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Outsourcing tackle

Kanika Goswami | June 8, 2008
When the old have the agility to take on the young: it's a formula that people love. So when the 114-year-old Indian company Dabur outsourced its IT in order to stay quick-footed, plenty of industry watchers held their breath.

You took ayurvedic medicine corporate. But now with over 50 brands, how do you maintain brand sanctity?
Today, Dabur is the world's largest natural healthcare company and while it is true that Dabur's brand portfolio has grown, the fact also remains that a common thread binds them all together: the company's herbal and ayurvedic heritage. All the products in Dabur's portfolio are based on herbal and ayurvedic ingredients and this herbal heritage helps it maintain brand sanctity, whether in the personal care space, or in health supplements. All new product developments are also based on a herbal platform.

This heritage helps Dabur's brands outpace MNCs -- both in the oral care space and in the hair care space -- and become the fastest growing brands in their categories.

But doesn't the Balsara (homecare) acquisition seem like a move outside the herbal space?
The homecare portfolio is the only product line that operates outside the herbal space; it is an acquired line-up. In our core FMCG portfolio, which includes personal care and health care products, Dabur India continues to operate in the herbal and ayurvedic space. All new product developments in our core categories also continue to operate in the herbal and ayurvedic arena. Dabur has a huge herbal heritage and we intend to continue operating on the herbal platform in the future.

Why did Dabur exit the pharma business?
IT was a strategic decision by the Burman family. The family is happy to have created significant shareholder value through this business in a short span of time. The proceeds from the divestment of Dabur Pharma will go into family investments. There are several options we could look at -- insurance being one. Going forward, we need to re-evaluate our entire portfolio before we invest elsewhere.

You have forayed into health and beauty products. Why?
Dabur recognized a gap in the health and beauty retail space in India. There's a growing need for quality service and store environment in that space. With no major player, moving in now would give us an early mover advantage.

The Indian consumer has come of age. But the shopping experience here has not kept pace with this change. Even though retail outlets have mushroomed across the country, most of them still do not offer consumers the kind of shopping experience that people in the rest of the world are used to.

Dabur intends to tap the growth prospects in both the retail market and the health and beauty segments. Our USP will be an unique store environment and a diversity of products that will be on offer at the stores. Dabur has set up a wholly owned subsidiary, H&B Stores, which is in the process of establishing a pan-India chain of specialty retail stores in the beauty, health and wellness sphere. The first of these retail outlets, branded new u, opened its doors to customers in Delhi in March 2008. With new u, we are committed to bring a world-class shopping experience to India. We have already established six new u outlets and are expanding its presence to more cities.


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