Wipro plans to re-launch newly acquired soap Aramusk to gain share in a growing consumer category. To succeed it must keep rival products like Cinthol at bay.
When the macho and buff John Abraham advertises a whitening face cream—once the purview of women who yearned to hew to the Indian quotient of attractiveness, namely being lighter—you know that something unique is going on with men and grooming in India. Metrosexuals—or even middle-aged men in low-end barbershops—are not afraid to slap on a Shahnaz facepack or ask for a pedicure so it is of little surprise that Wipro Consumer Care & Lightning—the FMCG arm of the technology giant—is eyeing this market hungrily. Its latest weapon for grabbing market share in a nascent category: newly acquired soap, Aramusk.
Aramusk is one of the oldest male deodorant soaps in the country with a uniquely strong scent and supposedly a favourite with men. It was acquired—along with Moloy sandalwood brand which has a fan base in eastern India—from the Mumbai-based VVF Ltd, one of the largest contract manufacturers of bar soaps in the country, in June this year for around Rs 20 crores according to industry reports. With Aramusk, Wipro Consumer Care, which contributes about nine to ten per cent to the parent's overall revenues, will hope to galvanise its soaps category and compete with soaps like Cinthol.
Vineet Agrawal, president, Wipro Consumer Care, sounds cagey when talking about the relaunch of Aramusk. “We are studying the market,” he says. “There is a latent equity that the brand Aramusk has, which can be tapped,” he adds. Agrawal, and Wipro, have evidently more than studied the market. Yardley, Wipro's existing iconic brand, and among the oldest brands in the world, doubled its sales during Q1 of 2011-12. The company will be hoping that Aramusk can blaze a similar trail.
One reason for Aramusk becoming the lynchpin of Wipro’s soaps strategy, is because men's personal wash, according to industry experts, is an exciting growth category in the Rs 1,000-crore male grooming market in India, which includes deodorants, creams, after-shave lotions, perfumes, gels etc. At about Rs 300-400 crore, incumbents in personal wash mainly include Godrej Consumer’s (GCPL) Cinthol, which has strong male equity and has been built over the years on the premise of freshness and deodorancy. Cinthol, in fact, has had some notable brand ambassadors that endorse it, including cricketer Imran Khan, actor Vinod Khanna, and more recently, Hrithik Roshan.
Cinthol’s strategy is a smart one. According to market experts, freshness and deodorancy remain key elements for men when it comes to personal grooming. Most international deodorant brands such as Fa, for instance, have also done well playing up these attributes in personal wash. Ironically, Henkel, the makers of Fa, were unable to keep the promise with Aramusk, which it originally promoted, choosing to offload it to VVF, in 2010.
As far as the overall Rs 6,500 crore soaps category is concerned, relaunching Aramusk becomes an equally important play for Wipro. Hindustan Unilever (HUL) has a share of about 45-46 per cent, GCPL comes next at 10.1 per cent, followed by British consumer goods maker Reckitt Benckiser at close to nine per cent and Wipro Consumer Care at 8.2 per cent respectively. The stakes in this category are high and the competition neck and neck. Reckitt, the maker of Dettol, recently overtook Wipro as the number three player in soaps and Wipro will be looking to snatch that advantage back with its new product.
Aramusk is not the only soap Wipro has. Its leading soap brand Santoor has over 8 per cent market share and is the third largest selling soap in India behind Hindustan Unilever's blockbuster soaps, Lux and Lifebuoy. In addition to Santoor, Wipro also has an ayurvedic soap (Chandrika), a baby soap (Wipro Baby Soft), a shikakhai soap (Wipro Shikakai) and a liquid soap (Enchanteur) in its portfolio But by adding men's soaps, Wipro will not only strengthen its portfolio, but also actively participate in a category, where it has no presence.
In fact, acquiring brands has been an important strategy for Wipro Consumer Care. In the last few years, this division has growing rapidly thanks to over half a dozen acquisitions in both domestic as well as international markets, on which it has spent Rs 1,500 crore. In 2003, Wipro had its first buy with energy drink Glucovita followed by Chandrika soap in 2004 and North-West Switches in 2006. Its first major overseas acquisition was Singapore-based Unza Holdings for over Rs 1,000 crore. Two years ago, it acquired Yardley's franchise in Asia, West Asia and Africa for over Rs 200 crore. Consequently, the consumer business has more than tripled its revenues in just five years using this strategy and contributes close to 10% of the IT company’s total sales.
Still, Wipro has its hands full with not just appeasing Indian males but also keeping competition at bay. After all, this strategy of addressing different consumer needs is also something that rival Godrej Consumer is using effectively to retain its number two position in the soaps category. Rather than depending on one segment alone, which is the route that Reckitt has taken with its germ-fighter Dettol, GCPL has a bouquet of offerings in soaps, from beauty to deodorancy, health to hair. Wipro is also opting to stick to its portfolio of offerings, strengthening it with new products, say market experts. “This way there is something for everyone,” says Arnab Mitra, fast moving consumer goods (FMCG) analyst at brokerage Indiainfoline.
The smart, end-strategy will probably be a ‘Trojan Horse’ one—where an entry into men's soaps will allow brand extensions and other products to piggyback on one successful launch. Rival GCPL has done this well with Cinthol. The brand today has a presence in talcs and deodorants besides soaps, says Tarun Arora, executive vice-president, marketing, GCPL.
The Aramusk relaunch is expected to be monitored quite carefully by the industry. “It would be interesting to see how Wipro handles the relaunch,” says Mohan Goenka, director, Emami. He should know a thing or two about launches. A few years ago, Emami launched a men’s fairness cream, Fair & Handsome. The category, of course, did not exist till then and Emami had the first mover advantage. But rivals such HUL and Garnier were quick to seize the opportunity the moment they realised that men were warming up to the concept. From a nascent category a few years ago, the segment today is almost a Rs 300-crore category, according to estimates.
Here, Wipro, too has a sizeable opportunity in a new category that could give life to numerous other related products—but its success or failure will depend on how effectively it can give men what they want while making sure that few other brands will.
