The Hindu Business Line : Lotte to lure Indian palate with new products

CONFECTIONERY major Lotte is gearing up for a fight in the Indian market. The company is present in the country through two separate ventures - Chennai-based Lotte India Pvt Ltd and Delhi-based joint venture company Lotte DS Pvt Ltd. And each company is preparing to test the response of Indian consumers to products from Lotte's global brand basket.

After three months of extensive test marketing, Lotte India has decided to launch two global brands - chewing gum Spout and bubble gum Booproo. The Managing Director, Mr N.C. Venugopal, told Business Line, "We have been test marketing Spout and Booproo extensively in the South since January, and being satisfied with consumer response, we will launch these over the next few days."

Mr Venugopal said about Rs 3 crore has been invested in putting up new machinery to manufacture these products. After evaluating the market response to these two products, Lotte India may consider testing the Indian palate with mint lozenges, he said.

Meanwhile, Lotte DS is gearing up for the launch of new products in the country. The DS Group President, Mr Ashok Aggarwal, said the company has mandated AC Nielsen to conduct a thorough market research on consumer preferences in terms of taste, flavour and pricing so that the company can identify the products to bring here.

Mr Aggarwal said the joint venture company has decided to shift the location of its proposed 11-acre manufacturing plant from Solan (Himachal Pradesh) to Pantnagar (Uttaranchal). He said production should start by December, and confectionery products worth Rs 50 crore will be produced in the first phase of expansion.

Analysts said the fact that Lotte is present through two separate ventures indicates the emphasis on gaining a strong distribution foothold, which is crucial to surviving in the fiercely competitive Indian confectionery market. While Lotte India (erstwhile Parry's) has an established distribution network across the South, the joint venture with the DS group would leverage the latter's strength in distribution.

The DS group has access to 10 lakh retailers in what is known as the paan-beedi channel and to 15,000 dedicated wholesalers for its tobacco brands that include Baba chewing tobacco and Rajnigandha paan masala.

However, analysts said unless the two ventures work together to avoid duplication of global brands from the Lotte portfolio, they could end up confusing the consumer.

Mr Venugopal said Lotte India and Lotte DS are expected to discuss product synergies before the latter decides on its product basket.

Lotte India has indicated that it is also keen to enter categories such as chocolates, biscuits, snack foods and ice creams - products the Korean parent is already into.

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