Rising Logistics Cost Affecting The Industry – Sandip Patel
INNOVATIVE FRAGRANCES, USP OF NISHAN
Dhoop and agarbatti industry is facing a potential challenge due to the rising prices of petrol and diesel and the cost of logistics. Transporting a product from one state to another requires heavy expenditures. Pratik Patel and Sandip Patel, owners of Nishan Products, in a conversation with Sugandh India, explain how the cost of logistics get equal to the production cost and distributor margin combined if they have to transport their products from Gujarat to north east.
From Raw material to Agarbatti Manufacturing
In a conversation with Sugandh India, Sandip Patel shares that he is part of the second generation, of his family business. This company was started back in 1998 as a raw material supplier to the agarbatti industry.11 years after that the company started an agarbatti manufacturing division and that was the birth of Nishan brand agarbattis. The company at the start launched 25 agarbatti products simultaneously under the ‘Nishan’ brand packaged in Rs.10 pouches and Rs.50 zippers. The company is now manufacturing over 350 products and supplying them across 13 states.Other than agarbatti and dhoop, Nishan also manufactures pooja samagri, sambrani, camphor tablets, etc. Regarding exports, Sandip patel elaborates.” as of yet we do it only as per the demand, every year we export around 2-3 containers as per demands from few countries.” When asked about the success of their brand, he said that it is due to our exisiting raw material business.” He further adds,” My brother Pratik patel has done an extensive research over 3 years in aroma chemicals and he is an expert now. Other than this, during our initial days we spent a lot of time in market and gathered feedback from distributors and customers who very much helped us in strongly establish Nishan as a brand.
Nishan specializes in innovative fragrance
Responding to question regarding their most popular brand,Sandip patel and Pratilk patel shares that Nishan’s most popular products are Rs.50 zippers. All of Nishan products come in attractive packaging and rich fragrances.Talking about their USP, Sandip patel said,”The traditional fragrances like rose, mogra, sandalwood, champa, jasmine, etc are well established since ages and so we emphasized on new fragrances. Pratik patel added We focused on fragrances that you usually get through air fresheners or perfumes and we gave that in agarbatti and it was a instant hit and we are still committed to such innovations.” Ambrosia is our top selling brand and Nishan is today the leading brand across Gujarat. Other than Gujarat, Nishan is also demanded across Uttar Pradesh, especially in Purvanchal, he added. Sandip patel explained that fierce competition in the fragrance industry motivated them to greatly focus on product quality, marketing strategy, innovative packaging, and distributor and dealer margins.
The challenges in industry
On asking about the challenges faced by the incense sticks industry, Sandip patel said that bamboo is currently being imported. If the government decides to ban bamboo imports, initially it will be an issue. Highlighting another major challenge in the market, he said that it is the locally made products. Nishan has a range of 350 products. We can survive because we make our own raw materials, packaging and fragrances, but the one who has to procure everything from outside, for them high inflation has become a bane in the survival of their business. We keep on bringing new products every now and then and due to these new products we stay strong in the market and retain popularity. In addition to traditional fragrances, we have also introduced new products like Cool water Fragrance, Oriental, and Fruity fragrances.
Consumer prefers something new
On a question regarding what does a consumer demand, he said that the new generation likes new kind of fragrances, which is why a number of products with body spray and perfume like fragrance have been introduced? Customers want something new, something innovative and so we offer them that, new fragrances in new attractive packaging. This is crucial if you are a new player, you need to provide something different if you want to enter the market. This has definitely increased the competition in the industry. As long as people have capital to invest, there will be new brands and the one who cannot put money into the business will be out. Nishan’s products range from MRP of ₹5 to ₹10, 15, 65 and ₹70. Apart from the premium 150 grams for ₹ 50, there are also premium packs of 300 grams, 400 and 450 grams and premium products are more popular in the market, he added. On asking about the market of rural areas, and small towns, Sandip Patel said that these areas have higher demand of products that are cheap along with high quantity are sold here. However, the popularity fine fragrance is on rise in rural areas as well.
Increasing cost of logistics is an issue
On the question regarding supplying to other states, he said inflation, price hike and logistics cost have increased significantly. The freight is more than the distributor and manufacturer margins and that is pinching. The prices of raw materials have increased, but distributor insists on high quality products are cheap rates. The manufacturer has to keep a lot of such factors into account as the distributor does not want to reduce his profit. Concluding the conversation with a question regarding the affect of E- commerce, Sandip patel said that it will not have a drastic effect on the industry as it is also bound with increasing logistic cost.
