Wipro Consumer Care’s latest acquisition of a South African personal care company highlights how it is increasingly using strategic acquisitions to expand in emerging markets.
The company announced the acquisition of Canway, a South African personal care company that offers a portfolio of different brands in this African nation.
This is the company's 12th acquisition in the last 16 years. With this, Wipro makes a strategic entry into the South African market. Through Clicks, a health and beauty retailer in South Africa, the firm markets brands such as Oh So Heavenly, Iwori and IQ exclusively. Clicks has around 700 stores in South Africa including 400 pharmacies.
Although the exact value of the deal was not revealed, Canway generates revenues of $21 million.
“The brands from Canway have a wide appeal among ethnic South Africans. Its brands also have appeal among many of the neighbouring countries of South Africa. We will keep looking for geographical expansion and of acquiring niche products and brands in emerging markets. Largely, our South East Asian footprint is done and we may look towards expansion in Eastern Europe and in the Middle East,” Raghav Swaminathan, Chief Financial Officer (CFO) of Wipro Enterprises said to THE WEEK.
“Of late we have been observing double digit growth in the overseas markets, though the Indian market was a little slow at 7 percent volume growth against our target of 14-15 percent in H1 of the financial year 2019-20. We expect better growth in H2 of this financial year,” Swaminathan said.
He further added that the last acquisition made by Wipro Consumer Care was of the Splash Corporation in the Philippines, which helped the company get increased revenues from its overseas business. Currently, the company's international business contributes around 54 percent of its revenues, with around 10,000+ people from 15 nationalities.
“This acquisition has given us a significant entry into South Africa and other African markets. This acquisition will help us in being among the top 3 players in the personal care segment in Asia and Africa. Interestingly, South Africa is the largest personal care market in Africa and the second-largest economy of the entire African continent,” remarked Vineet Agrawal, CEO of Wipro Consumer Care and Lighting.
Wipro Consumer Care and Lighting is a $1 billion business, involved with personal wash products, toiletries, personal care products, wellness products, electrical wire devices, domestic and commercial lighting and modular office furniture.
It has a strong brand presence across segments in India, South East Asia, the Middle East and Africa. It has 16 manufacturing units in China, India, Indonesia, Malaysia, Philippines and Vietnam and has R & D facilities in India and Malaysia. In India, its brand portfolio includes Santoor, Chandrika, Glucovita, North West and Wipro Smartlite. Its Enchanteur, Safi, Bio- essence and Romano brands are popular in ASEAN Countries.
Wipro Consumer care acquired the Yardley brand in 2009. In 2012, Yardley UK was also acquired, allowing them distribution rights in European markets. Yardley sells in over 40 countries today.