The Hindu Business Line : A manager of icons

An encounter with Chander Mohan Sethi, head honcho of Reckitt Benckiser (India), who claims the company tops almost every category in which it's present

CHANDER MOHAN SETHI, Managing Director, Reckitt Benckiser (India) — Bijoy Ghosh

Chander Mohan Sethi, Regional Director (South Asia), and Managing Director, Reckitt Benckiser (India), calls himself "media-shy." However, when he visited Chennai to launch the Dettol Surakshit Parivar programme, he had a pretty relaxed chat with BrandLine on his company's plans and strategies for India.

Sethi began his career as a branch manager at the same company (then called Reckitt & Colman of India) and has done stints with the company in Nigeria and West Africa. He is credited with being responsible for the company's entry and growth in various household product and personal care segments. The company, which has a host of familiar brands including Dettol, Mortein, Harpic, Lizol, Cherry Blossom and Brasso, is no longer listed on the stock exchanges after being acquired by Reckitt Benckiser Plc because it's still in an investment phase, says Sethi.

Excerpts from the interview:

Would you say Reckitt Benckiser (RB) is in the investment phase in terms of its brands in India?

Sure. The new products are in major focus. We've introduced more than 10 products in the last two years. There's no return on those products and we can't even break even on them for 3-4 years.

Some of Reckitt Benckiser's brands

Which are they?

Veet, Easy Off Bang, which we've just launched, there's Vanish Shakti, liquid vapourisers in Mortein, new Lizol variants, Dettol handwash - we're exceptionally investing in it. So there are a host of brands and sub-brands, or sub-segments in which we are rapidly putting in money. The BRIC report - people used to laugh about it 7-10 years ago but fact of the matter is, India is clearly well ahead. China is another animal, if you can crack China and India, you don't want to be anywhere else in the world. For Reckitt, India is a major investment centre. We earlier used to be about the twelfth largest company, globally, in our listing; today, we are the eighth largest. Today we are the fastest growing company of the size that we are, upwards of £100 million. We've been growing at about 20 per cent per year.

How much has Reckitt itself invested in India?

Well, the marketing spends were upwards of Rs 175 crore last year.

You have a variety of categories and all of them are pretty niche, apart from maybe the toilet soaps category (with Dettol), which is kind of mass.

I don't know, I don't know what is the definition of niche is ...

Predominantly urban ...

No, take the pest category, for example. In coils, the household penetration in urban India is 91 per cent, in rural it's 48 per cent. That's not niche by any standards. If you take even products like shoe polish, it's at least 30 per cent in rural

How big is Cherry Blossom as a brand?

About Rs 75 crore. We have 68 per cent of the Rs 120-crore market.

You are a major player in the cleaning products segment. There is a very big unorganised segment.

We are the leading household cleaning product company in the world. There's surface care - floors, toilets, baths, surfaces like refrigerators and glass ... we are what you may call moving the consumer from base products to specialised ones. For instance, what a detergent and water cannot do, a Harpic can. We stand not only for cleaning but also for germ protection.

Colin, the glass-cleaning brand, was acquired way back in the '90s; we have 93 per cent of the market. Brasso and Silvo still continue to be big brands with the armed forces. You can't be in the army and not have your belt absolutely shining.

Your brands are acquiring the status of a generic brand - is there a danger there?

Yes, in a way ... I call them iconic brands. Iconic because everybody else wants to follow - "Harpic ke jaisa, dettol ke jaisa" (It's like Harpic, like Dettol). In traditional trade they say, "It's just like Harpic, daam kam hai (but cheaper)." There is a danger, because there will always be value brands coming up.

The big issue for consumers is always going to be quality, continuous quality, or whether they will sub-optimise value with price.

They will!

There's no question, they will. In a country like ours, many consumers will be value-driven but there are a large number of consumers getting more and more conscious of quality.

If you look at urban India and the SEC A and B households, there are 60 million of them, of which the A and A+ ones account for five million - and they want the best.

