GCPL to create special unit for e-commerce

Sagar Malviya, Economic Times, 06 November 2014

Godrej Consumer Products is creating a separate trade channel for e-commerce, becoming the first FMCG company to have a dedicated unit for online sales in India, its managing director Vivek Gambhir says. The maker of Cinthol soap and Good knight mosquito repellent, which is implementing an integrated solution to monitor and optimise trade spends, targets to become a Rs 30,000-crore company by 2020, Gambhir told ET's Sagar Malviya in an exclusive interview. Edited excerpts:

Are you satisfied with your low sales growth in India this quarter?

While we are not happy with the sales growth, I think we are seeing some encouraging signs that give us some confidence in saying that probably the worst is over and some of the environmental indicators now seem to be trending in the right direction.

I don't think we can unequivocally say that we are out of the woods, but what's giving us some confidence is that, clearly the indicators seem to be heading in the right direction. I think some of the deceleration in growth probably has come down to its low point and hopefully with the economic environment improving, at least our hope is that now we will start seeing a recovery.

Is there any category that dragged your overall sales growth?

What dragged things the most was insecticides. Insecticides are fairly highly co-related with rainfall patterns.

Because of a high correlation in this rainfall patterns and because monsoons was both delayed and deficient, that actually had a very significant impact. So as a whole, the category grew about 1 per cent or so and our insecticide sales grew only about 2 per cent. And this segment is about nearly half of our business in India. Had the monsoons not done this way, it would have been a much better quarter for us.

So what will drive your sales going forward?

One of the things clearly is to look at white spaces in, say, the personal wash category, and within these white spaces, try and broaden our portfolio. Couple of months ago, we've launched Cinthol Confidence Plus as we really weren't playing in the 'germ protection' segment in a big way. Face wash is now a Rs 1,600-crore category, almost 10 per cent of the bar soap market and growing at about 30 per cent. So next week, we will launch Godrej No. 1 Face Wash, foraying into this market.

But isn't it a highly competitive market?

Through compelling packaging and a disruptive pricing format we hope to democratise face wash now because it has reached a critical mass. We are launching it at a very disruptive price point and we will also launch a multi-use sachet at Rs 10.

So this will be the first multi-use sachet for face wash and even our tubes will be priced about 30 per cent lower than comparable face washes in the market. This is the right time for us to democratise this category as well.

Isn't it a risky strategy to launch products in a downturn?

In the last six months, we had six launches. What's been good is that Expert Creme now is the largest selling hair crème in the country. And Good Knight Fast Card, in 11 months, has crossed Rs 100 crore.