Launch of Hair Care in

India
HEMAS India Pvt. Ltd.
4th April 2014

Overview

India at a glance A brief perspective

Launch of Hair Care company in India See-Do-Get
SEE

FMCG Sector in India

Hair Care Segment in India
Industry Analysis at a glance
Consumer shopping behavior in Hair care
Brands and their positioning

DO
Broad strategy overview 5 Step (5 Kadam) / Power of 5 (5 Ka Dum)
Organization Build up
Competencies and Skill Set
People Strategy
Other Important Factors

Distribution Strategy

GET
Milestones
Market Share Gain plan & Number Build up
Organization evolution
Revenue and P&L

WHY Us ?

SEE Part India, Indian FMCG

Market, Indian Hair Oil Market

INDIA At a Glance

Demographics of India

Population

1,236,344,631 (July 2014 est.)[1] (2nd)

Growth rate

1.51% (2009 est.) (93rd)

Birth rate

20.22 births/1,000 population (2013 est.)

Death rate

7.4 deaths/1,000 population (2013 est.)

Life expectancy

68.89 years (2009 est.)

male

67.46 years (2009 est.)

female

72.61 years (2009 est.)

Fertility rate

2.5 children born/woman (SRS 2010)[2](82nd)

Infant mortality rate

30.15 deaths/1,000 live births (2009 est.)

Age structure

014 years

31.2% (male 190,075,426/female 172,799,553) (2009

est.)

1564 years

63.6% (male 381,446,079/female 359,802,209) (2009

est.)

65 and over

5.3% (male 29,364,920/female 32,591,030) (2009 est.)

Sex ratio

At birth

1.12 male(s)/female (2009 est.)

Under 15

1.10 male(s)/female (2009 est.)

1564 years

1.06 male(s)/female (2009 est.)

65 and over

0.90 male(s)/female (2009 est.)

Nationality

Major ethnic

See Ethnic Groups of India

Language

Official

See Languages of India

INDIA At a Glance continued..

50% of Population < 25 years and 65% < 35 years; Average Indian age by 2020
expected to be 29 Years

India has more than two thousandethnic groups,and every majorreligionis

represented, as are four majorfamiliesoflanguages (IndoEuropean, Dravidian, Austroasiatic and Tibeto-Burman languages) as well as two language
isolates (the Nihali language spoken in parts of Maharashtra and the Burushaski language spoken in
parts of Jammu and Kashmir)

72.2% of the populationlives in about 638,000 villagesand the remaining 27.8%lives in

more than 5,100 towns and over 380urban agglomerations

INDIA At a Glance continued..

Rank State/Un Type Population
ion Terr
itory
28 + 1,210,193,4
TOTAL
India
7
22
3
4

Bihar

State 104,099,452

Males

Females Sex Rati Literacy Rural Pop Urban Pop

o

Area
(km)

833,087,6 377,105,7 3,287,24

62
60
0

Densit
y
(/km)

100

623,724,2 586,469,1
48
74

940

74.04

8.6

54,278,157 49,821,295

918

61.8

74,316,709 8,681,800

94,163

1,102

382

West Ben State

gal
Orissa State

91,276,115

7.54

46,809,027 44,467,088

950

76.26

57,748,946 22,427,251

88,752

1,030

41,974,218

3.47

21,212,136 20,762,082

979

72.87

31,287,422 5,517,238

155,707

269

State

32,988,134

2.72

16,930,315 16,057,819

948

66.41

20,952,088 5,993,741

79,714

414

14

Jharkhan
d
Assam

State

31,205,576

2.58

15,939,443 15,266,133

958

72.19

23,216,288 3,439,240

78,438

397

22

Tripura

State

3,673,917

0.3

1,874,376

1,799,541

960

87.22

2,653,453

545,750

10,486

350

2,966,889

0.25

1,491,832

1,475,057

989

74.43

1,864,711

454,111

22,429

132

24

Meghalay State
a
Manipur State

2,855,794

0.21

1,290,171

1,280,219

992

79.21

1,590,820

575,968

22,327

122

25

Nagaland State

1,978,502

0.16

1,024,649

953,853

931

79.55

1,647,249

342,787

16,579

119

27

Arunachal State
Pradesh
Mizoram State

1,383,727

0.11

713,912

669,815

938

65.38

870,087

227,881

83,743

17

1,097,206

0.09

555,339

541,867

976

91.33

447,567

441,006

21,081

52

610,577

0.05

323,070

287,507

890

81.42

480,981

59,870

7,096

86

380,581

0.03

202,871

177,710

876

86.63

239,954

116,198

8,249

46

11
13

23

29
31

32

Sikkim

State

Andaman a UT
nd Nicoba
r Islands

INDIA At a Glance continued..

