Why Value-Driven Products Matter in Today's Agarbathi Sector

In an exclusive interaction with Adlin Pertishya Jebaraj, correspondent of Homes India Magazine, Krishna TV, Vice President - AIAMA Partner, Amrutha Aromatics, highlights India’s fast-growing Agarbathi industry and the importance of value-driven, differentiated products in a competitive landscape.

He emphasizes that this shift from a manufacturing challenge to a priority of brand-building and innovation is the next frontier. Strong supply chains, habitual consumers, and extremely dense global demand provide tremendous opportunities for young entrepreneurs. 

Krishna TV is an experienced entrepreneur and a leading figure in the perfume and incense industry in India, following in the footsteps of two generations of family experience. With a mechanical engineering background and early career experience in research and development at Schneider Electric, he offers a wealth of technical insight to traditional manufacturing. 

How do you see the current market trend in the fragrance manufacturing industry in India and globally?

If we look at the Agarbathi industry, on an upward trajectory year-on-year, approximately 810 percent. Nevertheless, the luxury goods market is growing as well. The industry is now left with the task of concentrating on providing more value products to the consumers. 

The total scale of the Agarbathi industry is now about 10000 crore. The market situation varies globally, with some of the products, including Chinese and Taiwanese incense, particularly created to serve the locals. They have great consumption differences. In the case of India, we are at present exporting about 1200 crore.

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What are the major challenges that small-scale Agarbathi manufacturers are facing today? What strategies can you suggest to help overcome these challenges?

Our industry had traditionally faced difficulties in the manufacture of sufficient raw Agarbathi until approximately 10 years ago because it was primarily hand-rolled. The demand was never a major problem, as it was mainly a manufacturing problem, as demand was always higher than the supply. To solve this, the manufacturers undertook investments in the rural regions where more people were involved and upskilled in Agarbathi rolling.

But when the older generation had left this hand-rolling segment, a void was created. In the past, production was required to be matched, but the problem was overcome by mechanization, which led to a significant increase in the production capacity-which created in fact a surplus. At this moment, the most important challenge is the sales and competition in the market. The manufacturers are competing on the same retail platform and thus there is pressure on the margins with the intense competition.

Companies should therefore strive to add value, that is, design and market quality and superior products. Consumers exist; it is upon us as a business to inform them of superior better differentiated products at a marginally increased cost. Even the highest quality Agarbathi, e.g. 10 sticks at Rs 100, equates to approximately Rs 20 puja, which is very affordable when compared to the price of flowers of even a cup of coffee. The quality and value message must be brought forth. By doing so, the industry has a high growth prospect in the future.

Can you discuss the importance of building a strong brand identity and differentiating your product in a competitive market?

In the modern retailing world, the creation of a recognizable brand is a necessity. When you go to a supermarket or a retail chain, the first thing that they ask is about brand visibility. it can be difficult to create a brand without visibility, and difficult to create visibility without a brand.

Due to the emergence of digital and social media marketing, there are now low-cost and quantifiable methods of reaching your audience. The investment in brand-building will be vital, and without it, it is extremely hard to compete on a level higher than hyper-local.

In case a company wants to become a national or international player, now is the moment to invest into a brand image and narrate a story - who we are, what we stand, and why we do what we do. Today, successful new brands have developed quickly in sharing their story successfully using social platforms.

The other option is to give retailers an in-depth price reduction, but it cannot be sustained in the long term. Brand building is the only way an organization can build a strong brand that consumers request by name, which is ultimately what makes profitability and longevity.

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How do you manage supply chain and production challenges as the industry grows?

We have established Agarbathi industry and effective supply chain in India. The nation is well-established in terms of the number of manufacturers of necessary oil and aroma molecules and most of them are IFRA-compliant and manufacture safe and high quality ingredients.

Bamboo and jigat are raw materials that are naturally available in India. India is highly positioned compared to other perfumers in other countries who have difficulties accessing ingredients. The trick is to streamline operations, form solid relationships and have trust in the supply chain.

What advice would you give to young manufacturers today? And what is your future vision for the Agarbathi manufacturing industry in terms of innovation, technology, and equipment?

The young generation sometimes thinks that it is not a cool business to enter, they like tech companies or startups. However, the fact of the matter is that this is a highly creative and artistic industry.

It’s a form of expression that your creation finds its way to every home, and it brings sanity and joy. You can light an Agarbathi at a very low cost of Rs 2 and change the mood of your house. In the contemporary workaholic society, which is full of stress and anxiety, fragrance is essential to emotional health.

One of the most ancient human senses is the sense of smell it directly relates to emotion. A nice smell is something that soothes the mind and raises the spirits. Our products are part of rituals in the lives of people and with its help, we support their mental and emotional well-being.

Though this industry may appear to be a mere trick, behind all the sticks, there is the work of crafting, years of growing natural ingredients, and the exact formula. It has unlimited potential for creativity - from perfume design to marketing and brand narration. This industry has enormous potential for young entrepreneurs who wish to work in meaningful, creative and impactful work.