Banking on a good monsoon for a better second half in smaller cities: Wipro

The outlook for consumer product demand in the market has improved somewhat, but challenges still remain and a good monsoon can help see a better second half of the year in smaller cities and rural areas, said Vineet Agrawal, CEO of Wipro Consumer Care and Lighting.

The company is also not unduly perturbed by Reliance’s entry into the FMCG segment, as consumer preferences are very strong in the segment with very strong brand loyalty, said Agrawal, who is also CEO of Wipro Enterprises.

The growth of smaller cities and rural areas remains a challenge for FMCG players, although the situation is improving, he said.

From a demand perspective, the market has improved “a bit, but it’s still challenging,” Agrawal told PTI.

“It’s not like the good pre-covid era and I think smaller cities and rural areas are still a challenge but things are looking up. Hopefully if the monsoon is good we’ll see a better second half. Hopefully the cost prices have come down, initially, they went up last year because of the Ukraine war. We are seeing positive things as far as the market is concerned,” he said.

Wipro Consumer Care and Lighting, which owns brands such as sandalwood soap brand Santoor and women’s toiletries brand Enchanteur, has already extended benefits to customers in some segments.

“We already lowered the prices of soap, for example, we were selling at (Rs) 38 per 100g, reduced to (Rs) 36. We have made price corrections,” he said.

When asked about the entry of Reliance, led by billionaire Mukesh Ambani, into the aggressively priced FMCG segment, Agrawal said price isn’t just the only weapon.

However, he also added: “Reliance is a tough competitor in whatever category they find themselves in. They’re not just tough but relentless. They think big, think disruptively.”

Agrawal also added: “We have yet to see them in personal care products because in the segment consumer preferences are very strong. People don’t switch from one product to another easily. If a consumer uses a brand, they don’t switch.” easily. Similarly, in food, it doesn’t change easily.”

RIL, through its reduction unit Reliance Retail, has entered the FMCG segment. It articulates the ambition to be a relevant player in the USD 110 billion FMCG (Fast Moving Consumer Goods) segment.

Although the products of RCPL, the FMCG arm and wholly owned subsidiary of Reliance Retail Ventures Limited (RRVL), are available only in selected markets. He has priced them 30 to 35 percent cheaper.

However, Agarwal said that in consumer goods, price is not just the only weapon, there are other elements that consumers look at.

“But yes, we are aware of the fact that Reliance is a strong competitor, a disruptor and it’s relentless. You have to be aware of that fact and give value to the consumer,” he said.

Wipro Consumer Care and Lighting, which is part of Wipro Enterprises, led by Azim Premji, passed the milestone of Rs 10,000 crore in total sales in FY23, helped by significant growth across its geographies, brands and categories.

Its domestic FMCG business grew 17 percent in FY23. Wipro’s sandalwood soap brand Santoor has now become the second-biggest player in the segment in India with sales of more than 2.65 billion rupees. While Wipro Consumer Care and Lighting’s Enchanteur women’s toiletries brand has also surpassed Rs 1,000 crore.

Asked about the outlook, Agrawal said: “Last year was exceptionally good for us. It would be hard to answer whether this will be as good as we are at the start of the new (financial) year.”

Wipro Consumer Care and Lighting, which started in 1945 as a vanaspati brand, with its factory in Amalner, Maharashtra, now has a presence in 60 countries.

It operates 18 factories with more than 10,000 employees and 51 percent of its revenue comes from international business. The company has focused on developing markets, primarily in Southeast Asia.