Inflation, poor demand has resulted in a double whammy: Bajaj Consumer Care's Jaideep Nandi

Bajaj Consumer Care, the country’s leading hair oil maker, has been in the business for nine decades but the recent macroeconomic scenario post-COVID has tested its resilience. From steep inflation to changing consumer behaviour and lack of disposable income, the Mumbai-based company is facing several challenges. Jaideep Nandi, Managing Director of Bajaj Consumer, tells Business Today how the company is steering clear of the troubles and getting ready to take the competition head-on. Edited excerpts:

BT: What has been the impact of steep rise in commodity prices of late?

Jaideep Nandi: It is a double whammy as one cannot pass on the entire increase in costs to the consumers, given the poor demand situation especially in rural markets. As a result, we are witnessing an impact on our bottom-line. Cost of raw materials has surged 16 per cent in the last five-six quarters. While, we have passed on additional cost through about 7 per cent price increase. For the first time in a while we are finally witnessing some respite due to the portfolio expansion. Earlier, due to a lack of wider portfolio our avenues for growth were very restricted. Now with some new product additions we are witnessing traction. 

BT: What are the factors that has led to poor demand in rural market, which were growing faster than urban market before COVID?

JN: Lack of disposable income among consumers is a real issue. I have travelled extensively and what I found is consumers simply do not have enough money to spend, which is leading to poor demand scenario in the rural markets. However, in relatively affluent stales like Maharashtra and in South, the impact is low. While in markets in North and East India are badly hit.

BT: How are you hedging against rising costs?

JN: Leveraging the Almond Drops brands we are expanding into both - hair-care and skin-care categories. Over the next two to three quarters we will be launching new products to grow our portfolio from a single category to multi-category. Last year we started focusing on the online channels with digital first brand Natyv Soul. This is premium brand with 10-12 products, being placed on e-commerce as well as modern trade and premium retail outlets. The other brand - Bajaj 100% is also slowing picking up.

BT: Has Bajaj Consumer Care been able to leverage the growing demand on e-commerce channels?

JN: The share of e-commerce in our sales have surged to about 5 per cent from 0.5 per cent two year ago. First, the COVID induced behavioural changes among consumers helped as they preferred to buy online. And second, we actively pushed to increase our share in online channels as even before COVID while our competitors had a 3-4 per cent revenue share from online our’s was low. Meanwhile, others may have surged to 7-8 per cent but now we are confident that we can catch up fast.

Modern trade is another channel, where we were under-indexed. Now have managed to grow the share of modern trade channel towards our sales to 6.5 per cent and we would like take that to 8-9 per cent in the near future. Together, the modern trade and e-commerce shall contribute 17-18 per cent in coming years.

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