Rank

India/State/UT

3
8
9
11
16
22
24
25
26
27
28

Bihar
Orissa
Assam
Jharkhand
West Bengal
Nagaland
Manipur
Mizoram
Meghalaya
Sikkim
Tripura
Andaman and Nicobar
Islands
EAST
INDIA

30
EAST
Total

No. of
No. Districts
Districts in
in 2001
2011
37
38
30
30
23
27
18
24
18
19
8
11
9
9
8
8
7
7
4
4
4
4

without any
geographical
change
34
26
15
9
17
4
9
4
4
4
2

168
593

184
640

129
464

Composition

Hindus Muslims

Christia
ns

Sikhs

Buddhi
st

2.30%

1.90%

0.80%

Jains Others1

% total of population 2001

80.50%

13.40%

10-Yr Growth% (est '91'01)[32]

20.30%

35.50%

944

940

75.50%

60.00%

40.4

31.3

39.7

37.7

40.6

32.9

48.4

1000

953

1001

895

958

937

995

Urban sex ratio[32]

922

907

1026

886

944

941

966

Child sex ratio (06 yrs)

925

950

964

786

942

870

976

No. of females/1000 males. (avg.

= 944)
Literacy rate (71.7% for Age 7 and
above)[33]
Work Participation Rate
Rural sex ratio[32]

0.40%

0.60%

22.60% 18.20% 24.50% 26.00% 103.10%

1009

895

955

940

1000

90.30% 70.40% 73.00% 95.00%

50.00%

INDIA At a Glance continued..

Largest cities or towns ofIndia

Census India, 2011[43]
Rank

Mumbai
Delhi

Name

State/UT

Name

State/UT

Mumbai

Maharashtra 12,478,447

11

Lucknow

2,815,601

11,007,835

12

Kanpur

8,425,970

13

Nagpur

Uttar Prades
h
Uttar Prades
h
Maharashtra

Delhi

Delhi

Chennai

Tamilnadu

Hyderabad Andhra Prad

esh
Bangalore Karnataka

6,809,970

14

Indore

1,960 521

5,570,585

15

Thane

Madhya Pra
desh
Maharastra

4,681,087

16

Bhopal

Ahmedaba Gujarat
d
Kolkata
West Bengal

4,486,679

17

Surat

Gujarat

4,462,002

18

Pune

Maharashtra

3,115,431

10

Jaipur

Rajasthan

3,073,350

5
6

Pop.

Rank

Pop.

2,767,031
2,405,421

1,818,872
1,795,648

19

Madhya Pra
desh
Visakhapa Andhra Prad
tnam
esh
Pimpri-Ch Maharashtra
inchwad
Patna
Bihar

20

Ludhiana

1,613,878

Punjab

1,730,320
1,729,359
1,683,200

Chennai
Hyderabad

India Summarised
Labor cost (USD/Year)
25000

21317

20000
15000

10743

10000
5000
0

729

1008

1192

2450

2705

3429

Indices
Population 2001-02 (Mn
Household)
Population 2009-10 (Mn
Household)
% Distribution 2001-02

Urban

Rural

53

135

69
28

153
72

Market (Towns/Villages)

3,768 627,000

Universe of FMCG Outlets ('000)

Around 70% of total household (188 million) resides in Rural area

1,000

3,300

An average Indian spends around 40% of his HHI (household Income) on Grocery and only 8% on
Personal Care

Rapid Urbanization (estimated to be around 37% by 2013), increased literacy rate and rising per capita
income have led to explosive growth rates across sectors

Also Indian population is reasonably young Around 45% of Pop < 25 years of age

Also Labour cost / worker in India is amongst the lowest in the world. This coupled with an diverse agroclimatic condition resulting in abundant raw materials, make India a major sourcing hub for the world

FMCG Sector Salient Points

The Indian FMCG Sector is the 4th largest sector in the economy and creates
employment of over 4 Mn people

The critical operating rules in Indian FMCG Sector are

Heavy launch costs of new product on launch adverts, free samples, product promotions etc
Majority of product classes require very low investment in fixed assets
Existance of Contract Manufacturing
Significant need and scope of brand building
Extensive distribution network and logistics are key to achieving high level success
Factors like low entry barriers in terms of Low capital investment, fiscal incentives from
government, low brand awareness in rural areas have led to mushrooming of a large unorganized / commodities sectors
Providing good price points is key to success
Household use of an FMCG product predominantly Once a month purchase..at most Twice a
month
Lower Unit Packs (LUP) aid in (1) increasing visibility (2) Rural small village penetration (3)
Sampling/First time trials (4) Users on the go

FMCG Sector Salient Points..contd.

