Categories Analysis, Health Care

The Revival of Amrutanjan Healthcare Limited

Amrutanjan’s flagship yellow headache balm is possibly its most successful product. It is also among the first products that the company launched. Amrutanjan Healthcare most focuses on developing by the following techniques:

  • Working on the development of its core head pain balm business by expanding geographically beyond just states in the south, practising product innovation (roll-on), and addressing the changes in market dynamics.
  • Foraying into different segments of the FMCG sector like sanitary napkins, beverages, etc via a measured capital allocation strategy.
  • Targeting other adjacencies like body pain balm sector for instance.

Amrutanjan Healthcare’s Critical Success Factors:

Consistency in efficiently operating improved business processes:

Sales force automation: The idea of sales force automation was implemented by the company in 2018 to aid the firm’s processes. However, for a small company like Amrutanjan, the biggest challenge in implementing this idea was regarding scalability when it is expanded into North and West India and also to scale the introduction of new segments like sanitary napkins.

A revamped distribution model: Before 2009, Amrutanjan mainly practised following a pharma distribution and wholesale-oriented model. The problem of the same was low control and visibility over channels as well as the lack of a direct relationship between the retailer and the company.  However, in 2009, with an intention to grow its direct reach with the kirana/grocery stores and chemists, the company shifted towards following an FMCG model of distribution.

Addressing challenges in growth by investing in innovation and foraying into adjacencies: 

In India, the head balm market is comparatively saturated, and the market penetration among the younger generation is low.  This is how the company deals with this challenge: 

By placing more emphasis on body pain management and congestion management in recent years, it has expanded its target market. Given that the primary ingredients and supply chain for head balms remain virtually the same, body pain and congestion are logical extensions of the head balm industry. 

The company has also introduced cutting-edge packaging for all of its pain management treatments, including roll-ons, sprays, and pain patches, which are more popular with the younger crowd. One of the company’s most well-received products in the Head & Body pain sectors- Roll-on-  now accounts for almost 10% of the company’s total net sales.

The Company’s foray onto sanitary napkins has the potential to revolutionise the game in the long run:

Currently, the Sanitary napkin segment occupies a ₹ 4,000 crore market and is hugely dominated by Stayfree (J&J) and Whisper (P&G) for many decades. However, due to lack of awareness, affordability, and availability, this market remains to be a highly under-penetrated category with penetration levels ranging between 20-25% currently.

In 2013, Amrutanjan forayed into this category launching the Comfy brand. Its focus remained on first time users and cloth users in the under-developed/rural areas where there is a significantly low penetration level owing to the unavailability of napkins at affordable prices. The company’s partnership with Bella Hygiene, which is a leading manufacturer of women’s hygiene products in Eastern Europe and Poland, allowed it access to superior technology which in turn helped them ramp up the quality of their products and offer them at a 20-25% lower price than that of the incumbents. Due to the application of this strategy, Comfy garnered a double digit market share in West Bengal and Easter states of Odisha (17%). Amrutanjan’s superior distribution, brand equity, and higher advertising spend in contrast to its competitors.  

By gaining sizable market share in sections of Eastern Uttar Pradesh and Madhya Pradesh, Comfy has also assisted the company’s integration into the North India region (where it  traditionally had a weak presence). Nonetheless, despite this rapid expansion, Amrutanjan still holds a meagre share (less than 2%) in this sector, showing enormous prospects for the company.

Key Challenges:

Risk of competition and government regulations on the pricing power of sanitary napkins: 

The company’s main 3 competitors, Whisper (P&G), Stayfree (J&J), and Sofy (Unicharm), have so far controlled the majority of the Indian sanitary napkin industry . But during the past several years, a number of new businesses have joined the market and grown to a respectable size in an effort to capitalise on the enormous potential in this area. The competition can become more intense by lowering entry barriers in the areas of manufacturing (due to low cost Chinese machinery), distribution (expansion of Modern Trade), brand, etc. The possibility of government intervention through subsidised goods or price controls to further increase the accessibility and affordability of sanitary napkins also poses a threat, given the vast under-penetration of sanitary napkins in India.

Challenge of Sustaining and Improving the resonance of balms: 

The younger generation has a substantially lesser affinity for balms. Pharma corporations are also introducing allopathic alternatives, which are being promoted by vigorous marketing campaigns. The core balm business runs the danger of contracting or stagnating in such a situation. Yet so far, Amrutanjan’s initiatives to introduce innovative products, such as roll-ons, which appeal to the youth generation, have been successful.

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