Interconsumer steps up market rivalry with new products
Interconsumer Products CEO Paul Kinuthia. The firm is eying a low-pricing strategy in battle for bigger market. FILE
What you need to know:
Interconsumer Products' new plant in Nairobi to make new personal care items as it takes on global competitors.
Interconsumer Products is set to launch a fresh market share war with multinationals in the personal-care market, backed by its substantial war chest.
The firm is set to introduce several new brands, with its new plant starting production of the Golden Shine shoe polish brand and All-Tyme sanitary pads by the end of the year. It is also the producer of Bouncy diapers.
CEO Paul Kinuthia told the Business Daily the Sh1 billion plant along Nairobi’s Mombasa Road would soon start manufacturing new personal care products in addition to the brands it has previously imported from China.
“We plan to start manufacturing a number of new brands in the personal care market,” Mr Kinuthia said. “I cannot discuss the specific details of the new products because it means disclosing competitive information to global rivals.”
Some of the biggest players in the local personal care industry are Colgate-Palmolive, Beiersdorf, Johnson & Johnson, Procter & Gamble, Unilever, and Reckitt Benckiser. The multinationals produce or import a wide range of personal care products such as soaps, tooth paste, diapers, and lotions.
Mr Kinuthia shot to fame after growing his company to a multi-billion shilling venture in less than two decades, wresting a significant market share from multinationals through price wars.
He said Interconsumer would continue with its low-pricing strategy that saw it become one of the biggest players in the local beauty products market with brands such as Nice & Lovely that he recently sold to a rival.
Mr Kinuthia in April sold his health and beauty business for an estimated Sh1.5 billion to French cosmetics giant L’Oreal which rebranded the business to Interbeauty Products.
He retained the sanitary care business whose products are now being manufactured in the new factory, ending the previous model where they were imported from contract manufacturers in China.
“It is possible to offer more affordable products without compromising quality,” Mr Kinuthia said.
He said the move to manufacture locally would see him enjoy lower margins compared to importing from China which is a lower cost manufacturing location, adding that his decision to produce locally was primarily driven by a passion to create more jobs and increase access to basic products for the majority of lower income households.
Once fully operational, Interconsumer’s new operation is expected to hire 800 people across its management, production, marketing and supply chains.
It remains to be seen whether Mr Kinuthia will replicate the market share coup he executed in the beauty market with the flagship Nice & Lovely brand of shampoo.
The business he started in 1995 as a one-man operation managed to steadily grow his share of the cosmetics market to about 30 per cent as of last year.
Interconsumer sold cosmetics worth Sh1.7 billion last year, earning him more than Sh200 million in net profit before the spin-off in April. The multinational rivals he will be competing with have the advantage of owning established brands with significant market shares.
The conglomerates also have deep pockets that enable them to sustain marketing blitz that is key in retaining customer loyalty in the fast-moving consumer goods market.
Procter & Gamble, for instance, dominates the sanitary pads category through its Always brand that has a 62 per cent market share followed by Interconsumer’s All-Tyme that has seven per cent.
Mr Kinuthia reckons that the company’s main strategy is to reach more customers who have been locked out of modern consumer goods products through relatively higher pricing. He gave the example of diapers and sanitary pads that are mostly bought by rich and middle-class households.