Third Party / Contract Manufacturing Benefits associated with contract

manufacturing are,
Flexibility in production and inventory planning
Flexibility in controlling labor cost
Logistics Sometimes its essential to get the product manufactured/packed and
sold near to or at the heart of the market

High Initial launch cost As much as 100%-150% of launch revenue

goes into marketing, advertisin, brand building, distribution network
build up and organization build up

Small scale sector in India enjoys exemption in terms of lower excise

duty, sales tax etc.

Highly scattered market and poor transport infrastructure entailing high

transit time limits the ability of large branded players to reach the
heart of rural market, thereby reducing scope of brand building in rural

FMCG Sector SWOT Analysis

STRENGTH
Low operational cost
Established distribution network
across Urban and Rural
Presence of well known brands
HUL, Marico, Dabur
Presence of many regional players
Dabur, Cavincare, Godrej

WEAKNESS
Lower scope of investing in
technology
Still Low Export Levels
Me too products (illegal
mimicry) narrowing scope of
brand building in Rural
Fragmented Industry

OPPORTUNITIES
Untapped rural markets
Increase in purchasing power of
consumers
Rapid increase in urbanization
Large domestic market
Scope for many strong Regional
players
Regular consumable industry

THREATS
Removal of import restrictions
resulting in replacement of
domestic brands [an opportunity
for us]
Slow-down in rural demand [still
agricultural cycle dependant
economy]
Tax & regulatory structural change
High Inflation

FMCG & Hair Oil Sector at a glance

FMCG Industry Size
INR 133,876 cr. (USD 29.8
Bn)

Hair Care Industry Size

INR 10,243 cr. (USD 2.3 Bn)

Shampoo
INR 3,277 cr. (USD 728
Mn)
[32%]

Coconut Based Oil

50%

Perfumed Oil
INR 3,175 cr. (USD 705
Mn)
[31%]

Heavy Amla Based

Oil
15%

Coconut Oil
INR 2,151 Cr. (USD 478
Mn)
[21%]

Light Hair Oil

13%

Hair Conditioner
INR 204 cr. (USD 45
Mn)
[2%]

Hair Dyes
INR 1,434 cr. (USD
319 Mn)
[14%]

Cooling Oils
12%

Hair care sector is ~ 10% of Indian FMCG industry

Hair Oil is 50% of Indian Hair care industry

Perfumed Oil + Coconut Oil ~ 52% of sector

Coconut based oil is 50% of Market

Others
10%

Indian Hair Care Market

Salients points of 2012

Hair care increased by 18% in 2012 value terms
Consumers willing to spend more and try salon hair care products at home
aids value growth
Colorants sees the fastest value growth
HUL led hair care category with 17% value share

Due to varied consumption habits of consumers, wherein

coconut oil and edible oil is interchanged, the actual hair oil
industry may even be bigger than pegged
Perceived benefits of Hair oil
Hair nourishment & strengthening
Faster and better hair growth
Reduce problem of falling hair

Basically two types of Hair oil

Coconut based hair oil 2/3rd of the market ~ 72% share
Non greasy perfumed hair oil 1/3rd of the market

Penetration of Hair oil very high at close to 87~88%

In the branded hair oil market, Marico (Parachute brand) and
Dabur are the leading players

Some Consumer research insights

Preferance for Place of Purchase for
Consumers
Attributes
Female
Male %
29.5
Supermarket 29
30
%
19.5
Mall
15
24
%
Tradtional
53
39
46%
Shop
E-Shopping
3
7
5%
Income expenditure on product
categories

Purchasing Pattern of Consumer

Attributes

Female

Male %

Weekly

10

7.5%

Fortnightly

27

20

23.5
%

Monthly

63

75

69%

Parameters that affect buying

decisions

Attributes

Responses %

Attributes

Responses %

Laundry

63

31.5%

Quality

65

32.5%

Skin Care

49

24.5%

Hair Care

54

27%

Price

86

43.0%

Oral care

34

17%

Easy Availability 49

24.5%

46% purchase from traditional shops

69% purchase on a monthly basis sku size high
As high as 27% of monthly HHI goes behind hair

Hair Oil Market Growth

Volume (K Ltrs)
300,000
250,000

Value (INR Cr.)

CAGR
16.5%

7,000

200,000
Volume (K Ltrs)

150,000

6,000

CAGR 20 %

5,000

100,000

Value (INR Cr.)

