AVA Group to foray into haircare, body care categories

Consumers today have a tendency to use a wide range of products and brands to meet their body care needs. In this context, we are also seeing a trend wherein brands are also increasing their product categories with an objective of making their body care basket of offerings, more comprehensive and variety-rich. The manufacturer AVA Group, the owner of Medimix, the popular herbal soap brand is eyeing other herbal-based beauty care segments, leveraging the brand’s popularity

AVA Group, the owner of the popular handmade herbal bathing soap bar brand, Medimix, is planning to diversify into the hair oil, shampoo and liquid soap segments. The Medimix soap bars, which is presently in the 50th year of its production, is the flagship product of the AVA Group. It enjoys a strong foothold in the South Indian market. Now, the company feels the time has arrived to leverage the ‘Medimix’ brand name in a few other herbal cosmetics segments. This was revealed by Dr. AV Anoop, Managing, AVA group of companies, in a recent news report by CNBC-TV18.

Though the company had started its diversification initiatives way back in the late 1990s, and already has its hand wash and face wash products in the market, it is still known largely for its handmade soap bars. Before that period, it was just a one-product company, selling only the ‘Medimix Classic’ soap. The immediate plan is to launch the Medimix Hair Oil, the Medimix Shampoo, and the Medimix Body Wash, and garner a significant market share in these segments, according to Dr. Anoop.

The upcoming products have already been developed by the AVA Group’s R&D division and are being readied for their market launch, according to the news report. The report also throws light on the reasons behind the Ava Group’s new diversification plans.

Spurred by the increasing competition

First of all, customers, who are regular users of soaps, are increasingly adopting the other options available like body washes, a segment that Medimix can easily relate to. There are other reasons which are to do with increasing competition in the market.

Here are some facts and figures to explain the competition angle. The Medimix handmade soap bars’ two variants – the 75-gram pack and the 125-gram pack, are priced as low as Rs 26 and Rs 40 respectively. Whereas, its hand wash product carries a maximum retail price of Rs.190 for a single unit. The company’s most expensive product is the five-litre hand wash that costs Rs. 700 for a pack. In this context, the company feels that it should start focusing more on products that ensure high sales volumes and better returns. The new report also quotes analysts who state that Medimix’s diversification plans made sense because the soap industry has stagnated and is also, on the downhill, especially because the market also offers a range of substitute products.

The AVA Group currently produces Medimix soap bars at six plants in South India, with each plant accounting for an average of around 100,000 bars per day. Each bar has the words ‘World’s largest selling hand-made soap’ written on its packaging.

The making of a brand

Launched in 1969, the Medimix handmade soap features a unique 18-herb Ayurvedic formulation, claims the company website. Over the years Medimix has become one of the most recognized and trusted brands of India. In a 2013 survey conducted by The Economic Times, it was voted 13th on the list of Personal Care brands and 56th on the list of ‘Most Trusted Brands of India’, the website states.

Medimix traces its roots to 1969 in the city of Chennai, when Dr VP Sidhan, a doctor with the Indian Railways, began to make soap to treat skin disorders among railway workers. Over the years, soap gained popularity, especially after it began to be prescribed by skin specialist doctors. Currently, the company is bifurcated into separate groups – the AVA Group, which takes care of distribution in the South, and is managed by Dr Sidhan’s son-in-law, Dr. AV Anoop; and Cholayil Private Limited, which is led by Dr Sidhan’s son, Pradeep Cholayil, and focuses on product distribution in North India. AVA Group is a diversified conglomerate with interests in Fast Moving Consumer Goods (FMCG), health care, real estate and entertainment.

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