After three years of significant growth, GCPL to stabilise ad spends for some time

 Even as input costs remained elevated through the March quarter, Godrej Consumer Products Ltd. (GCPL) continued to prioritise advertising as a core driver of growth. The company’s marketing-led approach — centered on simplifying operations and building underdeveloped categories — has remained intact despite inflationary headwinds.

“We didn’t cut our investments in advertising and media despite oil price pressures,” said Sudhir Sitapati, Managing Director and CEO. “We decided to instead absorb the loss.”

The company has moved away from traditional media silos and now focuses purely on cost per reach — a metric that guides every media investment decision. “We are neutral between digital, linear TV, and connected TV. We look at how much they reach, what it costs to reach, and we run an optimisation to minimise cost per reach,” Sitapati explained. “We don’t have a belief in a channel strategy. We just have the lowest cost per reach channel.”

In rural areas, mobile phones have become the primary mode of communication for GCPL, thanks to deep penetration and high usage. For urban consumers, the company focuses on large-screen formats like linear TV and connected TV. Additionally, wall painting remains an important traditional advertising touchpoint in rural regions. 

While profitability was impacted by cost pressures during the quarter, GCPL views its sustained advertising investment as a long-term play. “It was a wise thing for us not to respond to a short-term hyperinflation. Because we are a profitable company, it is better for us to absorb these,” Sitapati added.

“We have increased our advertising significantly over the last three years. We may kind of remain at these levels for a little bit of time and take a breath,” said Sitapati. 

Looking ahead, the company remains focused on building future-facing categories and scaling them across markets. In mature regions like India and Indonesia, advertising remains central to the strategy, while in Africa, the focus continues to be on strengthening distribution.

“As a company, we are big believers in advertising. The FMCG model is essentially a model of high gross margins and high advertising,” Sitapati said.

GCPL has also moved to build internal capabilities. Its in-house creative agency has been tasked with growing newer segments like pet care and addressing category-level challenges. For example, in Andhra Pradesh, the company launched an awareness campaign against unregulated incense sticks, using licensed news coverage to inform consumers about potential health risks.

The Q4 numbers reflect the outcome of this strategy. India standalone sales grew 8% with a 4% increase in volume. In international markets, the Africa, USA, and Middle East segment posted 23% growth in INR terms and 12% in constant currency. Indonesia saw 1% sales growth with a 5% increase in volume, while Latin America and Others declined 11% in INR terms but grew 2% in constant currency. Overall, consolidated EBITDA grew 1% year-on-year.