4,000

50,000

3,000

2,000
1,000
06-07 07-08 08-09 09-10 10-11 11-12

FY
06-07
07-08
08-09
09-10
10-11
11-12

Volume (K Ltrs)
132,500
173,000
208,000
231,000
246,000
280,000

Value (INR Cr.)

2,827
3,707
4,498
4,972
5,262
6,824

ASP (Per Litre)

213.36
214.28
216.25
215.24
213.90
243.71

Some Points to note on Hair Oil industry

New Entrants in Last 5 Years that did well

Antidandruff Hair oil under the name Mediker by Marico
Large number of launches in Cooling Oil market eg. Him Gange etc.
Herbal Oil Entrants Veola by Bajaj Herbal, Parachute Ayurvedic Hair Oil by
Marico

New Entrants that didnt do well

Marico Ltd. Launched Mahathanda stayed a weak regional player
Sampoorna, under Coconut oil category by Marico failed
Keo Karpin failed to sustain its market leadership position and market got
dominated by Bajaj Almond Drops hair oil
Meera erbal hair oil by Cavincare failed to be a national player and remained a
competing South indian player

Evolution of Hair Care Distribution

Channel in India

Traditional Established Formats

formats
Kirana Shops
Itinerant
salesman
(cycle boys)
Haats & Moles
Mandis etc.

Emerging Formats

EBOs/Shop-in-shops
Department/Convenienc store Hypermarkets
Company Owned / Multi-brand Internet Retail
Malls/Specialty Malls
showrooms
E-choupals
PDS/Fair Price Shops
Haats/Mandis
Co-operative Stores
Direct Sales Agents
Paan/Beedi Shops
Railway Stations/ Inside trains
Medicine Stores
Saloor / Hair Spas
Cosmetic Stores

In-depth Study of some competing Hair

Oil brands in India
DABUR AMLA
General Details

Parent Co.
Category
Sector

Dabur
Personal Care Brands - Hair Care
FMCG

Tagline/Slogan

Zyada lambe, Zyada Majboot, Zyada Khubsurat Baal' 'Asli Amla, Dabur Amla'

USP

Largest Hair Oil brand in India

Segment

STP
Hair Oil segment with natural ingredients

Target Group

Youth & middle agead Men & Women

Positioning

Contains the nourishment of Amla that makes hair strong from inside, longer, more dense and
beautiful from outside
SWOT Analysis
1. Established product from a trusted Brand/Company Name
2. Provides Shine and softness that makes hair healthy from inside

Strength

Weakness

Opportunity

3.
4.
5.
6.

Contains trusted natural ingredients like Amla

Strong distribution network across the country
Celebrity/Film Star endorsed brand
Strong Regional player also - East

1. Preferred by loyal customers only as brand positioning does not connect with Urban youth
2. Sticky & oily - stains shirt/pillow etc at night
1. Further Rural Penetration
2. Export Potential
3. Innovation based on strong platforms - Natural, Non coconut based ingredient etc.
1. Aggressive competitors coming in with better product positioning

Threat

2. Brand saliency high in East - So if competition impacts East Market negatively, it will create
Pan India problems for the brand
Competition

Competitors

1. Marico's 'Shanti Amla'

2. Bajaj 'Brahmi Amla' hair oil
3. Emami Plus Hair Oil

In-depth Study of some competing Hair

Oil brands in India
Parachute
General Details

Parent Co.
Category
Sector
Tagline/Slogan
USP

Marico
Personal Care Brands - Hair Care
FMCG
"Gorgeous Hameshaa" ["Forever Gorgeous"]
100% Pure Coconut Oil
STP

Segment

Appearance and Health conscious people from all ages

Target Group

Women of all ages in both Urban & Rural pop strata & Young & appearance conscious consumers

Positioning

Positioned on the platform of Purity

SWOT Analysis
1. Category market leader; high saliency in both urban & rural consumer base

Strength

2. brand has remained relevant and differentiated through various packaging and
communication initiatives
3. Brand has remained young
4. Has diversified into other hair care sub-categories like Shampoo
5. One of the most recognized and trusted brand
1. Innovations (like "personal massager") was available only in select cities

Weakness

2. The original parachute oil solidifies in winter season

3. Seasonal product

Opportunity

1. Can diversify into skin care, more aspirational sub-categories like Hair grooming etc
2. Move into non-coconut based other natural ingredient based hair care products
1. Many players are entering the market; The category is getting more competitive

