Brands seek R&D advantage in India

22 August 2012

NEW DELHI: Brand owners in India's fast-moving consumer goods industry are attempting to increase their speed to market, and thus gain a competitive advantage over their biggest rivals.

Nivea, the beauty brand manufactured by Beiersdorf, pursued this kind of approach by treating a new high-end lipcare line like an impulse confectionery offering, rather than as a traditional skincare purchase.

"We have been quicker than most of competition in developing the premium lipcare category," Rakshit Hargave, managing director of Nivea India, told the Times of India.

"All our initiatives have hit before competition, be it variety, price points [or] distribution. This has given us leadership."

A fairness cream for men conceived by Emami, a diversified conglomerate, benefited from a similar strategy, according to N Krishna Mohan, its chief executive, sales, supply chain and human capital.

"We were able to go to market within just under a year from the time the idea was conceived. This requires great agility. It took our established competitors by surprise as elements of marketing were in place within the short time," he said.

Dabur, the consumer goods and healthcare firm, has also embraced this principle with "Project Speed", designed to leverage the power of its product portfolio via a unified sales and distribution structure.

Sunil Duggal, the organisation's chief executive, observed that this process is not solely about new product development, but equally demands "that even the remotest of corners of the country get the products in a short period of time."

To that end, Dabur plans to double its reach in rural areas by securing access to small villages across ten states. Each village houses roughly 3,000 people, and together they provide 72% of potential FMCG sales in the countryside.

Corporate structures are another factor affecting how quickly businesses react, Saugata Gupta, head of the consumer products division at Marico, the health and beauty business, suggested.

"Empowered companies with flatter and decentralized decision making structures can outpace their rivals in speed to market," he said. "This, when accompanied by stronger local consumer insights, can develop into a potent competitive advantage."

Data sourced from Times of India; additional content by Warc staff