Reckitt Benckiser's rare reflection: India a big growth driver

Economic Times

25-04-2025

In a rare acknowledgement of India's strategic importance, Reckitt Benckiser Group Plc's global chief executive officer Kris Licht said the country stands out as a growth driver even as global economies remain vulnerable to potential shocks."As we sit here, we fully expect sustained strong volume growth in India and China as we go through this year," Licht told investors at Reckitt's March quarter earnings call late on Wednesday.
The £14.2-billion British consumer and healthcare company saw "some really strong volume growth in germ protection (Dettol) and intimate wellness (Durex condoms) spaces" in India".
This, Licht said, was powered by "simply strong organic performance". "Our businesses (in India) have very good momentum... We're scaling innovation. And we absolutely expect that to continue," said Licht, who took over the corner office at Reckitt in October 2023. India holds strategic importance for Reckitt, not only due to its large consumer base but also its alignment with public health goals. The company launched its 'Dettol Banega Swachh India' campaign in 2014 to support the government's Swachh Bharat Mission. Since then, Reckitt has leveraged this alignment with the government's campaigns to drive behaviour change to deepen its market penetration to smaller towns and rural areas with lower-priced packs of hygiene brands such as Dettol anti-germ soap and Lizol and Harpic disinfectant cleaners.
The company-which has had two Indian global chiefs in Rakesh Kapoor and later Laxman Narasimhan-has also extended each of these brands to premium variants to attract better-off urban consumers. Reckitt Benckiser's core like-for-like business grew 3.1% in net revenue in the January-March '25 quarter to touch £2.63 billion, driven by strong performance in emerging markets such as India and China. Sales in Europe and North America declined 1.7% and 0.9%, respectively, amid reduced consumer spending.Reckitt reported consolidated net revenue of £3.68 billion for the first quarter.In India, the company reported a turnover of Rs 9,336 crore in calendar 2024, up 5.4% on year, while profit jumped 22.6% to Rs 2,231 crore, as per RoC filings.Reckitt's Lizol, Harpic and Dettol compete aggressively with HUL's Domex disinfectant cleaner and Lifebuoy anti-germ soap. Both companies had also capitalised on pandemic-induced demand.
While Dettol leads the anti-germ protection soap category, Durex trails category leader Mankind Pharma's Manforce in terms of market share, industry executives said, citing NielsenIQ data. Reckitt's India portfolio also includes Mortein mosquito repellent, Moov pain relief cream, Veet hair remover, Air Wick air fresheners and Strepsils lozenges. In its recently released 2024 annual report, Reckitt said it is well placed in the world's most populated country that accounts for 8% of its core net revenue. "We sell through over one million outlets in India and have grown strongly over the past five years. Our manufacturing capability enables us to supply 95% of products locally, helped by the recent doubling of our direct customer coverage," it said.The annual report stated that Reckitt is "confident about growth opportunities in emerging markets such as India, Africa and Latin America, where changing social attitudes are helping to drive higher adoption rates."Collectively, emerging markets represent the largest single area in Reckitt's power brand portfolio, led by the high-growth markets of India and China, it said.Addressing an analyst query on high prices of palm oil, the most crucial ingredient in soaps, Licht said: "We're paying a lot of attention to it, but I don't think that that's going to keep us from being successful."
Recent months have seen palm oil prices surging on account of floods in high-producing countries such as Indonesia and Malaysia, resulting in soaps makers such as HUL, Reckitt and Godrej Consumer Products increasing prices.