At the end of the 1940s, almost Hojai village of Assam, a rice farmer searched in the dense jungles’oud‘- a precious perfume and a scented oil from the agarwood tree. Haji Ajmal Ali believed that if he could find enough oud he could start a business in the perfume industry and change his family’s fortunes.
In 1950, he took some oud and his meager savings of Rs 500, and left his homeland in northeastern India and reached Bombay. On reaching the commercial capital, he became a supplier of oud and agarwood, which he sourced from Assam.
But that was not enough. He wanted to be a perfumer and not just an intermediary. So in 1951 he started to mix different kinds of scent oils and created a line of perfumes. This completed Haji Ajmal Ali’s unlikely transformation from farmer to perfumer.
In the 1960s, he opened his first store and gave his family name to the product line. The mixture of perfumes itself also triggered the start of the Ajmal perfume Empire.
Haji Ajmal Ali’s fragrances have become so popular that his small family business has grown into a major perfumer with over 300 products in his portfolio, a presence in 36 cities in India and over 240 outlets around the world.
In 2011, it was reported that the company had a turnover of Rs 1,475 crore ($ 200 million). However, the company does not wish to disclose its current financial statements.
It claims that it is now present on 40 e-commerce sites and that it has grown into one of the largest single-brand perfume houses in India.
Abdulla Ajmal, third generation entrepreneur at Ajmal Perfume
In conversation with SMBShistory, Saurav Bhattacharya, President of Operations, Ajmal & Sons India NHA Division, explains how the company is exploiting the Indian perfume market.
Excerpts from the interview:
SMBShistory [SMBS]: What is your manufacturing goal in India?
Saurav Bhattacharya [SB]: Ajmal has Indian origins, but in 1976, Haji Ajmal Ali moved the company’s headquarters to Dubai, United Arab Emirates, and opened the first Ajmal outlet there.
But we have seen that the Indian perfume market is just starting to mature and Indian consumers are turning to fine fragrances from deodorants. In India, for example, we launched the New Horizons of Ajmal (NHA) division.
Our strategy was to set prices that matched what consumers wanted and that were effectively placed in the gaps. We have assembled a team of 190 people in our Mumbai NHA division.
SMBS: What is the USP of Ajmal products?
SB: Ajmal’s fragrances are designed, created, developed and manufactured in-house, and we are not afraid to break the mold to seek innovative solutions and reinvent our fragrances. Oud and Oud Oil are still our DNA.
Our R&D team continuously monitors scent trends around the world and develops an understanding of consumer behavior, product preferences and the competitive landscape across countries.
This helps us to know which fragrances customers prefer, and then we associate them with the history and vision of our brand.
SMBS: What is your pricing strategy?
SB: Ajmal identified consumer needs that existed but were not defined. Most importantly, the buying model is pyramid and is determined by price. Rs 4000 and more, this is where international fragrances come in.
Ajmal, being a local brand, aspires to offer international quality at an affordable price. To achieve this, we look at different price points in the range of Rs 1,000 to Rs 2,500.
Ajmal is able to achieve this because we are one of the only companies in India with an integrated value chain, from the sourcing of raw materials to the delivery of products to the end consumer.
Ajmal manufacturing unit in Dubai
SMBS: Who is your target audience?
SB: Active millennials between the ages of 25 and 40 are our target. These are consumers who want to look good and feel good, and to achieve both, smelling good is just as important. These are the people who want to stand out and accentuate their personality.
For them, perfume is a defined lifestyle category that shifts from planned purchases to impulse purchases. Therefore, being able to capture the market through the impulse buying range is crucial.
SMBS: What is your retail strategy?
SB: By channel, Ajmal has always worked on the COCO (Company Owned Company Operated) model, which meant that we had our own stores. But now we are aggressively working with a new mix of channels that includes modern commerce, e-commerce, distribution, wholesale, retail, licensing, institutions, OEMs, etc.
Regarding online, Ajmal has already entered the first 15 to 18 sites. The depth of penetration is the critical long-term factor, as 80-90% of sales come from the top five sites online. We aim to get the most out of eCommerce by preparing our website over the next 12 months once the beta has been tested.
The offline strategy is to methodically extend state by state. Ajmal wants to expand its footprints through wholesale outlets across the country. The most important factor being the proliferation of brand prices in department stores that are relatively high end. We have already established partnerships with some of them.
Partnering with brands and people through licensing, co-branding or private labels is an opportunity to be seized as it provides enormous coverage. We now want to price lower to make it adjacent to the FMCG industry.
SMBS: What were the challenges Ajmal faced?
SB: Our biggest challenge has been to educate growing and evolving customers on how to approach the broad topic of fine fragrances for their personal grooming.
We consciously strive to deliver content through various marketing channels that educate and empower consumers to understand fine fragrances.
SMBS: Who are the competitors? How does Ajmal stay ahead of them?
SB: Anyone who makes a scented product is our competitor, and that’s not necessarily limited to just scents. Even an incense maker is a competitor. However, if we only look at the perfume space, we are ahead because there is no one else walking all the way to the perfume farm.
Our areas of opportunity are broader in sourcing, manufacturing, filling, manufacturing and co-development for others.
But there are other prolific players when it comes to certain prices. For example, Rs 4,000 and more have a particular segment, as does Rs 2,500 to Rs 4,000. There are also unbranded, low brand, unknown and local perfume players in the price range between Rs 400 and Rs 1,000.
SMBS: What are the company’s future projects?
SB: We started with a limited number of outlets, but aim to reach 500 outlets by the end of March 2020 and also ambitiously aim to reach 2,000 outlets in the next two years.
We are now crossing the markets by increasing the depth and breadth. By breadth we mean that we want to expand our physical presence by increasing the number of outlets across geographies and locations.
(Edited by Javed Gaihlot)