Bajaj Consumer Care Limited 18th Annual Report 2023-24

Statutory Reports

Management Discussion and Analysis

Global economic overview1 Outlook The Monetary Policy Committee emphasizes a gradual withdrawal of accommodation to align inflation with the target while
supporting economic growth, aiming to strike a balance between controlling inflationary pressures and fostering robust expansion.
The global economic recovery remains steady, with the world Global growth is forecasted to remain steady at 3.1% for CY
economy projected to grow at a rate of 3.2% over the next two 2024. This will be followed by a modest increase to 3.2% in Urban and rural segment-wise CPI performance4
years. The growth rate aligns with the pace observed in 2023, CY 2025. Despite a consistent growth rate, the historical
thus indicating a continuation of the positive momentum. average of 3.8% (2000-19) has yet to be reached following the All India year-on-year inflation rates (%) based on CPI (General) and CFPI: March 2024 over March 2023
Advanced Economies (AEs) are expected to experience a global pandemic.
March 2024 March 2023
slight acceleration in growth, with rates increasing from 1.6%
Rising trade distortions and geoeconomic fragmentation are Rural Urban Combined Rural Urban Combined
in 2023 to 1.7% in 2024 and 1.8% in 2025. On the other hand,
expected to persist, adding pressure on global trade levels. CPI (General) 5.51 4.14 4.85 5.51 5.89 5.66
emerging markets and developing economies are projected Inflation
Inflation on the other hand continues to fall. CFPI 8.55 8.41 8.52 4.72 4.82 4.79
to see a modest slowdown, with growth rates dipping from
4.3% in 2023 to 4.2% in both 2024 and 2025. CPI (General) 187.8 183.6 185.8 178.0 176.3 177.2
Global inflation is expected to fall to 4.4% in CY 2025, from Index
5.8% in CY 2024. Notwithstanding the hurdles, emerging CFPI 187.8 193.4 189.8 173.0 178.4 174.9
Global inflation is forecasted to show a steady decline over
the forecast period. In 2023, global inflation stood at 6.8%, markets and developing countries are predicted to sustain Notes: Prov. Provisional, Combd. Combined

which is expected to decrease to 5.9% in 2024 and further consistent growth rates in CY 2024 and CY 2025 with minor
regional fluctuations. Consumer tendency5 These estimates highlight the country's potential for strong
to 4.5% in 2025.
economic growth and development, establishing India as vital
Consumer confidence for the current period has been steadily
Particularly, advanced economies are anticipated to return to in the global economy in the coming years.
Indian economic overview 2 improving, with respondents reporting better perceptions
their inflation targets sooner compared to emerging markets
across all survey parameters. The current situation index
and developing economies.
The domestic economy continues to display strong rose by 3.4 points to 98.5, its highest level since mid-2019. Industry overview
Core inflation, which excludes volatile items such as food momentum, with real GDP expanding by 7.6% in the fiscal Confidence for the year ahead also saw a notable uptick,
and energy, is projected to decline more gradually, indicating The fast-moving consumer goods (FMCG) sector is expected
year 2023-24, driven by robust investment activity. The post driven by increased optimism in all survey parameters. The
persistent inflationary pressures in certain sectors. pandemic recovery of the Indian economy was stronger than to grow by 8.4 % in FY 2023-24. This growth continues to be
future expectations index (FEI) reached 125.2, its highest level lower than the past year as the impact of inflation has still
expected, led by private consumption and aided by a rebound
Geopolitical tensions pose risks to the economic trajectory, since mid-2019. Households expressed improved sentiments not completely abated. This growth continues to be uneven
in government spending.
potentially disrupting global supply chains and hindering regarding the general economic situation and employment across geographies and town classes.7
growth. However, opportunities for sustained recovery exist, Looking forward to expectations of a normal southwest prospects, both for the current period and the upcoming
driven by favorable economic indicators and improving monsoon are poised to strengthen agricultural activity, while year. This positive outlook extended to discretionary spending Growth in the FMCG markets is currently being driven by urban
consumer confidence. the manufacturing sector is expected to sustain momentum as well. Respondents reported a better income situation markets as consumption in rural India is still subdued due to
Overall, the global economy will continue to grow in 2024. due to sustained profitability. Services activity is projected compared to the previous year, with expectations of further the combination of high food inflation and low wage growth.
However, policymakers and businesses will need to navigate to surpass pre-pandemic levels, and private consumption income growth in the year ahead. Overall, the survey reflects
uncertainties and challenges to ensure sustainable and is anticipated to strengthen further, supported by increased a growing optimism among consumers, signalling a positive FMCG spends in the country is also being impacted due
inclusive economic recovery. rural and urban demand. outlook for the economy. to the increase of the Purchase basket of consumers, in
WORLD ECONOMIC OUTLOOK APRIL 2024
particular due to Mobile Phones, data and higher spending
GROWTH PROJECTIONS Inflationary trends Outlook6
on education and health.
(REAL GDP GROWTH, PERCENT CHANGE)
Inflation has softened to 5.4% in 2023-2024, but food inflation India, with its current GDP of USD 3.6 trillion, has secured the E-commerce and digital media continue to enable growth
Global Advanced Emerging Market &
rose to 7.0%. Although expectations of record rabi wheat position for the fifth-largest economy after the United States, as more and more consumers shift to ecommerce platforms
Economy Economies Developing Economies
production and a normal monsoon provide some relief, China, Japan and Germany. By the FY 2031, Indian economy driven by pricing as well as innovative products . Digital media
uncertainties persist due to climate shocks and supply-
3.2

