Demonetization to help modern trade channels strengthen their base: Godrej

FMCG major Godrej Consumer Products Ltd (GCPL) expects established brands to gain in the aftermath of demonetisation and GST as the markets currently served by several regional players may see some changes.
According to a PTI report: The company also sees an opportunity in segments such as hair colour and soap, where the regional players still have a fair amount of market share, GCPL Business Head – India & SAARC Countries Sunil Kataria said in an analyst conference call.
Asked about the impact of demonetization and GST, Kataria was quoted by PTI as saying, “What we see as an opportunity is that there are many regional players in India across categories who tend to be located in a couple of districts or a couple of states and their entire distribution is primarily 80 to 90 per cent through wholesale channel, so that is something that will get disturbed.”
“In this situation, all the big brand players and especially in many categories that we operate in where we have a strength of direct distribution, we are likely to gain,” he was quoted by PTI as saying.
Moreover, demonetization would help modern trade channels strengthen their base.
“I think that modern trade will strengthen; there could be a salience change permanently in India. What modern trade could not do to itself, demonetization will do it for them,” he was quoted by PTI as saying.
The company would leverage its brand strength along with its strong distribution network to gain market share.
“So, our brand strength is there and our distribution is strong, we are going to leverage a lot of execution and distribution strength to really try to gain shares, it is not about increasing price intensity or promotion intensity at all,” he said, as per the transcript of the conference call uploaded on BSE website.
Asked whether GCPL is facing any pressure from Baba Ramdev-led Patanjali Ayurved, which has ventured into soaps category as well, Kataria was quoted by PTI as saying: “We do not see a threat from Patanjali.”
He told PTI, Patanjali, except for certain pockets in some northern states, “is not becoming a very major challenge or threat for us as of now.”
“They have their own regional pockets like some parts of Rajasthan etc, which is not a very strong market for us traditionally as well. They have had some traction but there is no significant direct impact to us,” he revealed to PTI.
According to Kataria, the company would gain market share through its ‘Expert Creme’ brand by replacing many regional players in the hair colour segment.