The Stunning Rise and Fall of Keya Cosmetics

The Stunning Rise and Fall of Keya Cosmetics

In the ’90s, as one of the main means of product promotion, companies used to advertise very attractive adverts on TV and radio. If you list them all, the ads from Keya will always stand out. By selling various cosmetic products alongside coconut oil, beauty soap, lip gel as well as advertising attractive jingles, the company has established a strong position in the industry in a relatively short time and was able to capture more than 15% market share. Keya Cosmetics was also able to create a strong brand image through the title sponsorship of the hugely popular magazine television show, “Ettadi.” aired on BTV hosted by the most popular and beloved host in Bangladesh, Hanif Sanket. However, for the last few years, the advertisements of Keya Cosmetics products have not been seen much.

Despite the good growth of the cosmetics sector in Bangladesh, the position of Keya Cosmetics is not so noticeable. The company stumbled due to lack of some tough and timely decisions in the business sector. The company has not been able to pay any cash dividends to its shareholders since 2010. Keya Cosmetics was even among the top 10 companies in the capital market in 2019 in the list of top 300 loan defaulters.

Keya Group TV Ads

Cosmetics & Toiletries Industry of Bangladesh

Before discussing the current situation of Keya Cosmetics, it is necessary to have some idea about the cosmetics and toiletries sector in Bangladesh. According to an article in the Dhaka Tribune, the sector had a turnover of BDT 150 billion in 2015, which was about 1-percent of the country’s GDP at the time. Domestic companies dominate the sector with a growth rate of more than 12 percent. Among the top players in terms of market share are Unilever Bangladesh, Kohinoor, Square, Kashem Group, Kallol Group, Mausumi Industries, and Delta Group. The current turnover in the sector is estimated at $3.2 billion or Tk 270 billion. Cosmetics and toiletries companies have to allocate a large portion of their operating expenses for product promotion as they rely on advertisement-based promotions. According to a report by the Bangladesh Brand Forum in 2015, the cosmetics and toiletries sector was in second place with the telecom sector in terms of AD share percentage with 11-percent share. Cosmetics companies previously relied heavily on TV advertising and celebrity endorsements, but now social media marketing, and various national and international event cosmetics companies, are considered to be one of the main means of product promotion.

History of Keya Group

Keya Cosmetics Limited was started by the current chairman of the company, Mr. Abdul Khaleq Pathan. In 1983, he founded a company called Khaleq & Co., and started a building materials business. He later became interested in the soap business and in 1996 set up a factory at Jarun in Gazipur at a cost of Tk 12 crore. The same year, Keya Cosmetics began its journey as a sister concern of Khaleq & Co., and the following year the company began commercial operations through Beauty Soap Productions. The name of the parent company Khaleq & Co. was later changed to Keya Group of Industries.

Keya Group 4 Business Units

Keya Group has been conducting their business under 4 business units. The business units under Keya Group are Cosmetics Division, Knit Composite Division, Spinning Division and Cotton Division. Under the cosmetics division, there are two companies called Keya Soap Chemicals and Keya Detergent Limited. Keya Cosmetics was listed as a public limited company in 1999 and was listed on the stock exchange in 2001. The company started spinning business in 1999. Keya Cotton Mills Ltd. was established in 2004, Keya Knit Composite Factory in 2005 and Keya Yarn Mills Ltd. in 2006. Besides, Keya Spinning Mills were also formed under the Spinning Division. These companies produce Readymade Garments, Knitted Garments, and useful cotton. In 2015, all the companies were merged under Keya Cosmetics.

Rise of Keya Group

Initially, the main product in Keya’s portfolio was Keya Super Beauty Soap, but later, several more variants of different fragrance, size, and color were gradually introduced. These include Keya Lemon Beauty Soap, Fairness Beauty Soap, Skincare Beauty Soap, Herbal Beauty Soap, Baby Soap, Ball Soap, Lifeguard Soap etc. The company also later started producing petroleum jelly, lip gel, detergent powder, shaving cream, shampoo etc. The main raw materials of the company’s products are Sodium salt, Palm oil, and Refined, Bleached, & Deodorized or RBD Coco Oil. These raw materials are imported from Malaysia, Indonesia, Italy, France, Germany etc. Keya also imports coloring material from Swiss company Clariant and German company BASF. On the other hand, Keya products were exported to various countries in South Asia and several countries in the Middle East, including Saudi Arabia and the United Arab Emirates.

Keya Lemon Beauty Soap is considered to be the most successful brand of Keya and Keya Super Beauty Soap is just behind. The company once competed with market leaders in the beauty bar soap category by producing three fragrance and vitamin E rich beauty soaps. Keya later launched a mini version of this super beauty soap. Also in the Health Bar Soap category, Keya Lifeguard’s competitors were Lifebuoy, Savlon and Dettol. Keya later entered the laundry soap market by producing ball soap and glycerin laundry soap. The company has gradually entered almost all segments through the production of herbal beauty soaps and skincare soaps. Not to mention Keya Ball Soap in terms of gaining popularity in a short period of time.

