Narrow focus helps in FMCG, consumer business - Wipro consumer experience

Wipro Consumer grew from Rs. 300 crores in 2002-03 to Rs. 6,000 crores in 2015-16

(13 years, 20 times sales growth)

Strategy - Narrow Focus

1. Product Focus - Wipro focuses on personal care and home care segments

While in a country like India where lot of new players are disrupting, like Patanjali launching products across categories, a narrow focus is considered a viable strategy.

For an FMCG company to focus on all categories is tough, because then you have to maintain those many SKUs, so many products coming out and managing all that becomes difficult. You are up against strong players in every category. So, trying to focus on one or two categories and trying to become strong in those categories in a better way of branding.

2. Geographic Focus - Wipro focuses on narrow geographies
Example - West and South in India

In China, Wipro consumer made an acquisition which focuses on Guangdong, a province in China with a GDP of $1 trillion
Lessons for doing business in China: One of the reasons why many companies going to China don't have good experience is because they are all over the place. We focused on one geography and it helped us.

Strategy - Market Leadership 

Wipro consumer tries to compete in select areas where it can achieve market leadership or top 3 positions

Examples:
Santoor dominates in West and South India
The Chinese acquisition is the 3rd largest player in Guangdong in personal wash, roll-on and liquid detergent segments.
Indonesia - No. 1 in fragrances, No. 2 in female personal hygiene
Vietnam - No. 2 in shower wash

Strategy - Acquisitions 

Wipro consumer made 10 acquisitions in the last 13 years.

Example - Santoor, glucovita, Yardley, Chandrika, UNZA, Chinese acquisition being the latest

If any of the above acquisitions have not worked then we would not have been so aggressive on acquisitions. Company focuses on organic growth too. It doesn't do acquisitions for the sake of acquisitions.

Strategy - High Growth geographies, High Growth Categories 

Country focus - Indonesia, Vietnam, China, - sizable populations and developing economies

Growth Categories - Focus on personal care and household care
For example, we looked at liquid detergent category in China for the acquisition in China, because powder detergent is well penetrated while liquid detergent is still growing and is fairly small.

Similarly, we looked at fabric conditioner in India but not in Indonesia where is a well penetrated.


Source: Business Standard, jan 12, 2017