The incense stick retail market, integral to many-a-household’s daily religious rituals, is worth about Rs 7,000 crore in India, growing at a CAGR of 15% year-on-year; in 2020, however, it remained stagnant.
The incense stick market has a range of players — from ITC’s Mangaldeep, the oldest Cycle Pure Agarbathi, and Zed Black to smaller regional players and now even Amazon’s Solimo. In a market that is dominated by dealers and retailers, and the products they opt to sell, how can agarbatti makers build brand loyalty?
“Agarbathies have a penetration of 82% in India; this is greater than even soaps,” claims Arjun Ranga, CEO, N Ranga Rao & Sons, the company that manufactures and markets Cycle Pure Agarbathi. The company’s incense stick business brings in a turnover of about Rs 1,000 crore annually. Ranga adds that innovating on fragrances, maintaining consistency in quality, and owning the distribution network has allowed the company to build a strong brand.
Given that this is a market that has an incredibly low entry barrier, there are several local unorganised players who produce the same product at a lower cost and pass on the benefits to the retailer. “The retailer is the king and controls the sale of products like incense sticks. These are typically ‘push’ products. Only 30% of consumers ask for and buy their preferred choice of incense sticks,” says Ankit Agrawal, director and partner, MDPH, the company that makes and markets Zed Black. Agrawal hopes to earn a turnover of Rs 800 crore by 2022.
Incense sticks are typically priced at Rs 10 for a pack of 14 sticks or Rs 50 for a pack of 80 sticks. “A household could spend Rs 100-120 on agarbathies in a month, if four sticks a day are consumed,” notes Ranga.
Incense stick makers like Zed Black try to incentivise retailers to push their products to the consumer. However, that alone is not enough to create brand recall; ergo, celebrity endorsements. Zed Black is endorsed by cricketer MS Dhoni, while actor Hrithik Roshan endorses its sub-brand Manthan. Cycle Pure Agarbathi is endorsed by both Saurav Ganguly and south Indian actor Ramesh Aravind. In the past, actor Amitabh Bachchan has endorsed the brand. The company also owns a Karnataka Premier League team called Mysuru Warriors. Hema Malini is the brand ambassador for Moksh Agarbatti, while Anupam Kher endorses HHM Pure, a brand of sambrani.
“Since the category is related to religion and spirituality, brands cannot do anything too quirky through advertising. Therefore, using a celebrity to achieve wide recognition and appeal is natural,” says Anchit Chauhan, director – strategy, Dentsu Webchutney.
With that, though, also comes the challenge of consumers associating the right brand with the right celebrity, say analysts. Companies are, therefore, adding more product categories like reed diffusers, fragrance pouches, premium incense sticks and incense cones. “At the core of it, there is hardly any product differentiation,” says Priti Nair, founder, Curry Nation. “Brands could talk about product attributes like ‘does not emit toxic fumes’, but spirituality still dominates the messaging.”
Phool, a brand that entered the market with the premise of repurposing discarded temple flowers to make incense sticks, has positioned itself as a lifestyle product instead of one meant for use in the prayer room. Targetting millennials, the brand advertises on platforms like Instagram.
Traditional companies consider such things to be a “marketing gimmick”. “About 2% of incense stick buyers use the product for non-religious purposes,” points out Ranga. However, most brands have hopped on to the ‘temple flower’ bandwagon. Both Cycle Pure Agarbathi and Zed Black now have sub-brands that use discarded temple flowers to make incense sticks.