Threat

2. Competition are successfully moving away from "coconut based oils" into other products like
Amla, Almond etc
Competition

Competitors

1. Dabur
2. Emami Navratna
3. HUL

Other Important points to note

Price offs/Extra Quantity seem to the most preferred method of sales

promotion in Indian Hair Care industry
75% of the retailers perceive that sales promotion is of the duration Less
than 3 months
Research reveals that scheme is best communicated to the entire
distribution (retailer) universe through the Wholesaler recommendation
[~45% of retailers state that they knew the scheme from the neartest
wholesale mandi; 25% retailers heard the scheme through company
personnel; 20% read about it in Print Media and only 10% through
electronic media

HEMAS India Strategy DO Part

HEMAS India Strategy DO Part

HEMAS Indias 5 Elements are
People Winning Team that
will deliver results

PEOPLE
PEOPLE
Build
Build a
a
winning
winning
Organization
Organization

100
100 Cr.
Cr. In
In
Year
2
Year 2 -Milestones
Milestones

PRODUCT
PRODUCT
What
What kind
kind of
of
products
products
may
may workl
workl

Product High quality

products that would fulfill the
need state of consumer
[Kumarika]
Placement Have a clear &
focussed distribution blue print
plan in place

PROMOTION
PROMOTION
Trade,
Trade, BTL,
BTL,
ATL
ATL Strategy
Strategy

PLACEMENT
PLACEMENT

Distribution
Distribution
Blue
Blue Print
Print

Build a Winning, Innovating, Evolving

Organization

Start with all markets catering to 1 Lac

Population
Have Real Good Distributors [RGD] in
place An RGD is the number 1/2/3
distributor of Hair Care industry in that
market who would provide us
Investment, Involvement and
Infrastructure required to build a
Number 1 brand

Promotion Right Trade

promotion, ATL, BTL strategy
Destroy Competition Build
a 100 cr. Power brand within

Build Team Organization Structure overview

Core Values

People Skill Set

Passion for Customer

Obsession for Performance
Driven by Innovation
Concern for People

Purpose of Hemas India

To Passionately deliver Outstanding Products

and Services thus Enriching the Lives of our
Customers and creating Superior Value to
our Shareholders

Broad Company S&D

Structure

CEO Co. Mentor; drive culture

quotient of the organization
COO Operations, Profit Centre
Head
Sales Head Will Manage Revenue,
Distribution and all Sales
Operations
Branch Head Profit Centre Head of
a branch; Mini COO of the Branch
Sales Officers Drive Sales &

Dynamic young MBA professionals

in the field managing RGD
Ably mentored by seasoned
professionals from FMCG, Telecom,
Mobile devices industry Bring in
Distribution, Operations, Business
orientation, Ownership
Launch My HEMAS going forward

Broad Company Other functions

Marketing Head Will manage

Product/brand portfolio and evolution; Will
also drive ATL strategy (Advertising;
Endorsements etc.)
Marcom Head Will manage Trade
promotions/Activation; consumer connect
activation @ POS all BTL strategy
Production Head Will eventually manage
supplies/production from 3rd party or own
Finance Head Will manage finance,
commercial & compliance/legal aspects as

