Chugh said. He said the male grooming product brand Ustraa, and the male and female grooming product brand Happily Unmarried, where Wipro has a minority stake, would be placed as e-commerce-led brands. E-commerce currently contributes sub-2% of their total revenue, Chugh said.

He said their exports to the West Asia were also likely to look up after monsoon and the company planned to set up another unit in China, which is their second largest market. The company has grown overseas by acquiring local brands and besides China, the company is present in Malaysia, Indonesia, Vietnam and Philippines, though India would continue to remain its largest market with 54% of revenue coming from the domestic market.

Chugh said the company would give leverage to its brands like Enchanter and Yardley to get a bigger bite of the market share. “The company has grown 23 times in the past 16 years.”