IGI Logo

We met Mr. Sudhir Sitapati, Managing Director and CEO of GCPL, for an update on the business and its strategy. Here are the key takeaways:

* Renewed focus on marketing to drive penetration: Creating relevance has been identified as the first step in deepening penetration in GCPL’s categories. GCPL’s marketing spends have historically been under-indexed v/s its peers, but recent quarters have seen an uptick in A&P spends. The goal is to continue investing in marketing, even at times of volatile input costs, with market development at the forefront.

* Selective and meaningful innovation: Innovation will now be a focused process, with fewer disruptive innovations in GCPL’s core categories. A recent example has been the launch of the Magic Body Wash that comes in a gel-to-liquid format and follows the successful launch of Magic Hand Wash.

* Simplifying the complex organizational structure: The new CEO views the complexity of operations and structure as cumbersome, and is working towards streamlining various business processes. To this extent, GCPL has created a global category management structure, within which HI, Hair Care, and Air Care will be centrally managed. Another step under this agenda has been globally centralizing the functions of Finance, HR, IT, and its global structure. Another key area identified by the management to simplify operations is the reduction in the number of SKUs as well as the introduction of digitally enabled simplification.

* Leveraging the distribution network in its Soaps portfolio: GCPL has a strong GTM network and reaches little over 6m outlets. Hair Color, HI, and Air Care, all of which do not have the same reach as Soaps, can steadily piggyback on the latter’s network as relevance and demand for these categories increases.

* Doubling down on GCPL’s HI play with Liquid Vaporizers (LV) and Aerosols: HI remains a significantly underpenetrated category in India (little over20% penetration in LVs and low single digit in Aerosols), presenting a large opportunity for GCPL – the market leader with ~50% market share. One of the main ways to boost penetration will be with increased A&P spends. Simultaneously, GCPL has changed the narrative in its advertisements for Good Knight – positioning it as a ‘protector’ rather than a ‘killer’. As part of its future plans, increasing penetration of Cockroach Repellents will also play a role.

* Turning around the GAUM business: GAUM head, Mr. Dharnesh Gordhon, has done a good job in increasing distribution and reach so far. He continues to build GCPL’s Africa distribution. Distribution expansion, category development, and simplification of the business are some of GCPL’s priority areas in the African market. The objective for GAUM is to focus on the FMCG portfolio and reduce the salience of its Fast Fashion Dry Hair portfolio. We recently attended an interaction with Mr. Gordhon, here are the key takeaways.

To Read Complete Report & Disclaimer Click Here

For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412

Above views are of the author and not of the website kindly read disclaimer