HEMAS India Organization Chart

Finance Manager

Branch Manager Orissa

Sales Officers - 1 SO
for every 10 RGDs; 1
RGD for every 5 L:ac
Pop

YEAR 1 - MANPOWER ON-BOARDING PLAN AND COSTS

Country
Manager

Sales & Marketing

Production
Head
Manager

Product Manager /

Brand Manager

Branch Manager Jharkhand

Sales Officers - 1 SO
for every 10 RGDs; 1
RGD for every 5 L:ac
Pop

Branch
Manager West Bengal

Sales
Officers - 1
SO for every
10 RGDs; 1
RGD for
every 5 L:ac
Pop

Branch
Manager Bihar

Sales
Officers - 1
SO for every
10 RGDs; 1
RGD for
every 5 L:ac
Pop

HR & Admin
Manager

HR & Admin
Executive

Branch
Manager NESA

Sales
Officers - 1
SO for every
10 RGDs; 1
RGD for
every 5 L:ac
Pop

Function wise Sales & Distribution

HR& Admin Head

Nos
CTC

Total Sales
Cost

Nos

CTC

Travel Cost

Admin
Cost

Other Cost

Total Cost

100,000

Total Cost

Sales & Marketing

Head

200,000

Other Cost

500,000

Admin
Cost

1,500,000

Travel Cost

2,300,000

149,884,826
1
3,500,000
1,500,000
200,000
100,000
5,300,000

Country Manager

Nos

CTC

Travel Cost

Admin
Cost

Other Cost

Total Cost

5,000,000
1,800,000
200,000
100,000
7,100,000

CTC

Travel Cost

Admin
Cost

Other Cost

Total Cost

CTC

800,000

200,000

100,000

2,600,000

Total Cost

Branch Manager Jharkhand

Branch Manager - Orissa

Nos

CTC

Other Cost

60,000

Total Cost

1,125,000

100,000

60,000

2,785,000

60,000

2,785,000

1,500,000

100,000

1,125,000

1,500,000

60,000

2,785,000

Branch Manager NESA

100,000

1,125,000

60,000

2,785,000

1,500,000

100,000

1,125,000

1,500,000

100,000

1,125,000

Admin
Cost

1,500,000

Travel Cost

Branch Manager Bihar

2,785,000

HR & Admin
Executive

CTC

Travel Cost

Admin
Cost

Other Cost

Total Cost

1,500,000
500,000
200,000
100,000
2,300,000

500,000

375,000

100,000

60,000

1,035,000

Nos

YEAR 1 = Sales Officers - 1 SO for every 5 RGDs; 1 RGD for every 5 L:ac Pop

Admin
Cost
Other Cost

Nos

Travel Cost

Branch Manager West Bengal

1,500,000

Finance Manager

Nos

Production
Manager / Product
Manager

ORISSA

JHARKHAND

WEST BENGAL

BIHAR

NESA

Popln.

41974218

32988134

91276115

104099452

45161611

Nos RGD
Plan

84

66

183

208

90

Nos

17

13

37

42

18

CTC

500,000

Travel Cost

375,000

Admin
Cost

25,000

Other Cost

25,000

Total Cost

TOTAL
BRANCH
S&D
Salary
COST

15,530,461

375,000

25,000

25,000

18,315,461

500,000

12,205,610

14,990,610

500,000

375,000

25,000

25,000

33,772,163

36,557,163

500,000

375,000

25,000

25,000

38,516,797

41,301,797

500,000

375,000

25,000

25,000

16,709,796

19,494,796

Kumarika
Natures way to beautiful hair, Kumarika. Formulated
Kumarika
with the goodness of indigenous herbs and natural
ingredients, trusted by generations of Sri Lankan
Women, the Kumarika range of hair care products
repair and nourish your hair leaving it radiant and
beautiful.
o Formulated with the goodness of indigenous herbs
and natural ingredients
o Kumarika makes your hair look healthier and
vibrant
o A range of products on offer for daily use
Kumarika has been used in Sri Lanka Australia,
Bangladesh, Jordan, France, Dubai, United Kingdom,
Pakistan, Indonesia, New Zeland, West Indies and
more

Herbal Hair Oil

Lime & Dill Hair
Oil

King Coconut Oil & Rice

Hair Oil

Kumarika Brand Positioning

Hemas Hair Oil - Eg. Kumarika
General Details
Parent Co.
Category
Sector
Tagline/Slogan

HEMAS
Personal Care Brands - Hair Care
FMCG

USP

100% Pure, Natural Hair Oil; Gives confidence and brings in purity to
Young Women; Freshness of Nature; Brings out inner purity

Segment
Target Group
Positioning

Packaging

STP
Appearance; Health conscious; Aspirational Women
Women of all ages; Urban & Rural; Focus group - Young upmarket - 1830 years
Positioned on the platform of purity and Natural ingredients;
Aspirational as brings out inner self confidence and goodness (purity) of
women
Bottles - 75 ml, 150 ml, 300 ml
Flip Cans - 300 ml, 500 ml
Sachets - Re 1/- & Refill Packs - 150 ml

Kumarika Price, Quality Strategy Grid

Quality

Middle
Premier Offering

Low
Ideal for Penetration

Kumarika King
Coconut Hair Oil /
Lime & Dill Hair Oil

Kumarika King
Coconut Hair Oil

Packaging

High
Luxury Segment
Kumarika - Lime &
Dill Hair Oil / King
Coconut Hair Oil /
Herbal Hair Oil
Bottle; Flip Cans

Bottles; Refill Pack

Small Pack; Sachets

Attributes

Over Priced

Average

Real Bargain

Attributes
High

Medium

Brands

Brands
Packaging
Attributes

Low

Price

Brands
Packaging

Kumarika - Lime &

Dill Hair Oil / King

Coconut Hair Oil /

Shampoos
Bottle; Flip Cans
Bottles; Refill Pack
Make the Sale & Run Unhappy Customer
Local Commoditised Local Commoditised
Hair Oils
Hair Oils
Small bottles;
Medium/Small
Owned bottles for
bottles
refill

