Financial Daily from THE HINDU group of publications
Saturday, Jul 17, 2004
Financial Daily from THE HINDU group of publications Saturday, Jul 17, 2004 |
||
|
|
||
|
Marketing
-
Strategy LG Care mulls sachet route to stay ahead in FMCG market Sindhu J. Bhattacharya
Mr Aravind Pandalai, CMD, State Trading Corporation, flanked by Mr K.P Jayaram, Chairman (left), India Household and Healthcare Ltd, and Mr Vijay R Singh, MD, at the launch of LG Care products, in the Capital on Friday. — Ramesh Sharma
New Delhi , July 16 HAVING realised that growth in the Indian FMCG market can come only by driving volumes through smaller packaging at lower price points, Korean major LG Care is studying the option of taking the sachet route. For the first time in its operations anywhere in the world, the company has begun work on designing packaging in the Rs 3-5 range specifically for the Indian market. The company operates in India through its sole licensee India Household and Healthcare (India HHL). "LG Care has realised the importance of being present in the smaller packaging segment of the Indian FMCG market since this market is generating only volume growth without commensurate growth in value. We have discussed the sachet concept with the Korean company and the packaging is being designed," India HHL's Managing Director, Mr Vijay R. Singh, told Business Line. While he declined to divulge any further details regarding pack sizes and possible pricing of these sachets, sources said the company was considering a pack size of up to Rs 3 for shampoos and Rs 5 for detergents. At present, LG Care's Double Rich Shampoo brand is present in four pack sizes of 40 ml, 100 ml, 200 ml and 400 ml with prices ranging from Rs 39 to Rs 110. Again, the Super Enz detergent brand is sold in half-kg and 1-kg packs at Rs 99 and Rs 159, respectively. LG Care is expected to enter the highly competitive sachet market within the next six months but will confine this pack size to shampoos and detergents at present. Meanwhile, announcing the launch of LG Care products in North India, India HHL also signed an MoU with the State Trading Corporation here on Friday. Under the agreement, STC will disburse Rs 100 crore for the first year while facilitating the imports of LG Care products into India. Besides, LG Care also launched its range of seven premium products, including toothpaste, shampoos, detergents, cleaners, soaps and diapers, across the Northern markets. This range will soon be expanded to cosmetics and hairstyling products. Eyeing Rs 150-crore sales turnover within the first year of operations, India HHL aims to achieve Rs 500-crore sales over the next three years, having earmarked Rs 100 crore as advertising and marketing budget over this time period. Asked when the company was expecting to break even in India, Mr Singh said, "We are not expecting any profit in the first three years of operations." He said the Korean major plans to set up its manufacturing base in India once the turnover crosses Rs 450 crore but declined to provide any further investment plans of LG Care.
More Stories on : Strategy | Personal Products
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2004, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|