Aug 1, 2008

Business - Cosmetic giants run into a Himalayan Challenge

A dozen women are busy plucking seabuckthorn berries in Leh-Ladakh and Kargil for supplying them to their local Nundum Cooperative Society (NCS). The society will further their produce to All-India Aromatic Plants Growers Association (AIAPGA).By supplying such special fruits with medicinal values, these women will earn Rs 85-90 per kg, higher than what they were getting earlier. “Our members have started earning more than 50% by growing such plants,” says Mohammed Zaffar, president, NCS, which has 40 members. And the buck doesn’t stop here. In fact, it starts from here. In a way, the hill people of India are coming together to take on foreign FMCG biggies such as Amway, K-Link, DXN and Tenzxi, who have been dominating the Indian cosmetics market, by launching a slew of herbal cosmetic products. The 6,000-member-strong AIAPGA, including herbal society, will launch herbal products under its common brand across the country by next week through self-marketing. And it is confident of outdoing the foreign competition. “We will break them completely. Our prices are quite nominal than these biggies and high in quality,” says AIAPGA president and Kangra Herb Society director Randhir Singh Guleria. The growers are expected to get more than 40% margins on their produce once the mechanism falls in place. The association has got patent approval for launching 35 products initially, and a few more will join after approval. What’s more, the Rs 300-crore industry is confident of touching the Rs 1,000-crore mark in the next five years with their in-house business model. Until now, the Indian consumer didn’t have the right choice of organised herbal-care products. “This will wipe out the existing cosmetic players and create a new market for us,” says Mr Guleria. Right from planting till the packaging, branding and marketing of the final product, the association has strategically built an in-house model for its members. This model will be more cost-effective than the one followed by foreign biggies, they claim. Interestingly, the growers will get returns as per their subscription period with the association. That means the longer the period, the higher the margins. “Our 40-hectare land was a complete wastage as we didn’t know how to utilise it. Now, we have decided to supply medicinal plants for two years,” says Dharamshala-based grower Manish Mahajan. A large number of growers come from regions like Leh, Kargil, Himachal Pradesh, Uttarakhand and areas covered under the Himalayan range.

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