3.2

3.2

1.6

1.7

1.8

4.3

4.2

4.2

will reach USD 6.7 trillion according to CRISIL predictions. In is making discovery of products far more easier than what it
side constraints. Fuel prices remain in deflation, while core was possible with traditional media channels.
the coming seven fiscal years (2025-2031), it is likely to see
inflation has notably declined to (-) 3.4% in 2023-24. However,
Food price uncertainties and continuous geopolitical tensions India surpass the USD 5 trillion level and will also reach the
In the medium-term, growth prospects for FMCG remain
continue to weigh on the inflation outlook.3 USD 7 trillion threshold.
good. Rising incomes and price stability will allow households
RBI noted that the economy's resilience is supported by India will shift to become an upper-middle-income economy, to shift to branded products for commodities and move up
robust investment demand and positive sentiments. However, showcasing a progressing economic landscape. According to the value chain to products that offer better functionality or
persistent food price pressures present challenges to these estimates, in the upcoming years, the country is showing user experience. Consequently, the current uneven growth
2023

2024

2025

2023

2024

2025

2023

2024

2025

achieving the inflation target. Unforeseen supply-side shocks strong potential for economic growth and development. patterns are expected to normalise, leading to sustained
INTERNATIONAL MONETARY FUND from adverse climate events and geopolitical tensions long-term growth across various segments and categories.
contribute to uncertainties in the economic outlook.
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https://www.mospi.gov.in/sites/default/files/press_release/CPI_PR_12Jan24.pdf
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https://www.imf.org/en/Publications/WEO/Issues/2024/04/16/world-economic-outlook-april-2024 5
https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=57366
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https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/0ANNUALREPORT202324_FULLDF549205FA214F62A2441C5320D64A29.PDF 6
https://www.businesstoday.in/latest/economy/story/crisil-predicts-india-to-become-upper-middle-income-country-by-2031-gdp-to-touch-68-infy25-
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https://www.crisilratings.com/en/home/newsroom/press-releases/2024/07/fmcg-sector-to-see-revenue-growth-of-7-9-percent-this-fiscal.html

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Bajaj Consumer Care Limited 18th Annual Report 2023-24

Statutory Reports

Value sales in Cr. Growth of Consumption8 average consumption per household was steady at 1.5 litres,
The food and non-food divisions significantly contribute to (Source: Nielsen Offtake Nos. MAT MAR’24 and Kantar HH
India's FMCG business. In the third quarter of 2023, rural Panel MAT Dec’23) Hair oils remain an essential and enduring
13358

13029

13822 part of Indian consumers’ hair care routine. The resilience of

7267

7304

7842

6091

5724

5980
consumption has shown 6.7% improvement in the non-food
category. Despite facing negative response from the rural the hair oil market is rooted in deep-seated traditions and
markets previously, personal care sector is now witnessing continued consumer demand for nourishing products.
significant expansion and recovery. At the same time, in Overall Hair Oil Market Trends
urban markets, there is a visible growth of 10.4% in the non-
food segment. These trends uphold the increasing demand Value Sales Growth % (YA)
Markets
for FMCG products in urban and rural areas, showcasing the Q1 Q2 Q3 Q4
strength and vitality of India’s consumer market. AI (U+R) 3.7 6.4 6.2 8.2
The Hair Oil Industry All India Urban 7.1 7.9 7.1 7.4
All India Rural -0.3 4.6 5.0 9.2
Growth trend for hair oils was similar to over all FMCG market.
Urban markets outpaced rural markets in FY24 . On long Volume Sales Growth % (YA)
All India U+R All India Urban All India Rural Markets
term basis (MAT March’2024), recovery was visible with the Q1 Q2 Q3 Q4
MAT MAR 22 MAT MAR 23 MAT MAR 24 market growth increasing quarter after quarter. Household AI (U+R) 2.8 5.9 5.6 8.2
Volume in Tonnes / KL penetration continued to be high with 92% of Indian All India Urban 6.9 7.8 7.2 7.9
households having consumed hair oil in last 12 months. The All India Rural -1.6 3.7 3.8 8.6
309177

