Business

Premium game: get skin in game

With plans to be present in 100 cities, Sebamed aims to be among India’s top 10 personal care brands in the next five years

German personal care group Sebamed made headlines early last year when it made a bold move to adopt Hindustan Unilever’s (HUL) legacy soap brands in its advertising campaign. Although the campaign was embroiled in a legal battle and sparked debate across the industry, Shashi Ranjan, Country Manager at Sebamed India, clarifies that the campaign was never intended to be spontaneous, but “in line with that of the company”. Purpose to help consumers make an informed choice.” Since then, Sebamed has launched a series of campaigns for its range of baby care, skin care and hair care products. Ranjan expects Sebamed, which operates in a premium space, to grow 10-fold over the next five years and secure a place in the top 10 in the industry.

Small steps

When it was launched in India in 2007, the brand was initially sold via the pharmacies and medical supply stores route. But things have evolved. “We started expanding our distribution into general commerce, modern commerce and e-commerce, and gradually expanded our footprint,” notes Ranjan. The brand is currently present in more than 60 cities and expects to reach 100 cities by the end of 2022. “We have a direct reach of 60,000 stores and plan to increase that number twice a year,” adds Ranjan. Pharmacies only account for around 20% of Sebamed’s business.

“Having our products endorsed by doctors and dermatologists has proven to be a good strategy and has helped the brand stand the test of time,” explains Ranjan. The second growth phase of the brand started three years ago. He adds: “In this phase, we mainly focus on three pillars – branding, distribution and people.”

In terms of brand building, Ranjan says that the brand has tripled its marketing budget in the last three years and its campaigns have met with a positive response from consumers. Sebamed’s annual turnover is 600 million euros. The company’s baby care portfolio has grown at double-digit rates, Ranjan said. The baby care segment (particularly toiletries such as soaps, wipes, lotions and diapers) is also growing exponentially, observes Sanjesh Thakur, partner at Deloitte India. “Assuming normal course over the next five years, this category, which currently stands at €14,000-15,000 million, should reach €25,000-26,000 million by 2027 and grow at a CAGR of 12-13%,” notes he.

The company did well to differentiate itself in a crowded segment with its chemist sales approach, says Harish Bijoor, founder of Harish Bijoor Consults. “Now that it’s joined the FMCG route to expand, it’s important to invest in the power of sell-in, with heavy investments in workforce building, sales force training and automated systems that sell on the front end,” he adds. That’s where Sebamed’s “third pillar” comes in, says Ranjan, as the brand aims to invest in the right people.

The cost factor

During the pandemic, consumers began to reconsider their beauty and personal care choices, paying more attention to ingredients and safety. This is where a brand like Sebamed could have scored with its “transparent communication strategy and 5.5 pH balance promise,” notes Ranjan.

Harsha Razdan, Partner and Head of Convenience Stores and E-Commerce at KPMG India, also notes that recent generational renewal among young consumers has been a key growth driver for the personal care segment. “Packaging innovation and safe, clean products with ethical ingredients and minimal use of chemicals are key drivers of purchasing decisions in this category,” he says.

Deloitte’s Thakur points out that while young consumers in India are keen to experiment with different brands, pricing strategy remains crucial, especially for brands operating in a premium space. “Why would a consumer spend more on a premium product when they’re perfectly satisfied with a quality purchase at a lower price?” he asks.

As a premium brand, pricing is perhaps one of Sebamed’s main barriers to increasing its market share. A Sebamed soap bar costs at least twice as much as several popular brands on the market. However, Ranjan claims that the brand is determined to do whatever it takes to pursue legal proceedings. It has therefore launched smaller variants such as 50ml lotion packs and 10-pack shampoo sachets to break the price barrier and expand its reach in smaller markets.

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https://www.financialexpress.com/brandwagon/premium-play-getting-skin-in-the-game/2473406/ Premium game: get skin in game

Chris Barrese

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