DHOOP STICK MAKING BUSINESS

Overview

The industry with almost no entry barriers, offering a widespread employment opportunity to the rural population, requiring a very minimal investment still holds a market size as large as ₹3000+ crores in India.

This is the Indian Incense and dhoop stick market we are talking about. A dhoop stick / incense stick is a stick when burnt emits a fragrance and a mild smoke which is likely to air the room with a rejuvenating odour.

India is the world’s largest incense and dhoop stick producer and also well known for it because of the authenticity it is produced with which has led India to export dhoop sticks worth $498.02 million in FY 2011-2012

And factually, that was long ago so to imagine the revenue this industry brings now is immense. Giving you more than just reasons to enter into this industry

   I.        Market potential and uses

Because of India’s capability to produce dhoop sticks using e labour intensive techniques, competitive prices in different shapes and fragrances ranging from lavender, sandalwood to rose and and lilies etc.

The market potential for dhoop sticks smells like an opportunity because it brings in not only the Indian consumer demand but also larger global demand since the production in countries like USA is only limited to unscented or raw dhoop sticks.

Uses :

Though the uses of dhoop sticks are slightly limited they are required in every Indian household:

·       It is used as an ingredient or ritual in religious activities at holy places

·       It is used for aromatherapy in spas, massage centres etc

·       It is used in Ayurvedic and meditation centres, retreat centres as a part of healing processes

·       It is used in many therapy clinics so as to ensure a comfortable and open space which comes from its fragrance

·       It is used as a supplement to air fresheners, perfumes or scented candles

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II.        License required

The licenses required to set up a dhoop stick making business are:

·       Factory license

·       NOC by the state pollution control board

·       Udyog Aadhaar under MSME registration

·       SSI registration

·       GST registration

·       PAN, Aadhar card and bank details

III.        Investment required

Investment required to set up a dhoop stick making business would be between ₹200000-₹300000

IV.            Profits made

The profits made from a dhoop stick making business would be ₹60000 per month

V.        Target consumers

The consumers for the dhoop stick/incense sticks make use of them for different end purposes so accordingly the target market for the dhoop stick market is as follows :

·       Religious places : Many religious and holy places make use of dhoop sticks of mostly sandalwood fragrance as a part of their respective rituals

·       Meditational and retreat centres : Your dhoop stick making business can also cater its product to the Ayurvedic and meditational centres who make use of them as a part of a healing process for individuals

·       Spas and massage centres : Dhoop stick manufactured by you is also be used by spas and massage centres as a part of aromatherapy and to lighten the mood

·       Among elders and old aged population : The dhoop sticks made can also be targeted among the elders and old aged people who have a busy schedule and are life prone to a stressful life. Dhoop sticks are used for curing headaches, soothing the mood etc

·       Resorts / hotels : They use dhoop sticks as a supplement to the room fresheners and perfumes so as to ensure a pure, natural and authentic Indian set up.

VI.        Area required

The area required to set up a dhoop making business would be 1000 sq ft.

VII.        Raw materials required

The raw materials required for making a dhoop stick are as follows :

·       Coal powder

·       Gum powder

·       Bamboo sticks

·       Jikit powder

·       Perfumes

·       Water

·       Boiler

·       Cooler

VIII.        Machinery requirement

The machines required for the a dhoop stick making business are:

·       Dyer machine

·       Formula mixing machine

·       Bamboo Stick extracting machine

·       Packaging machine

·       Dhoop stick making machine

IX.        Manpower requirements

The manpower requirement for a dhoop stick making business is

·       1 production manager

·       1 technician

·       2 skilled labours

·       5 unskilled labours

Moreover a thorough guide and training to them must be given in terms of equipment handling, safety and precautions, machine using procedures etc

X.        Business model and growth :

The business model for the dhoop making business can be defined with these 4 variants :

A. Value proposition : The unique selling point and the value which the dhoop making business would provide you with us as follows :

·       The demand for dhoop sticks is eternal because people in India have deep rooted religious sentiments and dhoop stick is a medium of maintaining it and is affordable

·       The production of dhoop stock requirements a very minimal investment and also brings in a global demand 

B.   Target consumers : The target consumers for your shop stick making business would be :

·       Ayurvedic and retreat centres

·       Spas

·       Resorts and hotel industry

·       Religious / holy places

·       Therapy clinics

·       Households

C.  Competitor review : Dhoop stick is product out of which consumers seek purity and good fragrance so any brand that offers that will do. But there are certain companies which through their long run, legacy and experience is businesses gain a loyal customer base.

So the major competitors in this business are :

·       Cycle pure

·       Patanjali

·       Zed black

·       Moksh

D. Marketing strategy : The marketing strategy for dhoop stick involves focus on developing:

·       Advertisements highlight the quality, smell and the time period for which a dhoop stick lasts in household set up

·       It can come up with sales promotional measures like buy one get one free etc at affordable prices

Growth

The dhoop stick industry’s growth has been rising high up in the air just like its fragrance :

·       The Indian dhoop stick market has a CAGR above 6% annually

·       India has been exporting dhoop sticks to 160 countries out of which USA holds for $11.3 million imports, UAE at $6.23 million and Nigeria at $5.85 million

·       The demand for dhoop sticks has been boosting since FY 2009 contributing to its expansion in terms fragrances like Apple, chocolate and also in terms of shapes : coils and sticks etc

XI.            Profit margin

By setting up a dhoop stick making business one can earn a profit margin up to 10%

XII.        Suggestions

Why don’t you light up your room with one of those dhoop sticks while we help you make a decision of whether or not to make a set up a dhoop stick making business :

·       Firstly, dhoop sticks are manufactured using bamboo sticks and certain fragrance enhancing elements so it has a minimal investment and reasonable profits

·       Secondly the consumer base for a dhoop stick is permanent and increasing because of the religious sentiments held by the Indian consumer market

·       Secondly, because of it’s affordability, variety and authenticity the demand for dhoop sticks has been globally made.

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