Brands
Q2-2016: Godrej Consumer Products marketing spend up 20 percent
BENGALURU: Godrej Consumer Products Limited (GCPL) reported 20 percent year on year (YoY) growth in advertisement and publicity expenses (Ad) in Q2-2016 (quarter ended September 30, 2015, current quarter) at Rs 253.99 crore (11.3 percent of net Total Income from Operations or TIO) as compared to Rs 211.69 crore (10.3 percent of TIO). The current quarter’s Ad spend was 1.1 percent higher QoQ as compared to Rs 251.12 crore (12 percent of TIO). In Q4-2015, the company in its earnings release had said that its household insecticides brand ‘Good Knight’ crossed the Rs 1500 crore mark and amongst GPCL’s soap brands, Godrej No. 1 crossed the Rs 1,000 crore and Cinthol, the Rs 500 crore milestone.
Note: 100,00,000 = 100 lakhs = 10 million = 1 crore
Godrej group chairman Adi Godrej said, “We have grown ahead of the market and gained share in our core categories, aided by our continued focus on innovations, competitive marketing investments and strong on-ground execution. Our India business branded net sales grew by 10 percent, driven by a healthy volume growth of 9 percent. This competitive performance was delivered despite the softness in rural demand and a deficient monsoon.”
“We remain optimistic that as the economy improves, the FMCG sector should see a gradual uptick in demand. We are launching exciting new products and investing in several distribution initiatives. We will also continue to manage our costs prudently in the near term, while investing for the future,” added Godrej.
Trends
Please refer to Fig A below. GCPL’s Q2-2016 Ad spends mentioned above was the highest in absolute rupees during the 14 quarter period starting Q1-2013 until Q2-2016 in this report. Its highest Ad spend in terms of percentage of TIO was in Q1-2014 at 13.8 percent (Rs 239.06 crore). During the period under consideration in this report, its lowest Ad spends both in absolute rupees and in terms of percentage of TIO was in Q2-2014 at Rs 145.78 crore and 7.5 percent.
During the period under consideration in this report, Ad spends in terms of absolute rupees and percentage of TIO shows a linear increasing trend as indicated by the broken blue and maroon trend lines in Fig A below.
GCPL reported 9 percent YoY growth in TIO in Q2-2016 at Rs 2244.94 crore as compared to Rs 2060.12 crore and 7 percent QoQ growth as compared to Rs 2097.66 crore. During the fourteen quarter period under consideration in this report, TIO shows a linear increasing trend as indicated by the broken green trend line.
Profit after tax (PAT) in Q2-2016 at Rs 287.16 crore was 22.4 percent higher YoY as compared to Rs 234.53 crore (11.4 percent of TIO) and was 44.1 percent higher QoQ as compared to Rs 199.23 crore (9.5 percent of TIO). During the fourteen quarter period in this report, PAT shows a linear increasing trend both in terms of absolute rupees and percentage of TIO as in obvious from the broken red and black trend lines in Fig B below.
Category review by GPCL
Household Insecticides
GPCL says that its Household Insecticides maintained its strong performance despite the deficient monsoon, with a double-digit volume-led sales growth of 13 percent. The company says that Good knight has significantly improved the overall category penetration, especially in rural areas. This has been led by superior on-ground execution, effective communication and the success of innovative launches such Good knight Fast Card, Good knight Xpress and Neem Low Smoke Coil. GPCL claims to have consistently gained market share across formats and ended the quarter with our highest ever market share. GPCL launched an innovative ‘Subah Bolo Good knight’ campaign to create awareness on dengue, and to increase daytime usage and consumption. The company says that gross margins continue to benefit from lower crude oil prices and have improved significantly.
Soaps
The company says its Soaps business delivered a competitive performance with robust mid-single digit volume growth. This was partially offset by deflationary pressures, resulting in a value growth of 3 percent. GPCL says that it continues to remain competitive on sales promotion investments to gain market share. GPCL’s premium soaps brand, Cinthol, continued to lead overall value and volume growth, driven by distribution expansion and effective communication.
