05 Aug Cheap Local Incense Sticks a Threat to Brands: Shoban Babu
-E-commerce would swipe away retailers and distributors if they dont reduce their margins
-Industry in need for standards
-Sandesh handmade agarbatti popular all over country and abroad.
Karnataka is a hub of major dhoop and incense stick manufacturing companies. Owing to that, Sandesh Agarbatti Company was established in 1970. The third generation Shoban Babu is handling the business and believes that cheap incense sticks are being manufactured on every nook and corner of the country, which harm the brands. In a special conversation with Sugandha India, he said that people consider ITC as the main competitor, but the truth is that it is like an elephant in appearance, but small local manufacturers will eat the brands like termites. Today the biggest concern of all the major brands in the industry is how to protect their brand? Similarly, Amazon and other e-commerce companies are replacing distributors and retailers buy products from the company for Rs 5-6 and sell them for Rs 10 to 15, keeping their margin high.
Shoban Babu told that 44 years ago my grandfather used to sell incense sticks from village to village and door to door. Then my father took over the business and he increased production and established Sandesh products in the domestic market. After this, today we have the third generation, which has taken the brand to the international level. Even in this era of mechanization Sandesh’s products are hand made and export to many countries.
Responding to a question, he said that Sandesh is a hot selling brand, but fake or counterfeit products are a big challenge. We are also in association and want the government to do standardization and set standards for incense sticks and incense products, which has not started in India yet. He said that we are in export and no product can be launched in the market without the standards there. The government has also taken a step in this direction and it remains to be seen how it is regulated. On the question of standardization, he said that there are small scale producers in the villages. Certainly they will not implement the standards set by the government. Initially it will be applicable to big companies only. The biggest problem is that if there are 1000 producers, out of that 900 are the small ones. How the government will bring them under the scanner is a big challenge. After fixing the standard, the quality, thickness, length and packing of incense sticks and other products should be decided.
People in the industry today think of ITC as a challenge, but the reality is that the real challenge is the door-to-door producers. He said that 15-20 years of hard work has brought the brand to its place, but today the battle for MRP has intensified. Fixing MRP has become difficult. A consumer sees the same product at different rates in the market. Big companies give advertisements and its expenditure also adds to the cost, but a company like ours which does not spend on advertising has to give their product to the distributor for Rs 5-6, while the MRP on it is Rs 15. Some sell it for Rs.10 and some for Rs.15. while brands like Cycle sell for the MRP mentioned. In this situation, online sales will only save the quality brand. He said that there should be best price for best quality.
Counterfeit products is a big problem. While on one hand there are brands with similar names and packaging, there are many who are copying the branded products. There are strict rules against counterfeit products, there is trademark, there is brand registration but still counterfeit products are runnning in market indiscriminately. Its a loss to the big brands as well as the customers and the government. There are also many people who do not manufacture, but have registered many brand names, action should be taken against this too. To control the counterfeit products, both the big brands and the government will have to take stronger steps. Even if we gradually put just 10 percent efforts to control, there will be a lot improvement in the coming 10 years.
Shoban Babu said in response to a question that there are around 60-70 products of Sandesh in the domestic market, which are sold in MRP of Rs 5, 10, 15, 50 and 100. These are supplied to the domestic markets mainly in Karnataka, Tamil Nadu, UP and Bihar. The cost of transport is very high in supplying to the states of North India. On the contrary, there is a good market in the states of South India and the cost of transport is also low.
In response to a question, he said that the products which are exported are all different and of high quality. Export quality products are completely different. It depends on what people like as a fragrance. Different types of fragrances are preferred in every country. Just as oudh is preferred in Arab countries has a different aroma, similarly different fragrance is liked in Europe. He said that about 100s of products of his company are exported through Mumbai. Soon the company is going to launch some new products namely Fashion Sandal, Fashion Rose,etc.
On the question related to handmade dhoop and incense sticks, he said that the main production of incense sticks in the company is from villages. They roll and produce raw batti at their homes.
We have contractors who take raw materials from us and provide it to villagers to prepare raw batti. There are three such units, which deliver raw materials from village to village and then collect the finished raw batti from there. We have also kept machines, but the quality of machine cannot match with handmade. The kind of raw material used in handmade incense sticks do not work on machines. Owing to this, today we are able to produce export quality. It is true that its price is high, but there are people who like hand made incense sticks in the country and abroad as well.
He said that all our products have hand-made written on them. Apart from this, through handmade, we are also able to keep the secret formula of our product safe. It is not possible to produce the same with machines. Burning handmade incense sticks has a different quality and aroma, which cannot be done through machines. He told that thousands of people from village to village are involved in manufacturing handmade incense sticks. At the Panchayat level, every day of the week is fixed for one village. A person collecting and supplying raw materials goes to a village on a certain day in a week to collect and deliver the raw materials for the next week. A whole chain has been created.
It is true that the machine can produce 10 times, but the specialty of our brand is hand made.
Through Sugandh India, I want to tell people that when you buy a product for the sake of God and for the fragrant atmosphere of your home, it should be of the best quality. People use incense sticks and many chemicals to drive away mosquitoes, but put camphor in a vessel with water in the room, then mosquitoes will not come at all.
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