300507

317279

159975

160697

172627

149202

139809

144652
Q3’23 vs a year ago

12.4
9.0

0.3

8.6

8.1

3.4

8.7

6.3

Non-food
FMCG
All India U+R All India Urban All India Rural Value growth Price growth Volume growth Unit growth Value growth Price growth Volume growth Unit growth

MAT MAR 22 MAT MAR 23 MAT MAR 24

Non-food consumption9
Volume growth % vs a year ago Growth drivers10
Q3’22 Q4’22 Q1’23 Q2’23 Q3’23
Growing hair concerns - With urbanisation, hectic lifestyle, pollution and worsening climate change, people are
10.2

10.2

10.2

10.2

increasingly facing hair problems. Hair ailments like dandruff, dryness, itchy scalp and hairfall are triggering concern.
1.7

1.7

5.3

0.3

4.0

6.4

1.9

6.2

7.5

1.7

1.7

5.3

These have resulted in a higher demand for good hair oil.

Sharpening focus on Ayurveda - Customers are increasingly focusing on homely Ayurvedic solutions discarding
chemical-based products. This shift could be aligned with the rising trend of social media influencers shedding light
on the need for good, clean hair care.

Rejuvenating India’s tradition of hair oil - India has a strong tradition of applying hair oil. This culture has always
been beneficial to the hair oil market. There has been a recent rise in the demand for homely ayurvedic and natural
ingredient oil markets. The traditional oil market promises age-old remedy to all the modern hair-related problems.
The consumers are drawn to these traditional hair care procedures.

Urban Rural Traditional Traditional Trade Modern Trade

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-3.6

-2.8

-2.0

-1.5

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https://markwideresearch.com/india-hair-oil-market/

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Bajaj Consumer Care Limited 18th Annual Report 2023-24

