Over the past few years, the Piramal Group has shifted its focus on building a consumer pull for its brands and aims to generate a turnover Rs 1,000 crore in three years from its consumer products division. In an exclusive conversation with Storyboard18, Nandini Piramal, executive director of Piramal Enterprises Ltd, shares the company’s plans and ambitions for the CPD (consumer products division) business as it invests in marketing and onboards a host of celebrity brand endorsers.We dive into Piramal’s playbook— growth strategy, global positioning of the pharma company brand and future plans.
You set a target of Rs 1.000 crore turnover from the CPD business in the next three years. What are the key points in the plan to get there and what are the challenges that you foresee?
When we started this business, and we separated it from the broader pharma business, it was only Rs 65 crore, so it's tiny. Over the last 10 years, we've actually grown it, we've invested in new brands. Our baby brand, Little’s, crossed Rs 100 crore in sales. We've now invested in categories which are bigger. The baby business alone, in India, is more than Rs 25,000 crore. And we’re a young and growing country. Our birth rate is at about 2 percent, so we’ve got new consumers of our diapers and wipes coming in every day or every minute. We're also excited about Lacto Calamine. It used to be just a lotion, we launched the sunscreen, an aloevera gel, face wash and cleansing wipes and expanded the portfolio.
So that's part of how we're thinking about it. We've also invested in ecommerce in the last two years. Ecommerce has exploded in the country and that'll still be a continuous source of growth for everybody.
What are the key consumer and market insights that are informing your strategies in retail, your portfolio, the products and categories that you're getting into and broadening?
More than two years ago, pre-Covid-19, ecommerce was only maybe five percent of retail sales overall. We saw that it would be a source of growth and we set up the infrastructure for it. But in two years of the pandemic, ecommerce exploded as people weren't going out, they were looking to understand new products and brands.
So what we did is use that ecommerce infrastructure to invest in baby and beauty because those are the categories that always work well. We launched a lot of new products as a way to experiment and try and see what works. So since then, in baby for instance, we've launched about 30 or 40 extensions and SKUs and maybe a slightly smaller number in beauty.
But the idea is that we experiment, try new products, see what works, see when you can get to scale. And then you actually take it to offline retail and get even more scale that way. Because the hard part is getting that first 100 crore of sales and then once you have people that know your brand, know what it's like, it makes moving online faster possible.
That's how we changed our strategy. It used to be that you'd launch it in a city or town, take it to four zones in the country, then you would go nationwide. This way, you can actually do an ecommerce launch first and get enough scale. And if you fail, that's great because then you’d have failed faster. And if you succeed, then I think you have that scale to go even higher.
What's coming up in terms of new products and in your innovation pipeline?
We're going to continue to broaden the range in the baby segment. We’ll expand the care and feeding range as well as personal care for babies. We'll continue to offer a holistic solution for them with new toys and more. In beauty, we've got a plan in place to experiment and try. For instance, we just launched our aloevera gel, we're also going to launch various face masks and creams that appeal to the idea of beauty today and what people want.
Beauty is an awfully crowded space right now with the emergence of many D2C brands. Is the company a little late to that party?
Lacto Calamine is a heritage brand. It is popular among consumers and is used as a way of oil control. And by keeping that promise, we're actually looking at how to contemporise and modernise the brand so that it makes it more exciting for people and more relevant to the consumer today. I think Indians are still expanding their understanding of beauty, what they need and how it's relevant to them. So I think there’s still room to grow.
Tell us more about your organic versus inorganic growth as a strategy?
Overall, we've been an an acquisitive company. We've been acquiring brands and acquiring capabilities in this context. In the last two years, we did one where we bought an equity stake in a biologics development capability, because we believe biologics is the next frontier. Not everything will be a biologic, small molecule or the traditional will still continue, but biologics is a new way. So, we wanted to understand and partner with people who really know biologics so we can learn more about it.
We have also acquired Hemmo, a company manufacturing peptides, a type of molecule.
Again, these are capabilities that not everyone has, and there are not many peptides development companies in the world. For us, that was a great way of adding capabilities.
As a company, we could look at capabilities that we don't have and complement us. By integrating them into Piramal, we can offer better solutions to our consumers.
We like buying brands, especially in the OTC space, because it's a good way for us to take a brand, understand the consumer, put money and investment behind it to actually grow it and to scale it.
After the demerger of the pharma and financial business, how are you positioning the global pharma business and shaping its brand identity?
As Piramal Pharma we’re still part of the Piramal Group. Our purpose—‘doing well and doing good’—will continue. Our values—knowledge, action, care, and impact—are incredibly important to us. They're also going to continue to percolate through everything. We're believers in the values and I think that they actually form a huge part of our culture.
The way we look at it is saying how can we have behaviours that actually reflect the values?
And how do we actually assess and measure people by those behaviours as well? As we articulate that, our culture is going to be informed by the values and be very closely connected. We are a global company and we are going to be India-headquartered. But we have a lot of global accounts and people and we have to connect and integrate that.
What are some of the sort of pandemic-born insights that have shaped your approach to building brands and growing the company and the business?
Ecommerce has completely changed how we launch brands. We used to launch about four SKUs a year and would know about how successful it is perhaps two years down the line. With ecommerce you learn very quickly if your products have succeeded or failed. The aim has always been to be on the first search page and be available to people from all cities.
We had to learn different skills—from analytics to how to partner with ecommerce portals, advertising, digital advertising or the distribution focus. So we've all had to learn different skills.
Can you tell us more about your advertising and media strategy and roping in a host of celebrities as brand endorsers?
It helps cut through the clutter. If you can find the right product and the right celebrity, it really makes a difference in the right market. So we invested with Kareena Kapoor Khan and Saif Ali Khan for our Little’s brand and it turned out to be great. We've seen that both in ecommerce and in traditional trade, we've seen a very good response to our products. And we think that is making a difference.
As we look at our power brands, we'll keep looking and seeing whether this makes sense and whether we want to invest in the kind of characters and people that make sense for us. At the right time, I think there will be more celebrity endorsements.
Digital ad spends have increased but we're still doing a lot of TV mass campaigns because a lot of our products are appealing to a fairly wide range of Indians and we continue that. TV, for those, is still the best way. For a certain urban section, you do need to do digital, but also search-based advertising has become much bigger, and that's going to continue to be part of it. Because when it is search-based, people are intentional about looking for something and that is a good indicator of consumption or buying patterns.
This interview first aired on Storyboard18 on CNBC-TV18. Read the full interview on Forbes India and Moneycontrol.