RETAIL PEOPLE 2021-09-03

RSH Global Bets Big on Online to Match The Fast-Changing Consumer Expectations

In the next 2 years, the company is eyeing Rs 100 crore GMV from online business.

By Content Writer
RSH Global Bets Big on Online to Match The Fast-Changing Consumer Expectations

The company has pinned up high hopes on the uptick in consumption and ramping up its distribution, sales, and marketing strategy.

“We are trying to load up our trade partners much earlier than we usually do. Usually, we do it from mid-September onwards, however, we have started doing this by end of August. We want to ensure that stocks are readily available in all the markets we operate,” says Sunil Agarwal, Chairman, RSH Global. 

“From a marketing point of view, we are designing a new campaign for the upcoming winter season which we'll roll out much before we usually do. Usually, we roll it out post-Diwali, but this year we are thinking of doing it around Dussehra, maybe. So we are trying to prepone that as well. Everything is getting planned 3-4 weeks earlier than what we used to do. We just want to ensure that we don't get caught up in the third wave if it comes at all,” he adds.

Two years back, digital was not even 1 percent of RSH Global’s overall spending. Now, almost 20 percent of its spending is towards digital. 

Distribution Strategy

The products of the company are available across 7.5 lakh outlets in modern and general trade. Out of this, it is directly catering to 2 lakh outlets, and the rest of 5.5 lakh are through wholesalers.

“Delhi, Rajasthan, U.P., and M.P. have been a historically good market for us. We have identified Maharashtra and Bengal as our key markets to take things to the next level, and we are continuously striving to grow our distribution in Maharashtra and Bengal. We have added 80 distributors in these two states in the last one-and-half years, and we have already added around 15,000-20,000 outlets despite the pandemic. Going ahead, we want to speed up and add another 40,000-50,000 outlets in these two states,” he asserts.

“From these two states, we have identified to have Rs 300 crore GMV in the next two years. We are going to spend around Rs 100 crore on advertising and promotions,” he further adds.

Manufacturing Plans

At present, the company has two manufacturing plants in Baddi, Himachal Pradesh, and a small facility in Kolkata. In the next two years, the company is planning to expand its manufacturing capacity and open one more manufacturing plant in Baddi.

“The new manufacturing plant will be 4 times the size of both the plants together. Currently, we have the capacity of producing 25,000 tonnes of our produce. So, that plant will produce around 40,000-50,000 tonnes of produce. We are trying to build a facility that will be sustainable for an organization for the next 10 years. We are making ourselves future-ready by ticking all the boxes that are required to keep our organization going,” he states.

Betting Big on Online

RSH Global started exploring the online medium after Covid hit us last year. The company moved towards more masstige products. Since December last year, the company has launched 25 new products.

“Again next year, we are coming up with a few launches like sunscreens, face creams, face gels, and shower gels. Now, we are looking at online business as one of our verticals. This pandemic made us think of online as well from a different perspective,” he asserts.

“Currently, online contributes 4-5 percent of our overall revenue and we think that in the next 1-2 years, it will be around 10 percent,” he further adds.

Moisturizers, body lotions, and face washes are the three categories that are performing well online for the company. 

“When we ventured online, we thought of exploring other categories as well, which we haven't explored earlier. Prior to this, we were launching products in our key strength areas only, but online allowed us to venture into body oils, body gels, face toners, etc. It is working well for us, which we never expected. We did varieties of face packs like charcoal, fruit-based,  glycolic, and green clay to name a few and they are doing fantastic in the market,” he explains.

“Of my entire online business, these new products contribute 30 percent, and 70 percent is still coming from my hero products for general trade and modern trades. At least we are gaining 30 percent, new consumers, for the new portfolio,” he adds.

Future Plans

In the next 2 years, the company is eyeing Rs 100 crore GMV from online business. During the next year, it plans to achieve Rs 55 crore and plans to double it the next year. 

“We closed this March clocking around Rs 540 GMV, and we plan to close the current year around Rs 700-750 GMV. Two years from now, we will be around Rs 1,000 crore,” he concludes.

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