Sanitisers are no longer hot sellers, consumers are not including: Ullas Kamath, Jyothy Labs. The COVID-19 epidemic has changed the way Indians use products. As households occupy a middle class with home-based buyers, household food consumption has increased, while the need for self-preparation has diminished.
There is also a growing health trend among people, which has led to the emergence of several new product categories such as vegetable wash. Over the past year, FMCG companies have been using their toes to touch these patterns.
The James Laboratories, too, have contributed in these ways. The company has seen an increase in demand for its dishwasher products such as Pril and EXO, while sales of after-wash fabric products such as Ujala have also declined.
The company on Tuesday, while reporting its earnings for the fourth quarter of March, said it had seen a two-digit quarterly increase in areas such as personal care, household pesticides, dishwashing, and main wash. James Labs reported a 2.59 percent increase in aggregate profits to $ 27.28 in the March quarter of last financial year, due to a separate cost of Rs 23.5 crore. It sent a total profit of Rs 26.59 crore in January-March 2019-20. Performance earnings increased by 26 per cent to Rs 495.11 crore during the period under review compared to Rs 393 crore during the same period last year.
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Ullas Kamath, Joint MD, Jyothy Laboratories, in collaboration with Moneycontrol, talks about how the various uses have affected their business, the performance of newly introduced products such as sanitisers, over-disinfectant and vegetable washing, channel strategy, and the impact of the second epidemic. Edited quotes:
How has increased home consumption affected your product portfolios and has it continued?
Even since the last wave, we have seen an increase in demand for our dishwasher products such as Pril dishwasher and Exo dishwasher as consumers stay at home and eat more food at home. The category grew by about 35% in the last quarter. We have listed both these products as anti-bacterial so that helps with their growth. This practice must continue again. Similarly, consumers wash a lot of clothes for fear of infection, excessive washing, which has helped to take care of our fabric (the main wash) when we have Henko cleaning soap and Margo bath soap. About 85% of our products fall under the category of health and hygiene and see two-digit growth across.
But how do your fabric care products go, which contributes about 15% of your sales?
We have two back bath products – Ujala Supreme and Ujala Crisp And Shine. Although the Ujala Supreme is a piece of fabric and people use it casually while wearing it, we saw a 10-15 percent reduction year on year in the category. Schools are closed for most of the year and the product is used for school uniforms and this has had an impact on sales. But over time, we have seen recovery. Ujala Crisp And Shine has had an impact as people work from home and do not go to the office. Its sales have dropped by almost 50% year on year. Its sales will only recover as the offices are open. The impact of this on our overall sales is unseen as their contribution is small.
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We think the demand for these products will continue to be affected by the second wave but it will not be as bad as last year. With an increased focus on e-commerce and standard trading, we will be able to bring back some sales. Between the two products, Ujala Supreme will recover soon and Ujala Crisp And Shine will take some time.
What kind of pull have you seen in the newly introduced products such as overdose disinfectants, detergents, vegetable washers and hand washing?
The divine cleaners go well but the vegetable cleaners, which is a new category, are yet to start working. Consumers, in particular, housewives are reluctant to try products as they think washing their vegetables with water is enough. There is also a tendency to think that a product contains chemicals despite its ‘living’ messages. We have seen that it is a new phase and the discovery will take time.
We have had a similar experience with sanitisers. Sales of sanitisers have seen a drop in the middle of the first wave so far. Consumers no longer need sanitisers and only use them when needed so it is not a stockpile. Hand washing, however, has found a permanent place in the home.
What steps have you taken to reduce your reliance on the modern shopping department (CSD), which has contributed about 20% of your sales in pre-Covid times?
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We focus on mainstream trade and commerce. We already had the infrastructure set up in Indian cities so much effort was not required in the region. CSD delivery to a different segment of customers who will buy from the channel because it offers cheaper products. That took time to recover. All in all, we were able to manage the transition and since September, MT has returned. However, as large areas are now closed due to the closure, MT has become less affected and we are relying on kirana stores. The share of CSD and MT has dropped to 15 percent.
What steps have you taken to ensure continued product availability in rural India?
Rural India always brings big business to us and we understand this part well as our products like Ujala were originally run in the countryside. With this epidemic, home-based retailers in India have been hit hard. Their businesses were closed to avoid crowds. Therefore, we have decided to appoint sub-stockists in rural areas, who will act as wholesaler and cover 8-10 villages. We currently have 5,000 small shareholders across the country, 500 of whom were appointed last quarter. To continue we plan to continue adding some of them.
Given that several provinces are under closure, do you see an impact on sales?
Our products are in the top tier, so we do not expect it to affect our portfolio. The demand for our products exists and given its critical status, consumers put it in the event of a disaster. Also, even a small retailer sells products via WhatsApp today. Many stores have these types of services. We don’t see the collapse at this point.
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