Kumarika King
Coconut Hair Oil &
Shampoos
Small Pack; Sachets
Cheap Goods
Local Commoditised
Hair Oils
Small bottles;
Owned bottles for
refill

Important Points on Distribution

Competition (Dabur) Supply Chain

29 factories; 47 Stocking Points; 4 Regional offices; 6 mother warehouses;
50 CFAs; 1000 SKUs
Hemas India (East)
6 CFAs [Patna (Bihar), Ranchi (Jharkhand), Kolkata (Kol Metro; ROB),
Siliguri (North Bengal & Sikkim), Guwahati (NESA), Bhubaneshwar
(Orissa)]
1 Regional Office (Kolkata); 5 Branch offices in the 5 CFAs

MIS
Need In-house developed, easy-to-use, Intranet/Internet (with VPN) based
data-warehouse displays, as-of-yesterday sales, recievables, banking &
other KPI measurement dashboard MIS
Dabur has incorporated an MIS system comprising of over 5000 pages of
reportin of various data points
Initially work on Tally / Oracle based system; SAP/ERP based to be launched
within 2nd year of operation in India

Important Points on Distribution..continued

VSAT continued
Bsaically extension to MFG/Pro ERP system allowing Branch
Managers to
plan monthly sales forecasts
Stockists (RGD) & Team performance

This system will ensure end-to-end integration of supply chain

thereby allowing for
Better control on Pipelines in Primaries and Secondary sales
Optimise Inventories
Offer better control over Production & Sales against confirmed 3 month rolling
forecast

System will eventually evolve to automated data based rolling

target/forecast setting SKU wise at the last grain (RGD level) and
therefore allow for auto-replenishment once stocks SKU wise are
frozen for the month
The basic idea is to shift Field Sales Team focus from Primaries to
Secondaries and eventually Tertiaries (off-take)
However at launch phase Primary focus single biggest task to set up
the revenue flow engine

Planned Distribution Vision

Mother warehouse / 3rd Party Factory

Carrying & Forwarding Agents

Urban/Semi
-Urban RGD

Modern
Trade RGD

Super Stockist
RGD

Wholesalers
Micro
Distributors
Urban
Retail Trade
Rural Retailers

DSA
Direct Sales
Agents
(Women)
Education &
Sales

B2B /
Institutiona
l Trade

END CONSUMERS / END USERS

Modern
Trade Retail

Planned Distribution Vision

East, 21% South, 23%

North, 29%

West, 27%

Geographical breakup of Sales

Corporate office Kolkata, West Bengal, East India

Mother ware house to be also based out of Kolkata in Phase 1; Phase 2, set
up a secondary warehouse in Chennai [Ease of Raw materials movement
from SriLanka]
Phase 2 5 regional offices Kolkata [East], Mumbai / Navi Mumbai [West],
Noida/Gurgaon [North], Chennai [South], Bhopal [Central]
28-30 Branch offices in Phase 3
Each Branch offices to serve as SBU (independent profit centres) in the long
run

Launch Plan - Milestones

Kolkata Regional &
Country Head Office
West Bengal 1st state to
Launch :
100% penetration in 5
months
64k Retail outlet
Universe in 61 cities
Jharkhand & Bihar 4th
month launch:
39k Retail outlets in 36
cities
100% penetration within
1st 5-6 months of launch

Orissa 5th month launch:

11k Retail outlets in 10
cities
High Hair Oil usage
saliency as Pop mix of
Bengal and South India
(Andhra)

Assam & NESA 6th month

launch:
9k Retail outlets in 9
cities
High wholesale saliency
Unchartered hills/tribal
pop coverage through
wholesale

Man-power onboarding Plan

HEAD

M1

Planned MOM Revenue (Sales

Forecast)

M3

M4

M5

M6

M7

M8

M9

M10

M11

M12

492,499 3,287,57 6,627,30 11,225,73 17,402,49 30,008,54 41,017,86 49,863,05 60,720,26 69,659,24 70,521,00 77,557,95
.18
6.70
6.42
0.32
0.94
1.96
1.70
1.59
4.65
6.64
4.78
6.99

MANPOWER ONBOARDING

PLAN
Country Manager
Sales & Marketing Head
Finance Manager
Production Manager
HR & Admin Manager
HR & Admin Executive
Product / Brand Manager
Market Activation Manager
Branch Manager
Sales Officers (S.O.) - 1 for
every 5 RGD - year 1

