40 years and counting: Shalimar Incense continues spreading its fragrance in India and abroad

No religious, spiritual, or aromatherapy occasion is complete without incense—be it in the form of long sticks, cones, or dhoop cups. The incense adds to the calm and serene atmosphere, filling up the room with its varied fragrance, and no wonder they are in huge demand globally.

The incense market is a competitive one in India with many legacy brands, including Cycle Pure Agarbatti, Mangaldeep, HEM, Zed Black, and Phool, as well as unorganised players.

According to IMARC Group, the Indian incense (agarbatti) market is estimated to be around Rs 10,000 crore, expected to record a CAGR of 8% between 2024 and 2032.

One more contender in this market is the 40-year-old Bengaluru-headquartered Shalimar Incense Pvt Ltd, founded by Vinod Shah.

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In 1976, Shah branched out independently from his family-owned textile business to start Shalimar. In those starting years, Shah learnt the art and science of perfume making and the basics of the incense business. The company experimented with its products and took customers’ feedback to understand which performed well.

“For the first four to five years, we were running a loss-making operation, but became profitable only in 1982,” Alkesh Shah, a second-generation entrepreneur and Director of Shalimar Incense, tells SMBStory, in an interaction.

Today, Shalimar has come a long way, with a pan-India presence and sees Eastern India as one of its strongholds.

Focus on quality

According to Shah, the secret sauce to Shalimar’s thriving business is offering quality products at affordable prices. To keep up with the current trends, the company has constantly innovated with its products as the consumer preference has now expanded from floral to more perfume-like.

Shalimar has over 300 stock-keeping units (SKUs) in its portfolio, sold under various sub-brand names, including Shalimar Retra, Shalimar Shubhakti, and Shalimar Kamal. Its price points range from Rs 35 to over Rs 1,000, depending on the pack and quantity.

The company’s top-selling product is its four-in-one incense pack, which offers customers different fragrances at an affordable rate.

In this modern age, the use of incense has expanded beyond religious and spiritual purposes to aromatherapy, including people commonly using it for a nice aroma at home.

To offer more varied fragrances to accommodate the new needs of customers, the company included Oudh in its product line. In the Middle East, Shalimar’s Oudh brand is a popular product.

According to Shah, Shalimar has maintained its quality for 40 years by not compromising on its raw materials, which it collects from multiple places in India, and constantly experimenting with scents.

Strategy change

After witnessing steady growth since its inception, the company decided to shift gears on its business operations in 2017-18. Shalimar pivoted to retail outlets and set up its stock points and sales team, moving away from a wholesale network for sales.

It also expanded its production units from Karnataka to Bihar and Andhra Pradesh. Shah says, “We have seen extremely good growth since this change.”

He adds that Shalimar has consistently been growing at over 15% annually since the pivot and expects to maintain this trend in the future.

Shalimar Incense employs around 450 people, including in its production units and non-production functions. Its factories has 85% women employees and other functions have 65% women workers.

The incense business is challenging and quite complex. With a few entry barriers, it is easier for anyone to enter this segment. Further, the market is quite fragmented as customers’ preferences vary across regions. Shah says the fragrance a customer in Assam likes is different from that in Maharashtra.

“We have our ears to the ground always to understand what customers like, and their preferences keep changing,” he adds. The company has expanded its presence in the Middle East, North Africa, Europe and Southeast Asia markets. It generates about 20% of its revenues through exports.

Shalimar has an online presence on its website and ecommerce platforms like Flipkart, Amazon, and BigBasket, to name a few. Shah expects the revenue from online sales to become a significant part of Shalimar’s business.

As part of its future plans, Shalimar is planning to expand its reach into southern Indian states like Karnataka and Andhra Pradesh. It also aims to double the number of countries it exports from the present 20 to 40.

“If one is providing the right fragrance and has the correct distribution, then you will survive,” Shah says.