Hair Colours
The growth momentum in Hair Colours accelerated with a sales growth of 17 percent, aided by a double-digit volume growth. The company says that Godrej Expert Rich Cr?me sustained its strong growth, led by continued initiatives such as festival linked campaigns, large scale activations, salon engagement programmes, etc. The initial consumer response to the launch of Godrej Nupur Coconut Henna Cr?me has been encouraging.
Air Fresheners
Godrej aer, GPCL’s air freshener brand, continued its strong sales and distribution ramp up. This has been aided by the company’s innovative gel format technology and various consumer engagement initiatives. Godrej aer is now the number three player in the Air Care market, says GPCL.
Health and Wellness
GPCL’s says that its Health and Wellness portfolio of hand washes and hand sanitiser, under Godrej Protekt, continued to be well received in modern trade. Buoyed by its success in modern trade, GPCL says that it is introducing Godrej Protekt portfolio in general trade on a pan-India basis.
Premium Hair Care
GPCL has launched BBlunt range of premium hair care products in modern trade and premium general trade outlets.
Brands
Malaika Arora launches accessories brand Maejoy
The Bollywood star’s lifestyle brand, built with Myntra and Exceed Entertainment, promises aspirational fashion without the high price tag
MUMBAI: Malaika Arora is not the first Bollywood star to put her name on a brand, and she will not be the last. But Maejoy, the accessories label she has launched in partnership with Myntra Jabong India Private Limited (MJIPL) and talent outfit Exceed Entertainment, at least has a sharper pitch than most. The brand drops with 250-plus styles spanning handbags and lab-grown diamond jewellery, two categories that sit squarely in the sweet spot between aspiration and affordability, and lands on Myntra’s platform from day one, putting it in front of millions of shoppers without breaking a sweat.
The handbag range covers the full gamut: crossbody bags, structured shoulder bags, bucket bags, totes, workwear classics, backpacks and clutches, rendered in synthetic leather, raffia, braids, satin, rhinestone and metallic finishes. The jewellery line runs to rings, earrings, pendants, bracelets and tennis bracelets in silver, gold and rose-gold tones, set in 925 sterling silver with IGI and GCI certified lab-grown diamonds. The brand’s guiding philosophy, “The Joy of Being Me,” stakes its claim on individuality and self-expression; its three brand pillars, Authentic, Empowering, Accessible, are the usual suspects, though the lab-grown diamond bet is savvier than it sounds. Lab-grown stones now sell at a fraction of the price of mined ones, and the category is growing fast in India as younger buyers wise up to the arbitrage.
“Maejoy is a labour of love. Throughout my career, whether on screen, in business, or through my personal style, I’ve championed the idea that fashion should be empowering yet effortless. The brand aims to democratise global fashion trends while offering women something that extends the feeling of luxury every day, be it a lab-grown diamond or a perfectly crafted handbag,” said Malaika Arora, founder of Maejoy
MJIPL, the B2B wholesale arm of Myntra, is putting its design and brand-building muscle behind the venture. Suman Saha, chief experience officer and head of house of brands at MJIPL, was bullish on the tie-up.
“Maejoy brings together Malaika Arora’s distinctive style perspective with a strong proposition in the accessible yet elevated accessories space. We believe the brand’s fashion-forward designs and thoughtful positioning will connect strongly with discerning consumers.”
Suman Saha, chief experience officer, head of house of brands, MJIPL
Afsar Zaidi, chief executive of Exceed Entertainment, the talent management firm that helped broker the deal, has worked with MJIPL before and was characteristically direct about what makes Arora an unusually bankable partner.
“Building celebrity-led brands requires a delicate balance of authenticity and market viability. Malaika is a rare talent who commands equal respect as a fashion icon and a savvy businesswoman. We are proud to facilitate this partnership that brings together her creative clout and Myntra’s brand-building excellence,” said Zaidi
Celebrity fashion brands live or die on one question: does the star actually wear it, or is the cheque the only thing they signed? Arora, who has spent three decades as one of Bollywood’s most-watched style references, has at least built a plausible case. Maejoy is live now on www.myntra.com and the Myntra app. The real test, whether shoppers buy the handbag or just the hype, starts today.
