Vikash Kumar envisioned Hilt Brands three years ago. The IIT-ian with 10 year experience in investment banking did an extensive background research and planning to start a venture of his own.
Hilt Brands is a consumer healthcare products company with a portfolio of brands targeting the global markets. A few months into the launch, the brand is going great guns already. Hilt Brands has raised usd 100,000 in seed funding as of now.
A report from Mordor Intelligence pegs total OTC healthcare market at USD 303 billion in 2018, growing at CAGR of 8.5% to USD 491 billion by 2024.
It goes without saying, the healthcare market is a windfall for the right brand.
The Passage spoke with Vikash Kumar to delve into the company’s long term vision, positioning, omni-channel strategy and the potential market in India.
The Passage: What’s your plan for India?
Vikash Kumar: In the US, 90% people prefer self-medication before visiting a doctor. A good percentage of patients prefer self-medication in India as well. So that's the segment we are targeting. The space is populated by big pharma companies such as Pfizer, Cipla etc. All of them have a significant investment portfolio. We want to disrupt the market with new ways of marketing, technologies etc.
The Passage: What motivated you to start Hilt Brands?
Vikash Kumar: One of our products was the main driver. We are launching a vapour patch - first of its kind in India – this year. It helps open up the nasal passages by putting a patch on the collar of your shirt. We came up with the idea for Hilt Brands around three years ago. The cough and cold segment is largely populated by Vicks. We saw the opportunity and decided to enter the segment.
The Passage: Who is developing the product?
Vikash Kumar: Our manufacturing is outsourced. We have a panel of doctors who do the formulation of the product. Once we have the formulation ready, we work with the vendor to come out with different variants before we test the product. In sum, we have two levels - one is the panel of doctors and second is the R&D and product sampling with the vendor to come up with the best possible product. Then it goes to the government for approval.
The Passage: Tell us about the opportunity in the segment
Vikash Kumar: Cough and cold per se is about 4,000 crore rupees market. Out of that, Vicks’ share is about 25%. There is a big gap between the largest player and the second largest. So, we want to disrupt the market with a premium product and gain a foothold in urban and metro cities. We are targeting a market share of 10% over the next four to five years.
In Indian OTC market, vitamins are the largest category followed by gastro and cough and cold. But when you look at brands in India, Vicks is the largest brand in OTC space with about USD 150 million in sales. Eno comes next with USD 50 million sales. Large brands have significant share in OTC market.
We are launching five products. One is the vapor rub which is in tube form rather than a jar form for hygienic reasons. Second is the vapour patch. Third is the saline nasal spray. Fourth is Bibo shots for sore cold. Fifth is the cough syrup.
The Passage: How do you view the regulations coming up on OTC segment?
Vikash Kumar: As of now, all our products are Ayurvedic. The government came up with OTC draft policy a year back. Once the government enacts them, we will launch pharma OTCs.
Basically, what the government is saying is that the low potency medicines can be OTC. For egs, paracetamol over 500 mg will be OTC and 650 mg will be RX. We are not sure when the policy will come into force.
The Passage: Is OTC segment investment-heavy?
Vikash Kumar: Not really. There is no capital investment per se. The money goes more towards brand creation, distribution, sales etc
The Passage: What’s you strategy to stand out in this crowded market?
Vikash Kumar: First is the product - our brand has to be the best in the market. Our main intent is to make the best product.
The next priority is to get someone to use the product for the first time. Our major competition is P&G and rest are local players. There is no brand which engages with their customers frequently. So we will engage with the audience in multiple ways through social media, different ways of marketing, and also run a lot of campaigns.
For example, we will offer free consultation to reach out to customers.
The Passage: What is stopping big companies from launching products like yours?
Vikash Kumar: The market is growing fast. Two to three new brands of cough syrups have come in since last year. We are spending about twice as the rest of the players to bring out the best product. We use high quality ingredients. I believe other brands don’t have the same strong intent we have.
And for agencies, the reaction time is a bit longer. So typically, if they want to plan something new, it will take time for them to implement. We can implement fast.
Nowadays, both the married couples are working. Most of them converse in a new kind of language and are active on social media. That's why we can't have the same old TV channel ads to communicate with the audience. So that’s where we create a difference.
The Passage: Why have you positioned the brand in premium segment?
Vikash Kumar: Premium segment is more concentrated towards Metro cities or tier 2. If you aim at the lower end segment, the target market becomes big - too big for us to focus on. Secondly, a lot of our marketing strategies revolve around digital and social media that naturally lends itself to the premium segment.
The Passage: What do you think about the influx of new consumer brands coming to India? How do you plan to capture the market?
Vikash Kumar: India doesn’t have a lot of options. In each segment, there are hardly two or three brands.
Our ground strategy is to have a speedy launch. We are asset-light and outsource production. We can implement fast and reach out to consumers through social media and acquire a decent user base. We will have a family of brands for each segment.
So, currently we are only talking about Bibo. That's our first and flagship brand. Once we succeed with Bibo, then we will think of launching other brands.
Bibo is the OTC brand for respiratory problems. Our products are safe across cases. Our target group is the working population in metro cities.
India doesn't have a single brand in OTC which covers the entire range in respiratory syndrome like us. We are kind of first brand which gives the entire offering.
Our vision is to become synonymous with cough and cold.
The opportunity the segment offers is immense. As much as 93% adults in US prefer to treat minor ailments with OTC and 85% parents use OTC for kids.
We want to create campaigns across apartments, schools, hospitals to get the word out.