Statutory Reports

Industry Trends Impact of Social Media Company overview par with industry, though there is scope to improve further.
The hair oil market exhibits the following broad trends: Social media, including the role of influencers, is playing a Better customer engagement, participating in customer
FY 2023-24 has seen some revival for the hair oils category.
significant role in educating consumers about hair care in a events, right assortment strategy, and visibility investments
The decline that we were seeing in Fy22-23 has got arrested
1. In rural India, low-price brands and low-pick up price more comprehensive manner compared to traditional media. both in modern trade and e-commerce are a few of the levers
and the category has seen flat to positive movement in the
SKUs (`10/- `20/-) are commonly consumed. This The influence of this medium is contributing to the popularity which the company drove and has resulted in a significant
year. Most of the Hindi-speaking markets, where most of the
trend has been further accelerated due to the impact of of hair oil as a preferred solution for hair nourishment, performance in organised trade. We will scale up further,
contribution of the Company comes from, still continued to
inflation on consumers' spending power. even as consumers explore various hair styling options and focusing and capitalising on the realms of e-commerce,
decline in large part of the year but at a lower level compared
chemical treatments. and B2B. The upcoming year will be dedicated to expanding
2. In urban India, E Commerce penetration continued to FY 2022-23. Demand in rural markets has been a key cause
distribution channels, with a particular focus on the
to increase. As a consequence E commerce is now of concern in FY 2023-24. Despite the category constraints,
Outlook the internal growth of the organisation has been better in
e-commerce space. There will be increased investment in
no longer a preserve of premium products. Products enhancing visibility and brand presence. The goal is to reach
across the price spectrum are now being purchased on The long-term outlook for the hair oil industry continues to this financial year on the back of exceptional performance by
a wider consumer base and strengthen market penetration
Ecommerce platforms. be positive despite the short-term challenges and demand organised trade. Organised trade registered a phenomenal
by leveraging online platforms and improving overall visibility
slowdown. The industry provides ample growth opportunities, growth of 21.9% in FY2023-24. General trade on the other
in the marketplace.
3. Many consumers are mixing hair oils and various kitchen driven by a growing population, urbanisation, premiumisation hand had been under pressure.
ingredients to create their personal oils, leading to an and increasing demand for value- added products. The FY 2023-24 was a year where we continued to scale up new
increase in the usage of various pure oils like coconut, Company strives to leverage these opportunities and will Sales and distribution products which were launched in the previous year. Bajaj
castor, curry and so on. continue to launch innovative products that meet diverse Coconut oil showed good traction. The Non-Almond drop
Distribution remains the backbone of the Company, as we
consumer requirements and fuel its future growth. Automation portfolio contributes 13% to the overall business which has
4. Many consumers are also adopting more and more hair continue to be the market leader in terms of outlet reach,
in operations will be instrumental in strengthening its supply improved by 9% over the previous year. This aligns perfectly
care products and regime usage is going up . Hair oils with close to ~43-lakh outlets serviced nationally as per
chain and improving processes, while ensuring premium with our efforts to reduce reliance on the Almond oil portfolio.
are being used in tandem with shampoos and serums. Nielsen. During the financial year under review, the Company
quality and the ESG responsibilities of the Company are met.
also focused on driving direct reach and increasing the retail During the year under review, significant attention was given
Long-term Outlook of Hair Oil Consumption Further, the Company will continue to invest in marketing
contribution. Key stores within the retail channels were to enhancing the sales capabilities of our front-line sales
and advertising to help reinforce its brand name and new
Traditionally, hair oil has a strong prevalence in the Indian strengthened through improved loyalty programmes. The team. Comprehensive learning modules were developed and
product launches.
market as applying oil on the hair has always been a routine Company has witnessed 19% growth in retail loyalty outlets the team underwent intensive classroom training programs
practice for ages. The following trends will ensure that Beauty and personal care (BPC) market11 channel on the back of increased investment in key stores to reinforce their knowledge. Additionally, e-modules were
consumers keep using hair oil for benefits such as healthy and driving sales effectiveness. The focus next year will be on created to further support their learning. The emphasis
The global BPC market is expected to become a USD 660
hair, dandruff-free hair and zero-hair fall. how to maximise range selling in our existing set of outlets. on driving sales fundamentals and improving sales
billion market by 2027. The beauty and personal care industry
The rural town coverage expansion, which started two years efficiencies remained strong, resulting in positive growth in
Increasing Hair Concerns of India has scaled up in the global markets with a valuation of
back with van operations continues with a strong network of the retail sector.
USD 14 billion. According to a report, the Indian BPC industry
Present-day lifestyles and environmental issues like pollution ~550 vans functioning nationwide.
accounts for about 5% of the global economy and is reported The focus on data analytics through front-line SFA has been
are creating a range of hair problems, such as dryness, dandruff,
to reach USD 30 billion by 2027. It is predicted that India, now Organised trade has done well in FY 2023-24. The Company key this year. Van operations were also GPS-enabled from
hair breakage, and so on. This will ensure the continued
under-capitalised, will contribute 33% to the global economy is aggressively driving distribution and penetration, both in tracking and compliance perspectives. Looking ahead to
relevance of hair nourishment, providing hair oil brands with
with a CGAR of 10%. The online or e-commerce platform modern trade and e-commerce channels. Organised trade FY24, we plan to further enhance efficiency by automating the
an opportunity to effectively capitalise on this demand by
is forecasted to become a massive marketing channel now contributes 25% to the India business, which is now on review and monitoring mechanisms.
incorporating validated ingredients like vitamin E into their oils.
for the country.
Growth drivers Key initiatives for sales and distribution

Demand for Clean Products: Increasing consumer preference for clean and natural beauty products along with organic Increase in market interaction in the markets of Punjab, Delhi, Rajasthan and Madhya Pradesh through organised trade;
compounds, anti-pollution and anti-ageing properties are driving growth. This trend aligns with the rising awareness of Separating distribution channels for large packet sizes and medium to small packet sizes to reduce channel conflicts;
sustainable living and ethical consumption practices among Indian consumers.
Separate 700ml packets have been introduced for markets seeking out large-size product packets;
Popularity of Customised Products: An increasing popularity of customised beauty and personal care products can BCCL has introduced and is pushing the 10-20 rupees small sachet for Almond hair oil products;
be observed. Consumers are seeking products that cater to their specific needs and preferences. This focuses mainly
on skincare solutions for different skin types, haircare products for diverse hair textures and eco-friendly formulations. Attractive offers have been placed for Uttar Pradesh, Rajasthan and Madhya Pradesh to boost sales;
BCCL has introduced new Non-Almond Hair Oil (NADHO) products and the products are being pushed strongly
Shifting Consumer Focus Towards Premium Products: In India, more customers are preferring premium beauty
into the market;
products. This trend is expected to drive incremental spending. Most consumers are upgrading to branded, higher-
priced products with enhanced features and quality. During COVID, BCCL began VANS operations, which have now grown into a full-fledged operation with over 500 VANS
operating in various states.
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report-11693566478724.html

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