Cipla Health Limited, the maker of Nicotex and Prolyte ORS, surpassed the Rs 1000 crore revenue mark last year, achieving a tenfold growth over the past seven years with a Compound Annual Growth Rate (CAGR) of 30 percent. The consumer healthcare subsidiary of Cipla is now planning to expand into multiple segments such as sexual wellness and broaden range of products in its existing categories.
Shivam Puri, Chief Executive Officer of Cipla Health, spoke with Storyboard18 about the company’s revenue growth and expansion plans. He also discussed the company’s advertising and marketing strategies.
Talking about the revenue growth, Puri said, “We crossed Rs 1000 crores revenue mark last year as a business. We have grown by almost 10 times on revenue in 7 years and that’s a phenomenal growth by 30 percent plus CAGR.”
Puri further said, “It has been a mix of both organic and inorganic growth, we have been buying brands and also been building brands in house. Going forward we intend to maintain that pace, there is no reason for our excitement and expectation from this business to come down.”
In terms of expansion plans, Puri said, “We are exploring newer categories, for example Intimate Care. For Feminine Care, we did not have a brand, so we launched MamaXpert, which caters to pregnant women. Today, we are pretty much playing across the spectrum, which is why we are actually considering ourselves as a fast-moving wellness goods company. We are neither FMCG nor OTC but fast-moving wellness goods concept company, selling skin and hair care products, smoking cessation aids, anti-cough and cold products, weight gain products, etc.”
Puri mentioned, “Sexual wellness is another category we are exploring. Our idea is to create products and solutions in our existing categories. For example, in gut health, we already have an ORS product and are exploring further developments within this category.”
ORS Gains Major Traction
During Prime Minister Narendra Modi’s oath-taking ceremony on June 9, internet was flooded with pictures of eminent personalities Shah Rukh Khan and Mukesh Ambani sipping tetra packs of Cipla Health’s ORS. VIP and VVIP guests were served ORS to hydrate themselves during oath taking ceremony amid scorching heat. Today, Cipla Health’s Prolyte ORS is one of the largest player in the ORS as a category.
According to an Emergence Research Report, the global ORS market was valued at $69.40 million in 2022. The Asia Pacific region contributed 33.3 percent of the global revenue and is expected to grow at a CAGR of 3.62 percent.
Puri noted, “In India, the ORS drinks market is worth Rs 800-1000 crore. We are the largest player in the tetra pack segment. Multiple players in this space help grow the category, and selling WHO-approved ORS products benefits consumers. There is a large number of consumers to convince to drink ORS as a healthy beverage. It’s a small market from one perspective, but compared to the overall beverage market, it’s substantial.”
When asked if Cipla Health is now competing in the beverages market, “Puri said, “Yes, absolutely. That fits us perfectly in this category because we are selling a very authentic product and we have a strong reason to believe in the product, we are competing in the beverages category where we can convince consumers to drink WHO approved, low sugar and high electrolyte drink with intake of just 11 calories.”
According to a Research and Markets report, the non-alcoholic beverages market in India is valued at Rs 1,376.70 billion in FY23 and is expected to reach Rs 1,986.31 billion by FY28, expanding at a CAGR of 7.29 percent during FY24-FY28.
Cipla Health collaborated with multiple Q-commerce and food delivery platforms, elaborating on the growth in sales via these platforms, Puri said, “With the growth of Q-commerce platforms, we decided to sell our products in multiple flavors. We have received a great response for ORS, and consumers are willing to pay a premium for the services offered by these platforms. We have restrictions on listing products with Q-commerce platforms containing drugs, which are sold Over The Counter (OTC).”
Cipla Health acquired multiple products such as Endura Mass and recently acquired the cosmetics and personal care distribution and marketing business of Ivia Beaute Pvt Ltd, including brands like Astaberry, Ikin, and Bhimsaini. According to Puri, these brands are growing well under Cipla Health’s umbrella.
Advertising and Marketing
Cipla Health Limited’s core brands include Nicotex, Cofsils, Prolyte, Omnigel, and Cipladine. Nicotex, a flagship brand, holds a 90 percent market share in the smoking cessation category in India.
When asked about the bifurcate of ad spends, Puri said, “It’s actually 60-40 percent, around 60-65 percent on television and around 40 odd percent on digital. It keeps changing depending on the format. For Nicotex, there are a few variants such as lozenges which is very heavily digitally focused. But our brand Nicotex gums is very heavily offline media focused.”
“Our media spends depends on the consumer base and reach that we are looking for. For a brand like MamaExpert, it is 100 percent digital. So, there are brands which are, for example, Rivela skin care being our premium product we do 100 percent digital, we are doing zero offline activities. So it depends on where the consumers are and what is the best way to reach out to them, we decide on which is the best vehicle to deliver.” Puri explained.
Puri also mentioned that Cipla Health Limited is currently not exploring to invest in high ticketing IPs for advertising.