Parachute Coconut Oil: one product by which Indian fast-moving consumer goods brand is almost synonymous with.
So much that almost 70 per cent of Marico Bangladesh’s revenue came from this product alone, according to its latest annual report.
The problem with such heavy dependency on one product is that it leaves the company vulnerable to the vagaries of consumers. If one fine day they decide they had enough with the product, they will simply jump ship, leaving the company in a delicate situation.
Marico Bangladesh, perhaps, is sensing such a situation, which is why it shelled out Tk 30 crore to roll out a male grooming product line by the moniker of Studio X in order to diversify its product base.
The line, which was launched last week, currently consists of shampoo, face wash and hair gel, all made in Bangladesh.
Bangladesh’s male grooming market is now worth Tk 100 crore but it has the potential to grow further.
With a younger and more connected generation, today’s male consumer segment is more aware than ever of their appearance and have differentiated grooming needs, said Ashish Goupal, managing director of Marico Bangladesh.
“We introduced our international male grooming range in Bangladesh, to cater to today’s style-conscious men of Bangladesh,” he added.
Marico Bangladesh’s foray into the male grooming arena though excited the stock market: its share price advanced 2.51 per cent over the course of the week to close at Tk 1,713 yesterday.
FMCG industry insiders said male grooming is on the rise globally and the movement will catch on Bangladesh due to multiple factors: a growing economy, a young population, the desire to look their best and aspiration to latch on to global trends.
“It is a good sign to see when a company goes for product and turnover diversification,” said Mir Ariful Islam, research head of Prime Finance Asset Management Company.
This is good for the future of Marico Bangladesh because a single product-led company may face trouble any time.
“Already the company is bringing in many new brands and getting results too,” he added.
Today, Marico Bangladesh has a portfolio of 24 brands in the personal care and food categories.
The company’s flagship brand, Parachute, has maintained its leadership position and now holds the highest ever market share in the branded coconut oil category.
On the other hand, its value-added hair oil portfolio, consisting of Parachute Advansed and Nihar Naturals, has shown robust growth and now contributes 36 per cent to its business turnover.
The company’s revenue growth was 12.2 per cent and profit growth 23.2 per cent in its last financial year, which ended in March 2019. Marico Bangladesh provided 600 per cent cash dividend to shareholders.
Marico’s earnings per share was Tk 67.88 in the first three quarters of the current financial year, up from Tk 49.39 a year earlier. The company announced 300 per cent interim cash dividend too.