Pradeep Cholayil, managing director, Cholayil Pvt. Ltd., the company that owns the marketing rights for brand Medimix for non-southern and outside-India markets, discusses the company’s growth strategies

MADHUMITA PRABHAKAR

Medimix is arguably South India’s most well-known ayurvedic soap brand. The Chennai-based Cholayil group launched the soap in the late 1960s and the product made tremendous progress in Southern India becoming the market leader (in the ayurvedic soap category) in the region. In 2007, there was split in the family and the Cholayil group was split into two entities – AVA Cholayil Health Care, managed by AV Anoop, that got the marketing rights for Medimix for the southern markets and Cholayil Pvt. Ltd, spearheaded by Pradeep Cholayil, the son of the founder of Cholayil group, that got the rights for rest of India and export markets.

Over the last five years, Pradeep has focused on implementing several strategies for growth. In August last year, he expanded the Medimix product portfolio by launching a face wash and plans to launch a shower gel and hand wash soon. The company also worked consciously on appointing distributors for the rest of India and global markets and set up sales and distribution channels in the 25 countries it sells in. In 2011, the company acquired another soap brand, Krishna Thulasi, from Kerala-based Krishna Herbals, to take on Medimix in the southern markets. Cholayil also holds the India marketing rights for Cuticura, a talcum powder and deo brand that sells well in southern India. Going forward, the company plans to raise Rs. 100 crore in funding, primarily to market these brands.

Brand legacy

Tracing back the journey of the legendary ayurvedic brand, Pradeep explains that entering this business was an option that was always within the reach of his family as his forefathers were renowned ayurvedic physicians in Kerala. In the 1960s, when his father, an allopathic doctor at the Indian Railways, found several patients coming to him with skin related ailments, he took it upon himself to turn to his roots and produce ayurvedic soaps which held a potential cure for this recurring problem. However, due to financial limitations, he was constrained to producing the soaps at the backyard of his house. “In those days, the only contender in the ayurvedic soap market was Chandrika. However, since he had a good understanding of his customers and the media, he was willing to stand up against such an established brand,” says Pradeep. And thus was born Medimix.

I don’t believe Ayurveda is a South Indian phenomenon. In fact, it is more popular in rest of India than down South. Only in the western markets have our competitors gained considerable traction. To tackle this, in the coming years, we will be focusing on extending our brand portfolio, especially to the Gen-Y segment.

In the initial phase, Dr. V.S. Sidhan, Pradeep’s father and founder of Cholayil, relied solely on his fellow medical practitioners to recommend and market Medimix to his customers. In fact, in the early days, the soap was sold in pharmacies in South India. It was three years later that the company began advertising formally and resorted to radio commercials and banners to create mileage for Medimix. Today, more than four decades later, approximately 5,600 tones of Medimix soaps are sold in the country.

Pradeep joined the Cholayil stable in 1983 and held various positions within the company, before becoming its MD. In 2007, following the split of the company, Pradeep was confronted with several challenges in building the Cholayil brand in the rest of India, which was a relatively new region for the brand. “Though we had a significant presence in Maharashtra, it was only in 1998 that we slowly began creating in-roads in the rest of India. However, it was still a small business when compared to our volumes in the south. When I took over this region, we were faced with a lot of financial challenges and the cost of marketing was also quite high when compared to the south,” says Pradeep.

For instance, in the south, while advertising is limited to the four regional language channels, in the rest of India, not only are the number of regional channels more, but, the cost of promotion in each of these is also considerably expensive, states Pradeep.  On the operational front, the primary challenge Cholayil faced was at its Greenfield factory at Haridwar in Uttrakhand, which had a lot of teething problems and took nearly a year to settle down. “There were tons of wastage happening in the factory and because the pressure to settle was high, almost all head of departments and managers resigned when the split happened and I had to recruit new people into the organisation,” says Pradeep. The company was also faced with a constraint of operating with a smaller sales force in a larger market.

Looking back at the turbulent phase, Pradeep states that such challenges offer immense scope to learn to survive in a competitive market. “In a scenario like this, day-after-day, we will be confronted with more challenges and what is required of us is the patience to sit back and think how best it can be addressed. At times, even a well-thought out decision may backfire, but it should still be taken as a lesson and a stepping stone to success,” he adds.

When asked how ayurveda is being received in the rest of India market, Pradeep says, “I don’t believe ayurveda is a south Indian phenomenon. If you take the example of established ayurvedic brands in India, such as Himalaya, they are not from the south. At the same time, ayurvedic soap is an unknown extension in these markets. Only in the western market has our competitor, Chandrika, gained considerable traction, especially in Maharashtra and Gujarat.”

Eyeing the future

As mentioned before, in the coming years, the key growth drivers for Cholayil, in the rest of India markets, lie in creating new product categories. “Last year, we launched Medimix facewash, which was received very well during the initial stages. Taking that as a cue, we are planning to expand into newer segments such as deodorants, hand-wash and shower gels, to reach our products especially to the Gen-Y audience,” shares Pradeep.

Lastly, in the next five years, Cholayil is planning to expand its product reach through a more channelised and extensive manpower network. The company is in talks to increase its distributor reach from seven lakh to eight lakh outlets, with a specific focus on Tier-II and Tier-III regions. “The width of distribution is one of the most important aspects of any brand’s success. The more the availability, more the demand from consumers. If we spend a large amount of money in advertising the products and if they are not available at stores when customers ask for it, the whole purpose gets defeated,” states Pradeep.

Despite facing the odds of heavy globalisation and changing consumer preferences in the personal care industry, Cholayil has retained its core vision of serving its customers the best benefits of ayurveda, and, is witnessing significant demand as it expands into newer markets and product categories.

Snapshot

Cholayil Pvt. Ltd.

Year: 2007 (after the split)

Founder and Managing Director: Pradeep Cholayil

State: Chennai

Product Portfolio: Medimix soap and facewash, Cuticura power and deo, Krishna Thulasi soap

What Next

• Raise Rs. 100 crore for promoting and distributing Medimix and other brands extensively
• Product extension into shower gels, hand-wash and deodorants to cater to gen-Y
• Increase distribution outlets from seven lakh to eight lakh with a specific focus on Tier-II and Tier-III regions