Wipro’s other billion-dollar business stakes

Names like Gervenne, Romano, Vigor, Enchanteur, Vitalis, Enear, Zici, Pahnli, Aiken will probably leave most of you stunned. Well, they are the brand names of a shower cream, a catch-all mens grooming brand, a detergent, womens personal care brand, womens deodorant, bodycare products, homecare and a hygiene brand. These are popular brands owned by an Indian conglomerate.

Meet Wipro Consumer Care & Lighting (WCCL), one of the fastest growing FMCG companies not only in India but across Southeast Asia, Middle East and China. While Wipro today, is associated with being an IT giant for most of the people, the consumer care business under WCCL is hidden from clear sight. It was spun off from the parent company, and transformed into an independent entity in 2014. It is now part of Wipro Enterprises, which has several non-IT businesses apart from WCCL.

However, WCCL in a way represents the true legacy of the group as Wipro started as Western India Palm Refined Oils (WIPRO) in 1945 and was a pioneer in the consumer care segment. With a sharp mandate, ousted from the technology services company and more focus, Vineet Agarwal, CEO of WCCL and long-time stalwart of Wipro’s founding chairman Azim H Premji, has quietly built a consumer care giant.

Today WCCL is one of the top players in personal care in markets like Malaysia, Vietnam, Singapore, Middle East, leading player in women’s fragrances in Indonesia, body lotions and hair styling or detergents in Philippines and top three players in male grooming is one of. Apart from its obvious base in India, the product in southern China. It has entered the African markets temporarily. WCCL’s international moves have come through careful strategic acquisitions.

growth through acquisitions

WCCL has made over a dozen acquisitions over the past 15 years, notably Malaysia-based Unza Holdings in early 2007, Yardley UK and Singapore-based LD Waxsons in 2012, China-based-Zhonghshan Ma Er in 2016, South 2019 in the African Canaway Corporation and the Filipino company Splash Corporation.

Overall, the consumer care business has spent a little over a billion dollars so far — to build a strong portfolio of brands, says Agarwal. This has also helped the company to derive most of its revenue from the international markets. For the year ended March 31, 2022, WCCL generated revenue of approximately ₹8,600 crore, of which 52 per cent came from outside India with low double-digit EBITDA margins. “Of course, due to the pandemic like everyone else, we were also affected, otherwise both growth and margins would have been even better,” said Agarwal.

While the growth has come from acquisitions, VP Marketing, an MNC competitor says, “WCCL is essentially a value buyer who waits for an opportune moment and picks strong brands that have latent potential and cachet but or So are constrained by scale, lack of funding or attention from owners who may be looking to exit for whatever reason. How well integrated?

Agarwal says that even after the acquisition, it is the local teams in those markets that drive the operations, but usually WCCL brings its best practices and learnings to bear on manufacturing, operations and finance. Plus, it carefully picks and chooses its battles. That is why in a huge market like China – which has actually rolled out into several markets like India, each with its own distinctive features – WCCL is mostly due to logistics reasons and its established footprint of Zhongshan Ma er reaching the South China market. is only limited. “China has many strong local brands and for example, our liquid detergent care brand ranks third in southern China. Also, we do not play the price game but focus on providing value,” says Agarwal.

Today, China contributes around $110 million, just behind Malaysia, which is about $150 million, while Vietnam is not far behind at $90 million. Asked if some of its international brand portfolio would be launched in the domestic market, Agarwal said. “Brands need local resonance and recognition. However, we can bring in those formulations and suitably package it based on the needs of each market. Although we have some brands like Hygienix, which we introduced in the domestic market from the international portfolio during the pandemic, but we are very selective,” he adds.

new scenes

Just before the pandemic, it entered the African continent by buying Durban-based Canway Corporation, which has a number of locally renowned brands in body sprays, bath and shower products and children’s personal hygiene products. WCCL is believed to be looking for opportunities at scale in Africa and has a small business in Nigeria, apart from South Africa.

“But it is very small. Geographically Africa is still a white place. Also, the experience of many companies (in Africa) has not been good. So one has to be careful. Now that we have a foothold. The situation is, we’ll figure out how to expand. Part of the reason is that we’re like a touch and feel company. We like to physically go places and meet people before we make a decision. We last two Haven’t been able to do so over the years because of travel restrictions, which have been eased recently,” says Agarwal

Branding and Marketing Maven Harish Bijoor, commenting on WCCL’s international expansion strategy through the acquisition, considers it a good move. “WCCL knows that it is difficult to establish a brand with a label outside India. Hence, it is a good business strategy to choose marquee brands from different markets at the right price and manage and grow them under your own team. “Growing inorganically is faster as the acquired brands have equity in the local markets. In fact, they should continue this strategy.”

domestic market

One of the biggest success stories in the domestic market has been the brand Santoor, which has emerged as its flagship brand. Santoor alone is today a Rs 2,300 crore brand across various categories of soap, shampoo, handwash and many other product extensions. In some markets like Andhra Pradesh, it is the number one brand outselling even established competitors from HUL and Godrej. In the domestic market too, WCCL has carefully acquired brands like Glucovita and Chandrika, which helped it expand into different categories. From household names like Santoor, Chandrika, Yardley, Enchanteur, Safewash, MaxClean, Giphy, SoftTouch, today there is a portfolio of products ranging from personal hygiene, liquid detergent, dish wash liquid, floor cleaner, surface sanitizer to energy drink.

WCCL promotes the development of domestic brands

WCCL promotes the development of domestic brands

Earlier, it acquired Northwest Switchgear and today, under the name Wipro Garnet, has a range of lighting products primarily in the LED segment. It has also recently announced foray into packaged foods. This includes snacks, condiments and ready-to-eat categories. When asked whether the company would look at inorganic opportunities in the domestic market as well, Agarwal says, “We are always on the lookout for the right acquisition opportunities if we find a good fit.”

WCCL has taken minority equity stake in seven start-ups in the country. The company says its stake is between 15-25 per cent and the maximum investment in a single company is Rs 25 crore. They will be run independently,” explains Agarwal.

Similarly, WCCL’s venture funding arm, Wipro Consumer Care Ventures, has invested in DSG Consumer Partners IV, a Singapore-based fund that will invest in start-ups in the wider Southeast Asian region. With e-commerce becoming more important day by day, WCCL is seen as holding onto that space as compared to some of its bigger competitors.

Marketing guru Bijoor warns that venturing into too many segments will result in a loss of focus. “This is their weakness; Maintaining a narrow bandwidth is of the utmost importance – the Wipro brand should not become a supermarket brand. Instead, it should become the home of brands. When a supermarket becomes a brand, the focus is lost, and it is not a constructive move to diversify the portfolio like this.”

For now, however, WCCL is on the winning wicket with a decent bounce as the FMCG sector recovers from the impact of the pandemic. Aggarwal is reasonably paying – for now at least – massively about WCCL’s prospects and its multi-billion dollar bets.

Published on

31 July 2022

See also  Agreement: Recent LI real estate deals