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Nepal Herbs
Trying for Nepali Brands
of Cosmetics
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Viswa Karan Jain, Director, Nepal Herbs Industries |
Nepal has a market of more than Rs.5 million for cosmetics per day, according to a "back of an envelope" calculation. This is a growing market due to the rapid change in the lifestyle of the Nepali people. However, over 90% of this demand is being met through imports. So why can't Nepali brands of cosmetics be developed to benefit from this market?
Some entrepreneurs thinking over the same question ventured into this field, but they are yet to make their presence felt. Among around 20 firms manufacturing cosmetics in Nepal , none other than Nepal Lever (now Unilever) and Dabur have any significant market share and they are both MNCs. However, a more recent entrant into this business is going about it in a more calculated manner and it may be interesting to see what strategies this firm is following for this purpose.
Nepal Herbs, a proprietary firm started only two years ago at Birganj as a medicine manufacturer foraying into the field with a herbal balm product, is now planning to divide its business into two lines-medicines and cosmetics, both based on herbal extracts, according to Viswa Karan Jain (35), its proprietor.
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Sparsh |
The firm started serious marketing for its balm brand "Sparsh" Herbal just recently and has two brands - a Vas jelly (a product to relieve chapped lips) and Deep Rub (a massage cream)-just developed. In addition to these, the firm also produces and exports red tooth powder under technical collaboration with Hamdard, an Indian Trust that follows Unani medical system and is specialised in medical and personal care products based on herbs.
Additional products are in the pipeline, informs Jain.
Under the medicine line, the new products planned are going to be liquid-based formulations, specifically liver tonic, brain tonic and tonics for women. Jain wants to initially concentrate on the "over-the-counter" (OTC) medicines as the competition in prescription medicines is very intense.
However, the cosmetic segment is going to be more challenging, as no other Nepali brand has been successful in presenting itself as a strong player in the market. But Jain is unperturbed. 'About a decade and half ago everyone would sneer at medicines made in Nepal , but now nearly 30% of the medicine market is controlled by Nepali products. Why cannot we do the same in cosmetics as well? We are taking on this challenge,' he says.
Jain's confidence is clearly based on his association with Hamdard, a major player in India 's herbal based personal care and medicines market.
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Hamadard's brands(above): Jain's affiliation with Hsamdard as its distributor, encouraged him to start his own medicines and cosmetics brands. |
His association with Hamdard started about eight years ago when one of his friends recommended Jain's name to the Indian trust when it was searching for a distributor to handle Hamdard's marketing in Nepal .
Before Jain was appointed the dealer, the total annual sales of Hamdard products in Nepal used to be around Rs. one or 1.5 million rupees only. Now it stands at over Rs. 25 million. The growth rate is impressive, he says, though he does not like to reveal the exact figures. The sales would grow even faster if there were enough practitioners of Unani medicines, he says.
Dropping hints about the strategies he intends to follow in his own manufacturing firm, Jain says that he will convert the firm into a limited liability company and distributors, popular beauticians and physicians will be made up to 49% equity holders in the company. These people will be important because they will give valuable market information to the company.
Though Nepal is well known abroad for its exotic herbs, there are very few companies using them to produce finished cosmetics or medicinal products due to the lack of sufficient processing facilities within the country. This, however, gives a good prospect for backward linkages in this sector and for developing Nepal 's image as a country of herbal products. Even though the ingredients used in the medicines and cosmetics may be imported initially, people abroad will accept such products as it would not be so difficult to persuade them to believe that these products are made from exotic Himalayan herbs.
But there is one important hitch in Jain's plan. The country has no law to regulate the cosmetics business, though the medicines business is somehow regulated. So his suggestion is to have a law promulgated for this business as soon as possible. At the same time, efforts should be made to portray Nepal as a country that not only grows medicinal herbs but also produces herbal medicines and cosmetics.
This feature on SME has been sponsored by Siddhartha Bank Ltd.
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