NEW DELHI — It isn’t often that homegrown brands outdo global competition in the personal care space in India. Vini cosmetics has proven the exception as its deodorant brand Fogg beat Hindustan Unilever (a subsidiary of Unilever) to become the country’s bestseller in 2014. And it has kept its lead.
Vini’s strength has attracted global attention as well — in a recent funding round the company received one of the largest private equity investment in India’s personal care space from Westbridge Capital and Sequoia, which injected 11 billion rupees, or $165 million, into the firm.
India’s deodorant category grew at a 22.7 percent compound annual growth rate from 2011 to 2016, according to market analysis company Euromonitor, during which time the category grew by an overall 177.6 percent. Deodorants accounted for sales of 31.3 billion rupees out of the 811 billion rupee, or $12.55 billion, beauty and personal care market in India.
Vini’s owner Darshan Patel has repeatedly proven his business acumen. In 2010 he sold Paras Pharma, which had a strong personal care component, to Reckitt Benckiser for $726 million.
You May Also Like
But even as Vini attracts greater attention and funding, Patel isn’t fussed about any of it. Keeping his practical, self-effacing humor, he spoke to WWD about the challenges of differentiation in a fast-moving market, and the changing Indian consumer.
WWD: This investment by Westbridge and Sequoia is one of the biggest in the personal care segment in India. Will this spotlight not hamper the independence and speed with which you have grown?
Darshan Patel: It is around 11 billion rupees, led by Westbridge and participation by Sequoia, which is a second-round investment also in the second round. No, those who have invested in me know very well that I see a market differently, and they would like me to run this whole show. But I am also very open to any advice that can help grow my company, and always welcome their experiences and knowledge and keep on learning.
WWD: You overtook Axe deodorant in 2014, and that was really a shock for the industry that an Indian company could outdo a global company like Unilever.
D.P.: If you see my history, I have always worked in categories which have multinational [competition]. It is nothing new to me, but I put a little logic before entering the category to see whether there is a place for me or not. If there is a place, I enter, then I see how to grow myself. I always look for ways to become one of the top three. I may be late in entering the category, or it may take five to seven years to be among the top three players, but I don’t mind investing my time and my money to make it happen.
WWD: So the target is very clear?
D.P.: Very, very, very clear, 100 percent!
WWD: Isn’t it true though that Indian customers have always believed that “foreign” is better?
D.P.: I don’t think that’s true. In my 30 years in the industry I have been very close to the Indian consumer and found that although there may be some perception that imported products are good, it does not mean that “made in India” is bad. I took a decision to become a multinational, and take my brand outside India. That’s why we are in more than 50 countries today. I believe it is about the quality of the product you give to the consumer. The only criteria is whether you are able to satisfy what they want.
Fogg has worked across the socio-economic sectors in India and beyond because there are efficacy seekers who discover it and like it — that’s what works.
WWD: One key thing that has worked for you has been offering more volume in the same pack.
D.P.: There is no denying that. Even in the U.S., people look for a $1 product or a $5 product that gives you value for money. If you are thinking about mass, you have to think very differently. It is about planning the architecture of the brand.
WWD: Are you going to be looking at diversification with this investment?
D.P.: There is no diversification. I’m not a great believer in extending a brand. Fogg is growing 15 to 20 percent every year; I will continue to grow it and I don’t want to deviate from whatever Fogg is supposed to do, at least for the next two years. We do have a few more products under personal care, which include a body mist for women, a foundation cream and a face powder.
I have also identified another category that falls under personal hygiene, which is sanitary napkins and diapers, which will continue to grow for the next 20 years. While the deodorant space is about smelling good, feeling good, looking good, hygiene is mostly about caring and enhancement.
WWD: Has the deodorant category peaked now? What about your company?
D.P.: I think I’m in the middle of the growth. Fogg is growing, Vini is going. I still see a huge potential as far as India is concerned.
The deodorant category is still growing at 15 to 17 percent and will keep growing at a minimum of 15 percent for the coming five to seven years. You see a $3 product for personal-care entry point is a good starting point, and it weaves a fragrance story into the life. Everyone knows that India is a growing economy, and once the per capita spend keeps growing this is one category that people will come to first.
WWD: Is the new consumer still with you? Are they changing?
D.P.: The New-Age consumer has shown that you have to be very careful about what you are offering them. Earlier you could offer anything and it would be acceptable. Now consumers are becoming more brand-conscious; they are becoming more quality-conscious and looking for products that are more efficacious in nature that give you good value for money. I would say India’s middle class is also moving toward premium-ization.
WWD: Is it really the under-25 population that is making these changes?
D.P.: No, it is from 18-plus to 45. In India, 45 is still young, it is the age where you cannot say the journey is over, they feel they have a lot of juice in them and are sitting with a lot of money looking for ways to spend it. Fogg is across the categories, but the majority is young, from 20 to 30, which is our core group.
WWD: You’ve had considerable experience in this investment space, with Paras, selling a company, making a new one. Does it get easier with time?
D.P.: I’m a born entrepreneur, and I like to work. I have been working 18 hours a day for the last 30 years, thinking about creating new things. And would like to work till the last year of my life. My mind doesn’t stop.
I came out of Paras, I had money, and had the option of not doing anything, but I never held back myself. I don’t think I would be able to stop creating new ideas, new products, thinking about new ways of bringing products for the Indian consumer as well as for the world consumer. If I don’t do something it means I am doing a crime. I don’t want to play golf!