CavinKare bets big on digital-first brands to grow topline
Chennai-based FMCG company CavinKare is looking to expand its D2C portfolio to add Rs 250 crore topline revenue over the next three years.
FMCG major expects its portfolio of direct-to-customer (D2C) brands to rack up Rs 250 crore in revenue in three years’ time. The company, which operates in personal care, food and snacks, dairy and salon products spaces, has started the Ecommerce SP division with two brands, and is looking to expand its portfolio to eight brands in three years.
CK Ranganathan, Founder Chairman of CavinKare, said that the company had conceptualised a separate division for digital-first brands in 2020. “We have floated a separate ecommerce-only brands division which functions like a startup where no corporate rules apply. We have launched two brands so far and an additional five to six brands are in the offing over the next year,” he spoke on the sidelines of TiE Global Summit 2022.
He added, “There are two ecommerce plays within CavinKare—one is for our traditional mass brands. The D2C brands come under the ecommerce startup play which has a team of 14 people and works differently from the main entity.”
The Ecommerce SP division has thus far launched 'Salon in a Box' for use by beauty professionals as well as customers for at-home use, and a pet care brand called Petterati. Apart from these, the D2C vertical has also been retailing its personal care range under the Buds and Berries brand across channels including Flipkart, Amazon, Nykaa, Myntra, and others. Ranganathan added that the vertical was looking at adding D2C brands in the food and snacks and dairy segment as well.
“We expect at least one of the personal care brands to grow to Rs 100 crore revenue over time,” Ranganathan told YourStory, adding that the company was not looking at any acquisition play yet.
He added that the company saw its traditional offerings in the salon and dairy space being hit by the pandemic even though ecommerce as a channel continued to perform well. As part of its filings with the RoC, the auditor’s report on the annual results of CavinKare stated, “Your company has started eyeing more on building strong ecommerce specific product portfolio, digital-first products apart from lining up more exclusive launches online.”
The strategy followed by Chennai-headquartered CavinKare is similar to that followed by multiple FMCG companies which are going with a house of brands strategy by investing in or acquiring D2C brands to bring in differentiation. Dabur, HUL, Marico, ITC, and Reliance Retail have spoken about their plans to grow their ecommerce presence through digital-native brands.
CavinKare registered a consolidated income of Rs 1,592.65 crore in FY 2021 with a profit of Rs 4.4 crore for the period. The company plans on bringing its D2C offering to modern trade depending on the success and popularity of the brands.
Some of CavinKare’s popular mass-market brands include haircare brands like Meera, CHIK and Nyle, skincare brand Spinz, salon brands Raaga, Lava Berry, and salon chain Green Trends, among others. CavinKare also has a strategic alliance with COTY Inc to distribute the personal care range of Adidas and Jovan in India.
Edited by Kanishk Singh