Overview

Herbion, established in 1983, initially focused on exporting its nutraceutical and

pharmaceutical products to the CIS region, including Russia, Uzbekistan, Albania,
Georgia, Kyrgyzstan, etc. This export-driven strategy was highly profitable due to lower
labor costs in Pakistan and the high returns from selling in foreign currencies. Despite
the success, Herbion realized by the early 2000s that its local presence in Pakistan was
minimal, and most locals, including professionals like pharmacists, were unaware of the
brand and its offerings.

Challenges and Strategic Shift

The primary challenge was building local brand awareness and understanding consumer
behavior in Pakistan, despite being a major player internationally. In response, Herbion
began to diversify its product range domestically, introducing syrups, supplements, and
moving into food supplement categories. The company emphasized the benefits of
herbal remedies over chemical alternatives, highlighting the lack of side effects and a
more gradual, but safer, improvement in health.

Expansion and Local Engagement

From 2015, Herbion expanded further into personal care and cosmetics, including
launching baby care products. This expansion was guided by consumer behavior
analysis, market dynamics, and an awareness campaign to educate the local market
about the benefits of herbal and organic products. The company operates five
manufacturing plants in Pakistan, ensuring most of its products are locally produced,
with minimal third-party procurement from countries like India.

Marketing and Awareness Strategies

Herbion’s approach to raising local awareness involved differentiating from

homeopathic remedies by emphasizing its herbal essence and leveraging social media
to boost organic product recognition. The opening of a flagship store in a high footfall
area was a strategic move to increase brand recall, engage directly with consumers, and
showcase the wide range of over 600 SKUs the company offers globally. This physical
presence aimed to solidify Herbion's standing in the local market, alongside its
continued success abroad.

Innovations and Market Positioning

The company also innovated by introducing products to compete with popular local
brands, like launching "Gastril" as an alternative to Hajmola and "Summer Rask" as a
competitor to Rooh Afza during Ramadan, using these products not as primary revenue
drivers but as tools to increase overall brand recognition and to introduce consumers to
their broader product range.

In this second part of the Herbion interview transcript, the focus shifts towards
leveraging the "Made in Pakistan" narrative amidst a growing preference for local
brands over multinationals, expanding distribution through modern trade channels like
Daraz, and tackling challenges related to product development and market expansion.

Key Points and Analysis:

Leveraging "Made in Pakistan"

Herbion capitalized on a nationalistic sentiment, emphasizing its local manufacturing as

a competitive advantage. This approach resonated well with consumers, particularly
during a time when protests against multinationals highlighted a preference for
domestic products. This strategy not only helped Herbion to differentiate itself but also
to foster a strong community on social media, where positive reviews and customer
insights became a powerful tool for brand reinforcement.

Product Development Challenges

One of the latest challenges faced by Herbion is related to the intense fragrance of its
natural products, such as shampoos. Being an herbal company, they refrain from using
chemicals to mitigate strong odors, which has been identified as an area needing
improvement to better compete in the market.

Strategic Market Expansion

The interview discusses significant sales growth in 2021, attributing success to offering
one-stop solutions for consumers, including diverse products like dog shampoos and
pet foods. Herbion’s strategic focus on brand awareness continues to drive expansion,
with notable efforts in the calcium supplements market, contributing to substantial
sales. This expansion reflects Herbion’s ability to understand and cater to diverse
consumer needs, distinguishing itself from competitors by not only focusing on profits
but also on serving the Pakistani market with a sense of patriotism.

Digital Marketing and E-Commerce

Herbion has developed a comprehensive digital marketing strategy, leveraging their
website and collaborating with platforms like Daraz to increase their online presence.
Their approach encompasses a wide range of activities, from influencer marketing to
collaborations with food and lifestyle channels to promote their products. This holistic
digital strategy aims to cover all bases, ensuring that Herbion remains top of mind
among its target demographics.

Targeting Diverse Customer Segments

The company targets three key customer profiles across different product lines: young
individuals interested in personal care, middle-aged people focused on supplements for
health maintenance, and older adults recommended by doctors to use Herbion
products. This targeted approach allows Herbion to effectively cater to the specific
needs and preferences of each segment.

Decision on Physical Store vs. Kiosk

Herbion chose to open a flagship store rather than spreading out through kiosks in
various malls, a decision influenced by the nature of their products and the need to
maintain brand value. The flagship store serves as a central point for customer
interaction and product display, reflecting the company’s commitment to quality and
accessibility.

Competition and Market Position

Herbion identifies its main competitors as traditional herbal companies like Hamdard
and Qarshi, which have not significantly diversified their product ranges. Herbion’s
strategy to expand its product line and emphasize herbal ingredients sets it apart in the
market, allowing it to compete not only with traditional herbal companies but also with
modern skincare and health brands.