Quality is What Makes a Product a Hit! -Vinod Patel
-Raw material prices, packaging, quality and rate control a major challenge in the industry
Just like big fishes eat small ones, nowadays a similar scenario is being noticed on a large scale in the dhoop and agarbatti industry. With skyrocketing prices of raw material, aggressive marketing strategy and schemes offered by big brands, it has become difficult for small manufacturers in the industry to compete and at the same time manage quality and rate control along with attractive packaging and schemes. Mr. Vinod Patel of Dhanlaxmi Industries, in a conversation with the Sugandh India, about the dhoop and agarbatti industry, highlights the challenges of the industry and that there is a tough competition in the market. In such a situation, it has become difficult for small businessmen to carry on with operations. He said that the agarbatti industry today has bexome technical. Big brands are working in the market with huge capital investment. The prices of raw materials have soared up to as much as 40 percent. In such a competitive situation, only those survive who maintain quality and low price.
Sharing the story of his firm with Sugandh India, Vinod Bhai said that Dhan Laxmi Industries was established in the year 2004. His father has been part of the industry since last 50 years but the brand name came in existence later in 2004. The products of Dhanlaxmi Industries are available across the states of Gujarat, Maharashtra, West Bengal, Chhattisgarh, Uttar Pradesh, etc. The company has two brands namely Dhanlaxmi for its agarbattis and Jai Ganesh for dhoop products. Jai Ganesh has a range of over 40 different dhoop products, while the Dhanlaxmi brand has a range of around 300 agarbatti products. These are available in zipper packs ranging from Rs 10 to Rs 100. He said that Dhanalakshmi’s core market is premium masala agarbattis with MRP ranging as high as Rs.900 and above. Other than agarbatti an dhoop products the company also produces cones. Also with the increase in trend of body spray and roll on, the company is planning to soon come up with its own brand of roll ons. These will be targeted to all segment of customers as per the demand.
In response to a question regarding price to quality and quantity ratio, he said that it totally depends on which segment one wishes to be in, you can sell 10 sticks for Rs 50 as well as 50 sticks for the same amount. The major market is of Agarbattis costing Rs.10, 50 and 100 rupees. 70 percent of the products in market belong to these three price ranges. The remaining 30 percent are in the other category.
In responding to a question regarding dhoop, he said that the market for dhoop is growing rapidly, but most of the brands are providing inferior products and spoiling the market. Raw material prices have gone up. The price of oil has soared up by 40 per cent. Along with this, big brands are offering schemes up to 8 percent separately. These aggressive tactics by big brands is only spoiling the market and is not good for the industry. In response to packaging trends in agarbatti industry, Vinod bhai told that changes are always happening and its not only restricted to agarbatti industry, earlier it used to be in boxes but now zippers and pouches have taken over the market. Soon zippers and pouches might also go out of trend. Earlier packaging was limited to 100 gram but now goes as high as 900 grams. There will always be changes happening.
On a question regarding changing fragrance trends, he said that there is a constant demand for new fragrances in the market. The traditional frgrances namely sandalwood, mogra, champa, rose are always in demand in agarbatti, but consumers always want something new. This is the reason why most of the enterprises are bringing out their products in hundreds of fragrances. Now even though all of the companies have hundreds of products, still only few obtain regular sales.
On talking about the increase of sales during festival season, Vinod bhai explained that it is different than what it seems, the sales seem increased because rainy season precedes festival season and during rainy season due to moisture the production of agarbatti is low and as the rainy season ends and festival season begins, the production is increased again and therefore sales are higher. Its only psychological that people feel that sales have increased, while in real there is demand in the market throughout the year.
In response to a question regarding marketing and schemes, he said that it has become a rat race and everyone is blindly offering schemes to fight competition, which is wrong. We never concentrated on schemes or freebies with product, but now we dont have any choice. Instead of schemes, one should concentrate on quality of product as that is what a customer ultimately wants.
On the best-selling products of Dhanlaxmi industries, he said that Ganga-Jamuna-Saraswati and Wonder Woods, Sandal Woods in premium are in highest demand. Well, there is different demand in every state but these brands are our bread and butter.
He said that today Gujarat has become the hub of dhoop agarbatti industry and Ahmedabad is its centre. The brands here are going beyond Gujarat to other states and all over the country and abroad. Gujarat’s products have captured 30 percent market share in the industry. Earlier retailers would only give space to products that had Bengaluru address but now times have changed and Ahmedabad products have also captured a good market share.
Regarding exports, he said that Dhanlaxmi products are exported to 3-4 countries including Australia, Africa, US, etc. The highest demand for Indian agarbatti is in Africa, US comes second in demand. He said that agarbattis are used in foreign countries as air fresheners and room fresheners. The demand is mainly in hotels, malls and offices. The traditional fragrances of lavender, rose and sandal are globally highest demanded.