The same question could have been asked about Maruti 15 years ago. The fact of the matter is, it exploded the entire market.

The entry point could be through value brands because there will be various brands - that's a danger - there will be continuous expense to be able to support your brands but it will also, I think, call for one more thing - continuous product upgrade and product promise which will have to be plus-plus.

Consumers must be confused about where to use which cleaning product. The difference is clear only in the commercials, not on the packs themselves.

If you don't communicate appropriately and continuously ... The issue is germ-protection virtually on everything - for the body, surfaces, but there's always a difference. Now, Lizol is a (bathroom and floor) cleaner with disinfectant, but not of the Harpic kind that tackles limescale. Yes, there are phenols, detergents, acids and so on but thanks to property prices going where they are, a person who's buying a Rs 50-lakh house is not going to allow the bathroom to be looking yucky. That's the evolution of what you might call upgrading of consumer life.

So which of these brands do you see as growth drivers?

Well, there are our international brands, Vanish Shakti (Oxy in other markets) Easy Off Bang, we've just launched a global brand called Finish for glass cleaning in dishwashers ...

It's a balancing act in terms of our existing portfolios like Mortein, Harpic and so on, which are still zooming. The penetration for many of these categories is still relatively small. The balance is between bringing in our international brands and at the same time continuing to invest in existing brands.

But the mosquito repellent is quite competitive, isn't it? How large is that?

It's estimated at Rs 1,200 crore. We are one-fourth of the market. As a company, Godrej Sara Lee is no 1, but it's got multiple brands - it's got Hit, Jet and Good Knight. All Out is way below, it's got 15 per cent of the market, we've got 25 per cent. I think the reason is that we used to be only in coils, but launched the all-insect killer in the aerosol format about a year ago, under the Mortein Fast Kill brand. Then we introduced Mortein liquid vapouriser.

In less than one year, we got 10 per cent of the market. In aerosols, in 18 months, we got 20 per cent, we used to be at 5-6 per cent. In rat kill, we've got 90 pc share - the evolution of the market is in electricals. In aerosols, we're small, but growing very rapidly.

How large is the toilet cleaner market?

It's upwards of Rs 135 crore, I mean what is tracked by Nielsen. Harpic accounts for more than Rs 100 crore, that's 80 per cent.

So you kind of created the market?

Yes, we launched it in ... I was just taking over as marketing director of the company, feel about 200 years old, actually (laughs) ... 1988. When we launched Harpic, I remember the Year One sales were Rs 8 crore. I was very clear it was going to be a very, very, large market. We've done about 65 million household knocks (to promote the brand house-to-house).

In all these categories, Disprin sticks out. It's a pharma product, the others are FMCG.

Yes, Disprin's the flagship in terms of healthcare for us ... It's the most trusted brand in terms of health, headaches. We make virtually zero money on it, just keep the brand alive because it's a health product ... at the same time we can't invest heavily in it.

So you're not growing the category?

We're holding our share.

Are you getting into more OTC drugs?

We just bought Boots International's OTC brands. We have brands like Clearasil, Strepsils and one of the biggest brands, Neurofen, in India. In the international portfolio, there's Fybogel, Lemsip, Senokot - we're now beefing up our healthcare division, that will be one of the global thrust area for us, as in India.

Is Veet growing?

Sure, 15 per cent in 18 months, 40 per cent in metros. The large size we stock has somewhat slowed the penetration, but it's interesting - none of the other brands, Fem, or Anne French, grew the market, or spent any money on it, but as soon as we came in, the market is getting active. It used to be absolutely flat for years together; it's now growing upwards of 25 per cent.

Are you looking at price increases?

Very marginally ... but am not sure, my view's that it's getting even more competitive. Modern formats are coming and they will force companies to be even more competitive. The imperative is one of growing volumes and growing shares if you are as big as Harpic or Dettol (80 per cent of the antiseptic liquid market) ... I think that being driven into the ground may not happen.