Nos. of RGD Planned - 1 RGD

for 5 Lac Pop
Nos of Retail coverage
Planned
Nos of DSE Planned
Avg DSE / RGD
Avg retailer per DSE

M2

1
1
1
1
1
1

1
1
1
1
1
1

1
1
1
1
1
1

1
1
1
1
1
1

1
1
1
1
1
1

1
1
1
1
1
1

1
1
1
1
1
1
1
1
5

1
1
1
1
1
1
1
1
5

1
1
1
1
1
1
1
1
5

1
1
1
1
1
1
1
1
5

1
1
1
1
1
1
1
1
5

1
1
1
1
1
1
1
1
5

13

14

19

20

25

26

32

32

32

32

36

64

68

95

100

127

131

159

159

159

3210
86
10
38

6419
133
5
49

12562
234
7
54

20658
389
7
54

31092
568
9
55

43377
780
9
56

57564
1015
11
57

67939
1191
10
58

80322
1398
11
58

89463
1550
10
58

95701
1656
11
58

102204
1760
12
59

Corporate office Kolkata, West Bengal, East India

Mother ware house to be also based out of Kolkata in Phase 1; Phase 2, set up a
secondary warehouse in Chennai [Ease of Raw materials movement from SriLanka]
Phase 2 5 regional offices Kolkata [East], Mumbai / Navi Mumbai [West],
Noida/Gurgaon [North], Chennai [South], Bhopal [Central]
28-30 Branch offices in Phase 3
Each Branch offices to serve as SBU (independent profit centres) in the long run

Planned BTL Budget utilization

HEAD

Year 1

Planned MOM Revenue (Sales Forecast)

Year 2
2,102,784,377.6
8

438,383,531.86

MANPOWER ONBOARDING PLAN

Country Manager

Sales & Marketing Head

Finance Manager

Production Manager

HR & Admin Manager

HR & Admin Executive

Product / Brand Manager

Market Activation Manager

Branch Manager

32

32

159

159

123202

123202

Sales Officers (S.O.) - 1 for every 5 RGD year 1

Nos. of RGD Planned - 1 RGD for 5 Lac

Pop
Nos of Retail coverage Planned

Launch Plan P&L Forecast Year 1

In Rs'000
Net Sales

M 1,2,3
Q1'FY14
10,407,382

% of Sales
Employee Cost
% of Sales

% of Sales
S&D Cost
% of Sales
IT & Admin Cost
% of Sales
Other Cost
% of Sales
Total Cost
% of Sales
EBITDA
% of Sales
Interest Exp. & Fin. Charges
Depreciation & Amortization
Profit Before Tax (PBT)
% of Sales
Exceptional Item

438,383,532
0

6,244,429
60%

35,182,058
60%

90,960,707
60%

130,642,925
60%

263,030,119
60%

8,121,957
78%

11,293,905
19%

13,310,308
9%

15,132,580
7%

0%

0%

20,000,000
34%

20,000,000
13%

20,000,000
9%

60,000,000
14%

3,507,846
34%

18,133,191
31%

45,108,294
30%

64,366,552
30%

131,115,883
30%

520,369
5%

2,931,838
5%

7,580,059
5%

10,886,910
5%

21,919,177
5%

520,369
5%

2,931,838
5%

7,580,059
5%

10,886,910
5%

18,914,970
182%

90,472,830
154%

184,539,427
122%

251,915,878
116%

545,843,106
125%

(8,507,588)
-82%

(31,836,067)
-54%

(32,938,249)
-22%

(34,177,670)
-16%

(107,459,574)
-25%

104,073.82

586,367.63

1,516,011.78

2,177,382.08

4,383,835

208,147.65

1,172,735.26

3,032,023.56

4,354,764.17

8,767,670.64

Tax Expenses
Provision for Taxation for Earlier Years
PAT (Before extraordinary items)
% of Sales
Extraoridinary Item

(8,819,809.56)
-85%

1,300,922.79

(33,595,169.92)
-57%

7,329,595.40

217,738,208

FY 14-15

151,601,178

M 10,11,12
Q4 FY'14

Ad Pro Cost

58,636,763

M 7,8,9
Q3 FY'14

Other Operating Income

Material Cost

M 4,5,6
Q2 FY'14

(37,486,284.46)
-25%

(40,709,815.92)
-19%

18,950,147.24

27,217,276.05

21919176.59
5%

(120,611,079.86)
-28%
0

54,797,941.48
0

(10,120,732.35)
-97%

(40,924,765.33)
-70%

(56,436,431.70)
-37%

(67,927,091.97)
-31%

(175,409,021.35)
-40%
0