Rural demand growing very slowly after signs of revival: Wipro Consumer

Company expected demand to be much better due to low base last year. While volumes are back, growth is still in low single digits

While rural demand has started to turn positive, Wipro Consumer Care says it is still lower than expectations.

“We saw some signs of revival in the October-December quarter, things looked clearly better in January-March…  I'm a little cautious now. I won't call it a very robust demand environment, it is growing but at a very slow pace,” Neeraj Khatri, chief executive, Wipro Consumer Care, India and SAARC business told Business Standard in an interview.

He added that the company expected demand to be much better due to a low base last year. While the good part is that volumes are back, growth is still in low single digits.

Wipro Consumer Care is heavily penetrated in the South and West regions of the country and has a direct distribution of 800,00 outlets. Khatri said the firm's indirect reach is 2.5 times its direct distribution and is working on improving its distribution in states where it does not have a strong presence.

Its soap brand, Santoor has a revenue of over Rs 2,650 crore and Khatri said it is the No. 2 brand in the toilette soap category.

Wipro Consumer Care and Lighting sales crossed Rs 10,000 crore in FY23 as it has seen significant growth across its geographies, brands, and categories.

Its revenue stood at Rs 8,630 crore in FY22.

The company is also focusing on premiumisation of its portfolio especially in some home care categories and has launched products in liquid dishwash, fabric softener, liquid detergents and floor cleaners.

Khatri said the company is open to acquisitions in personal care, home care and personal wash space.

Its investment arm, Wipro Consumer Care Ventures, started four years ago with the objective of investing in the direct-to-consumer space, aims at funding startups in the consumer space itself.

Sumit Keshan, managing director, Wipro Consumer Care Venture said that the firm makes sure its investment doesn’t go beyond 20-25 per cent in a startup.

“The idea is that the founders and promoters should have a substantial majority; they should have strong skin in the game,” Keshan explained.

He added that the companies it invests in need to have a plan in place on becoming profitable and also turn cash-positive.  

Keshan said the firm will continue to look for investment opportunities in personal care, skin care, fragrances and food startups.

Its first fund size is Rs 200 crore from which it has invested 60-65 per cent. Wipro Consumer Care Ventures has bet on 10 firms so far, and will come up with its second fund in a few months.

It has currently invested in Happily Unmarried (Ustraa), MyGlamm, LetsShave, OneLife Nutraceuticals, PowerGummies, Soulflower and T.A.C.-The Ayurveda Co. Recently the VC Fund has invested in DSG Consumer Partners Fund IV which is a consumer-focused VC fund based in Singapore.