Bajaj Consumer Care, the country's leading hair oil maker, has been in business for nine decades but the recent macroeconomic scenario post-COVID has tested its resilience. The Mumbai-based company is facing a lot of challenges due to several challenges, from steep inflation to changing consumer behaviour and lack of disposable income. Jaideep Nandi, the Managing Director of Bajaj Consumer, tells Business Today that the company is steering clear of the troubles and ready to take the competition head-on. What will be the impact of the rise in commodity prices in the past?
Jaideep Nandi: It is a double whammy as one cannot pass on the entire increase in costs to consumers, given the poor demand situation in rural markets. We are witnessing an impact on our bottom line. The cost of raw materials has gone up 16 per cent in the last five-six quarters. We passed on additional cost through a 7 per cent price increase. The portfolio expansion has given us some respite for the first time in a while. Our avenues for growth were very limited earlier in the day due to a lack of a wider portfolio. What are the factors that have resulted in poor demand in the rural market, which was growing faster than the urban market before COVID?
JN: Lack of disposable income among consumers is a real issue. I have travelled extensively and found that consumers simply don't have enough money to spend, which is leading to poor demand scenario in rural markets. The impact is low in relatively affluent stales like Maharashtra and South. The markets in North and East India are badly hit.
How do you hedge against rising costs?
JN: Leveraging the Almond Drops brands, we are expanding into both hair-care and skin care categories. In the next two to three quarters we will be launching new products to grow our portfolio from a single category to multi-category. We started focusing on the online channels with Natyv Soul last year. This is a premium brand with 10 -- 12 products, placed on e-commerce, modern trade and premium retail outlets. The other brand - Bajaj 100% is slowing picking up.
Has Bajaj Consumer Care been able to leverage the growing demand for e-commerce channels?
JN: The share of e-commerce in our sales has gone up to 5 per cent from 0.5 per cent a year ago. The COVID - induced behavioural changes among consumers helped as they preferred to buy online. We actively pushed to increase our share in online channels, even before COVID, while our competitors had a 3 -- 4 per cent revenue share from online ours was low. Others may have surged to 7 - 8 per cent, but now we are confident that we can catch up fast.
We would like to take that share of modern trade channel to 8 -- 9 per cent in the near future, because we've managed to grow the share of modern trade channel towards our sales to 6.5 per cent. Modern trade and e-commerce will contribute 17 -- 18 per cent in the coming years.