Dabur India Limited · NSE:DABUR
Dabur India — Motilal Oswal 14th Annual Global Investor Conference 2018
28 slides from Dabur India's conference presentation, August 2018
Slide 1: The Opportunity called 'Rural India'
The Opportunity called ‘Rural India’ By: Sunil Duggal CEO, Dabur India Limited
Slide 2: Agenda
Agenda Dabur and its rural connect 3 1 The Macro Picture 2 What is driving rural growth? 2
Slide 3: India is the fastest growing economy in the world
India is the fastest growing economy in the world The Big Macro Picture Consumption to surge ~2.5x by 2025 India’s GDP (US$ tn) Consumption in India (US$ tn) 5.0 CAGR : 10% CAGR : 11% 3.0 2.3 1.3 2017 2025 2017 2025 • Over the next 8 years, India’s GDP is expected to scale up to US$ 5 trillion • Spr
Slide 4: FMCG: Drivers of growth
FMCG : Drivers of growth The great demographic dividend GDP growing at a good clip India’s demographic mix % GDP Growth Rate 7.9% 7.7% 8% 9% 11% 7.2% 7.1% 7.2% >59 years 43% 44% 6.6% 46% 25-59 years <24 years 49% 47% 42% 2014 2015 2016 2017 2018E 2019E 2011 2016 2025 Rising Per Capita Incomes …will
Slide 5: Significant opportunity in Middle and Lower Income groups
Significant opportunity in Middle and Lower Income groups Households (mn) Income Expenditure Income Groups Total Total (%) Rural % Urban % Contribution Contribution Rich 4 1% 35% 65% 9% 3% Higher Middle Income 67 23% 46% 54% 46% 33% Total (High Income) 71 24% 46% 54% 55% 36% Middle Income 89 31% 62%
Slide 6: Rural FMCG Market
Rural FMCG Market Rural FMCG Market* (US$ bn) 100.0 Rural 35% Urban 65% 29.4 2016 2025 Rural FMCG Sector ~US$30 bn Expected to grow at a CAGR of 15% and touch US$ 100 bn by 2025 * Source : IBEF Study 6
Slide 7: Agenda
Agenda Dabur and its rural connect 3 1 The Macro Picture 2 What is driving rural growth? 7
Slide 8: Rural India – Few Facts
Rural India – Few Facts Rural Contribution to Sectors 66% Population Contribution 30% 6 lacs Villages 36% 17 cr Households 45% 67.8% Literacy Rate 50% 50% GDP Contribution Source: Govt. of India Census 2011, IBEF, News articles 8
Slide 9: 66% of Indian population still resides in Rural
66% of Indian population still resides in Rural Rural Population as % of Total Population 70.5% 70.1% 69.5% 69.1% 68.7% 68.5% 68.3% 68.0% 67.5% 67.2% 66.8% 66.4% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 However, there is a steady decline due to urbanisation Source: World Bank Data
Slide 10: Agriculture dependency is going down
Agriculture dependency is going down Share of Rural Net Domestic Product 17.1% 3.5% 27.0% 5.9% 10.5% 18.4% 72.4% 39.2% 1970-71 2011-12 Agriculture Manufacturing Construction Services Contribution of Agriculture has gone down from 72.4% to 39.2% 10
Slide 11: Rural vs urban income levels
Rural vs urban income levels Average monthly household income (USD per month) 424 333 285 282 283 221 164 Metro Boom Town Niche cities Rest of urban Developed rural Emerging rural Underdeveloped rural Rural incomes are almost half of Metros/ Big towns Source: Household Survey on India’s Citizen Envi
Slide 12: Low penetration levels provide headroom for growth
Low penetration levels provide headroom for growth Penetration levels in rural and urban India Utensil Cleaners 43.2% 70.4% Toilet Cleaners 21.2% 52.0% Shampoos 58.5% 68.6% Honey 3.7% 11.9% Fruit Juices 6.5% 17.1% Chyawanprash 2.4% 4.6% Hair Oils 92.0% 91.7% Toothpaste 95.5% 99.5% 0.0% 50.0% 100.0%
Slide 13: Rural consumer is evolving – Becoming more aspirational
Rural consumer is evolving – Becoming more aspirational Aspirational “I want my family to lead a more “I want to enjoy my life” “I want to live an urban lifestyle comfortable life” and enhance my self-image” - Rural Consumer A -Rural Consumer B -Rural Consumer C 1 Brand Savvy 2 Trading Up 3 Explorin
Slide 14: Rural consumer is evolving – Becoming more networked
Rural consumer is evolving – Becoming more networked Networked TRAI data suggests that in the past four years alone, the subscriber base has More expanded seven times in the 1 Connected villages, outstripping the three-fold growth in urban areas Earlier Setup Current Setup Consumer Consumer More 2 P
Slide 15: Rural consumer is evolving – Becoming more discerning
Rural consumer is evolving – Becoming more discerning Discerning 1 Street-smart 2 Value seeking 3 Social Impact of ads and celebrity Weightage attributed to endorsements on purchase various considerations Reaction to bad experience decisions while shopping with an organization's marketing/ sales pra
