MAM
Global net spend up, print down: Nielsen
MUMBAI: Advertising is on the rise around the globe and across nearly all media types, according to Nielsen‘s Global AdView Pulse report.
Gains in areas such as Internet (7.2 per cent), radio (6.6 per cent ) and TV (3.1 per cent ) offset the 1.3 per cent decline in magazine spending in the first half of 2012, leading overall ad investment to be up 2.7 per cent.
Internet advertising made a powerful surge in the emerging markets of the Middle East and Africa (30.3 per cent) and Latin America (20.6 per cent). Interestingly, despite being down in overall ad spend, Europe saw the third highest increase in Internet ad spend of any region (11.2 per cent ).
While television continues to hold the majority of advertising dollars globally (61 per cent), the medium saw the biggest increases in Middle East & Africa (30.1 per cent), Latin America (6.2 per cent) and North America (4 per cent). TV investments declined 2.2 per cent in Europe and grew nominally in Asia Pacific (1.4 per cent).
Magazine spending fell significantly in both Europe and North America, but magazines and newspapers both saw growth in other markets including Latin America, Asian Pacific, and the Middle East and Africa.
Cinema experienced a noteworthy 40.2 per cent gain in the Asia Pacific market and a marginal gain in Europe of .4 per cent. This led to an increase of 5.9 per cent globally despite decreases in Latin America (-21.1 per cent) and the Middle East & Africa (-19.1 per cent).
Outdoor media ad spend grew during the first half of 2012, with the biggest gains in the Middle East & Africa (38.8 per cent) and the Asia Pacific (16.7 per cent).
Radio, which saw a global increase of 6.6 per cent, was also up in all regions measured.
Brands
Honasa’s Varun Alagh targets next Rs 500 crore brands as profit doubles
Profit doubles as Mamaearth rebounds and new labels race to scale
MUMBAI: Honasa Consumer’s co-founder and chief executive officer Varun Alagh has set his sights on building the company’s next crop of Rs 500 crore brands, as the beauty and personal care firm delivered record revenue and nearly doubled its profit.
The Mamaearth parent reported revenue of Rs 602 crore, up 21.7 per cent year on year, with volume growth of 30 per cent. Ebitda rose to Rs 66 crore at a margin of 10.9 per cent, while profit after tax reached its highest-ever quarterly level.
“We have delivered our highest-ever quarterly revenue and almost doubled our PAT,” Alagh said. “The fundamentals we have rebuilt over the past few quarters are clearly delivering outcomes.”
With Mamaearth back to double-digit growth and The Derma Co sustaining strong momentum, Alagh believes the next wave of brands is ready to step up.
“It’s a race to become the next Rs 500 crore brand,” he said. “Reginald Men, Dr. Sheth’s, BBlunt, even Staze in colour cosmetics, each of them has the right to win in its category.”
Honasa’s portfolio of young brands grew more than 25 per cent during the quarter. The Derma Co, its science-led skincare label, has now achieved double-digit Ebitda margins and continues to gain share in sunscreen and actives-based skincare.
Mamaearth, once the company’s sole growth engine, has returned to the teens in year-on-year growth after a strategic reset.
“We focused on superior formulations, sharper communication and six core categories,” Alagh said. “We are seeing strong share gains, not just growth riding the market.”
Importantly, over 90 per cent of Mamaearth’s growth came from existing distributors and large retail partners, reflecting stronger consumer pull rather than mere expansion of reach.
From a channel perspective, e-commerce grew over 20 per cent, while general trade and modern trade delivered more than 25 per cent growth in secondary sales. Direct distribution now contributes nearly 80 per cent of revenue.
Honasa has also made a calculated entry into men’s skincare with the acquisition of Hyderabad-based Reginald Men. Alagh believes the category is at an inflection point.
“In the last two to three years, we’ve seen searches for ‘sunscreen for men’ and ‘face wash for men’ grow multi-fold,” he said. “Men want multi-benefit products without complicated regimes.”
Beyond category expansion, the acquisition strengthens Honasa’s footprint in South India and broadens its talent base.
The company reiterated its target of expanding Ebitda margins by around 100 basis points annually.
“Our endeavour is to unlock at least 100 basis points every year through a mix of A&P efficiency and overhead leverage,” said chief financial officer Raman Preet Sohi.
While advertising spends in absolute terms have risen, improved effectiveness has driven percentage efficiencies. Gross margins remained broadly stable, with guidance to maintain levels above 70 per cent.
With legacy FMCG giants sharpening their digital play and acquiring new-age brands, Alagh remained unfazed.
“Competition is not new to us,” he said. “We were born in categories where much larger players existed. The real value gets created when you focus on the consumer and where the consumer is moving.”
For Honasa, that focus now extends beyond one hero brand. As Alagh put it, the company is not content with a single success story. It wants a stable of them, each marching towards the Rs 500 crore mark.
