This multi-crore perfume brand was started by a rice farmer with only Rs 500
In the late 1940s, near Hojai village in Assam, a rice farmer searched the dense jungles for ‘oud’ - a precious scent and fragrant oil from the agarwood tree. Haji Ajmal Ali believed if he could find enough oud, he could start a business in the perfume industry and change his family’s fortunes.
In 1950, he took some oud and his meagre savings of Rs 500, and left his homeland in northeastern India and reached Mumbai. On reaching the commercial capital, he became a supplier for oud and agarwood, which he sourced from Assam.
But this was not enough. He wanted to be a perfumer and not just a middleman. So, in 1951, he started blending various kinds of fragrant oils and created a range of perfumes. This completed Haji Ajmal Ali’s unlikely transformation from a farmer to a perfumer.
In the 1960s, he opened his first store and gave his family name to the product range. Blending fragrances himself also sparked the beginning of the Ajmal Perfume empire.
Haji Ajmal Ali’s fragrances became so popular that his small, family-run business grew into a large perfumer with over 300 products in its portfolio, presence in 36 cities in India, and over 240 retail outlets globally.
In 2011, it was reported that the company had a turnover of Rs 1,475 crore ($200 million). However, the company does not wish to disclose its current financials.
It claims it now has presence across 40 ecommerce sites and has become one of the biggest single-brand perfumery houses in India.
Abdulla Ajmal, a third gen entrepreneur at Ajmal Perfume
In conversation with SMBStory, Saurav Bhattacharya, President, Operations, NHA division of Ajmal & Sons India, explains how the company is tapping into the Indian market for perfumes.
Excerpts from the interview:
SMBStory [SMBS]: What is your manufacturing focus in India?
Saurav Bhattacharya [SB]: Ajmal has Indian origins, but in 1976, Haji Ajmal Ali moved the company’s headquarters to Dubai, UAE, and opened the first Ajmal outlet there.
But we saw India’s fine fragrance market was just starting to mature and Indian consumers were moving towards fine fragrances from deodorants. So, in India, we started the New Horizons of Ajmal (NHA) division.
Our strategy was to establish price points that were adjacent to what consumers wanted, and were placed efficiently in the gaps. We put together a team of 190 in our Mumbai NHA division.
SMBS: What is the USP of Ajmal’s products?
SB: Ajmal’s fragrances are conceived, created, developed and manufactured in-house, and we are not afraid to break the mould to look for innovative solutions and re-imagine our fragrances. Oud and oud oil is still our DNA.
Our R&D team constantly monitors the olfactive trends worldwide and builds an understanding of consumer behaviour, product preferences, and competitive landscape across countries.
This helps us know the fragrances that the customer base prefers, and then we match them with our brand history and vision.
SMBS: What is your pricing strategy?
SB: Ajmal has identified consumer needs that existed but were not defined. More importantly, the buying pattern is pyramidic and is determined by price points. Rs 4,000 and above is where international fragrances come in.
Ajmal, being a homegrown brand, aspires to be offering international quality at an affordable price. To achieve this, we look at different price points in the range of Rs 1,000 to Rs 2,500.
Ajmal is able to achieve this because we are one of the only companies in India with an integrated value chain, right from sourcing raw materials to delivering products to the end consumer.
The Ajmal manufacturing unit in Dubai
SMBS: Who is your target audience?
SB: Working millennials aged between 25 and 40 years are our target. They are consumers who want to look good and feel good, and to achieve both, smelling good is just as important. These are the people who want to stand out and accentuate their personality.
For them, perfume is a defined lifestyle category that is moving from planned purchases to impulse purchases. Therefore, being able to capture the market through the range of impulse purchases is crucial.
SMBS: What is your retail strategy?
SB: By channel, Ajmal always worked through COCO (Company Owned Company Operated) model, which meant we had self-owned stores. But now we are aggressively working with a new mix of channels which comprises Modern Trade, E-commerce, Distribution, Wholesale, Retail, Licensing, Institutional, OEM and so on.
As far as online is concerned, Ajmal has already penetrated through the top 15 to 18 sites. The depth of penetration is the critical factor in the long run as 80 percent to 90 percent of sales is contributed by the top five online sites. We aim to leverage ecommerce as much as we can by getting our website ready over the next 12 months once the beta is tested.
The offline strategy is to methodically expand state by state. Ajmal wants to expand its footprints through wholesale points across the country. The most important factor being proliferating brand price points across departmental stores which are relatively premium. We have already partnered with some of them.
Partnering with brands and people through licensing, co-branding or private label is one opportunity to latch on to as it brings enormous coverage. We want to now establish lower price points to make it adjacent to the FMCG industry.
The Ajmal team
SMBS: What were the challenges Ajmal faced?
SB: Our biggest challenge has been to educate growing and evolving customers on how to approach the vast subject of fine fragrances for their personal grooming.
We make a conscious effort to push content through various marketing channels that educates and empowers consumers in understanding fine fragrances.
SMBS: Who are the competitors? How is Ajmal staying ahead of them?
SB: Anybody who makes a fragrant product is our competitor, and this is not necessarily limited to fragrances alone. Even an incense manufacturer is a competitor. However, if we look at the space of perfumes only, we are ahead because there is nobody else who goes through the entire journey from farm to fragrance.
Our opportunity areas are broader in sourcing, manufacturing, filling, manufacturing, and co-developing for others.
But there are other prolific players when it comes to certain price points. For example, Rs 4,000 and above has a particular segment, and so does Rs 2,500 to Rs 4,000. There are also unbranded, low branded, unknown, and local-level perfume players in the price band between Rs 400 to Rs 1,000.
SMBS: What are the future plans for the company?
SB: We started with a limited number of points of sale, but we aim to get to 500 points of sale by the end of March 2020 and are also ambitiously aiming at crossing 2,000 points of sale in the next two years.
We are now cutting across markets by increasing depth and width. By width we mean we want to expand our physical presence by increasing the number of outlets across geographies and locations.
(Edited by Javed Gaihlot)