Slide 16: Rural consumer is evolving – Women are becoming more empowered
Rural consumer is evolving – Women are becoming more empowered Empowered 35.0% 35.0% 22.0% 21.0% Rural Urban Double Income Families Share of Working Women Social and governmental Fostered female initiatives, microfinance entrepreneurship and increase models and women’s self-help in working women in
Slide 17: Govt. support to rural
Govt. support to rural Increased Continuity of Agriculture Support Awareness and Better Accessibility Financial Stability Income Behavioral Change Pradhan Mantri Direct Benefits MGNREGA Pradhan Mantri Gram Sadak Yojana Transfer In 2016-17, increased Krishi Sinchai Digital India Road construction (th
Slide 18: Agenda
Agenda Dabur and its rural connect 3 1 The Macro Picture 2 What is driving rural growth? 18
Slide 19: Dabur and its rural connect
Dabur and its rural connect Rural contributes ~46% of Categories which are big in Brands which are big in sales of Dabur Rural Rural Hair Oils Contribution to Sales Oral Care Rural 46% Urban Shampoos 54% Digestives Health Supplements Baby Massage Oils 19
Slide 20: Dabur's distribution is a key advantage in rural
Dabur’s distribution is a key advantage in rural Distribution Network One of the largest distribution 1 networks in India with total Factory reach of ~6.4 mn outlets Reaching directly 1mn+ C&F 2 outlets - ~4.5 lakh outlets in rural Super Stockist Super-stockists – 366 3 Stockists – 3,361 Sub-stockis
Slide 21: Project Double helped expand direct village coverage
Project Double helped expand direct village coverage… Dabur - Direct Village Coverage Rolled out during 2011-12 to expand direct distribution Mar'11 14,865 reach in rural markets Mar'12 17,882 Focus on improving reach, Project range and availability of Double products in rural areas Mar'13 30,091 Le
Slide 22: Project Buniyaad has been a key driver of growth
…and Project Buniyaad has been a key driver of growth Enabling Technology Urban Strategy Using technology to track and improve performance Leveraging potential through Channel based approach and automate processes Rural Strategy New Avenues of Growth Split the front line teams into two to increase r
Slide 23: Key Changes for Rural under Project Buniyaad
Key Changes for Rural under Project Buniyaad Rural Sales force of 1,400 50% RSPs servicing HPC Range 50% RSPs servicing HC Range 1 Increased Rural Servicing Efficiency & Frequency 2 Focus On Wider Range vs. only high Throughput Brands Previously 3 Small Sub Stockists now Covered Directly By Super St
Slide 24: Project Buniyaad has led to larger distribution, higher efficiencies and improved hygiene
Project Buniyaad has led to larger distribution, higher efficiencies and improved hygiene Increase in Lines Sold in Rural Increase in Average Brand Sold (ABS) in Rural 8.30 20.0 19.3 8.00 7.90 18.6 17.9 7.60 17.3 7.30 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Re
Slide 25: LUPs are a significant driver of growth and penetration
LUPs are a significant driver of growth and penetration Seeding Distribution Visibility Vans for seeding Increase Rural footprint Point of Sales Bannering operation - Increase Outlets and visibility Trade Lubrication Print Front line Engagement Lucrative trade packs Support thru Print and Incentiviz
Slide 26: Engaging with rural consumer at Haats and Melas
Engaging with rural consumer at Haats and Melas Direct engagement through Haats & Fairs like Kumbh Mela, Nauchandi Mela, etc to provide rural consumers an opportunity to experience Dabur products Stalls set up to engage with consumers by offering them hair oil massage and shampoo Puppet shows organi
Slide 27: Rural remains key focus area for Dabur
Rural remains key focus area for Dabur Potential Areas of Growth Home Care Skin Care Juices Prioritizing High Potential Rural Markets Range Expansion and Drive Sell Out Leveraging Split Teams for focused Portfolio Building Using Technology to sharpen field execution Adding to the Rural Infrastructur
Slide 28: Thank You!
aties NDNA 6. Thank You! 230ml Stee silat ‘Paiia sat staan Ga eT & Sas att at Sart Sa A Sep aw Beat SA A aa ect & (Prere salle, offen Ae 3 ene). cada Get ster 4 ore! ‘Hair swatches ‘with Dabur Amla showed up to 2x impr in tensile strength measurement when compared with Nihar Shanti Amla. Basis study
Dabur India — Motilal Oswal 14th Annual Global Investor Conference 2018 on 6ix