Fall of Keya Group

Keya Soap Chemicals Ltd. was established in 2004 as a backward linkage company supplying raw materials for soap with approximately Tk 85 crore. Keya produces soap noodles, the main raw material for soap production in the company’s factory. Initially these soap noodles were imported from Malaysia and Indonesia. Keya sells these soap noodles to various local companies including ACI, Unilever Bangladesh, Reckitt Benckiser, and Square Toiletries. The Keya Detergent portfolio, on the other hand, includes Lemon Detergent, White plus detergent, and Super excel detergent. Also in Keya’s product portfolio are Keya Prickly Heat Powder, Ice Magic Body Cooler Powder, Natural Care Shampoo, Dandruff Control Shampoo, Active Toothpaste, Lather Shaving Cream, Super Saloon Lather Shaving Cream, Lip-gel, Glycerin, Chapstick and Dishwashing Bar. – including several more products. During the decade following its establishment, in 2000-2009, Keya was able to gain a good foothold in the country’s cosmetics market. Keya achieved a fairly moderate market share due to its attractive ad-based marketing, and relatively low prices. In 2010, Keya’s market share was 16%.

Reasons Behind The Fall of Keya Group

Although Kaya was able to run the business quite well from 2000-2009, the company did not maintain its success in later times.

Losing Focus

The company shifted its focus away from core business due to its inclination towards capital-intensive business like garments business before it got stability and firm position in the cosmetics business. As a result, the cosmetics business began to deteriorate. According to a September 29, 2020 report by The Business Standard, the company’s market share in the cosmetics sector stood at 5% in 2015. In the 2012-13 financial year, where Keya’s Local Sales was Tk 260 crore, in the 2016-17 financial year it dropped by almost half to Tk 140 crore. Despite the huge demand for cosmetics products, the company’s management is not looking for any activities for the cosmetics business expansion. According to a TBS report, due to the labor crisis, limited production of detergents and soaps is taking place in two production units.

Becoming a Distressed Company

As the country’s garment industry grew in the 2000s, so did demand for the product. Keya wanted to take this opportunity and planned to build a few factories in a very short time. The company took out a lot of loans for the construction of these factories and other investments. The company also bought cotton at a higher price in 2010 due to the volatility of the cotton price in the global market. As a result production cost increased and it was not possible to make profit as expected due to not being able to sell accordingly. On top of that, the company’s export order of around Tk 500 crore was canceled in 2010-11. The company has been failing to repay regular loans since then. Merging the business units to repay the loan, issuing shares in the capital market and many other things did not save the end. In 2012, the name of the founder of the company moved to the defaulter list of various banks. In the latest 2017-2018 annual report, Keya Cosmetics had a loan outstanding of around Tk 1,700 crore. In the list of top 300 loan defaulters published on June 23, 2019, Keya was among the top 10 companies in the capital market and the amount of defaulted loans was around Tk 100 crore. At present, loan repayments are relatively normal, according to various bank sources.

Keya Cosmetics

Lack of Segmentation

Kaya has not done any work on their product in the last decade. Their product categories are the same as before and in those categories the previous products are being produced in limited quantities. Soaps, detergents, shampoos, and beauty soaps are still being sold. No age-based or gender-based segments were made. Large multinational companies and cosmetics brands is manufacturing male and female-centric products to position unisex products and increase their market share.

Low Share of Voice

The share of voice of a company is the total advertising and marketing activities of the company in the sector in which it is doing business. The product marketing and promotional ecosystem has changed a lot in the last five years. Media marketing occupies a large part of the promotion. Celebrity Endorsement also relies heavily on social media. There are also promotions through traditional TVC, Local and International event sponsorship. All in all, the companies are following 360 degree or TTL marketing strategy without relying on one or two mediums. In addition to their old and new TVC promotions, Lux promotes products through title sponsorship of various drama serials, sponsorship of Lux-Channel I Superstar, billboard marketing, newspaper ads, etc. Keya is a surprising exception from this side. Although the company has always given priority to TVC based promotions, no TVC has aired since 2016. Keya is still working as a sponsor of the magazine show “Ettadi.”, but we all know where “Ettadi” is now in terms of popularity.

Absence of Positioning

Keya targeted all types of customers in the years of its establishment. The company used to keep the price 7-8% lower than the competitors to attract the lower income group.However, the company failed to position their products properly. As big companies adjust their pricing strategies through the correct positioning of their products, Kaya remains on the market as “Just Another Beauty Soap”. Other soap manufacturers have been able to achieve traction in beauty soaps as well as anti-aging, ayurvedic products. Keya’s revenue generation centers around its Beauty Soap.

Weak Product Distribution

Keya has been following the traditional model of product distribution. And that is – Manufacturer to Wholesaler to Retailer and finally to Consumers. This means that Kaya, like other cosmetics companies, relies heavily on its intermediaries. Wholesalers and retailers are less interested in Keya’s products due to insufficient products on demand, and low margins. Other companies maintain good relationships by providing adequate incentives to their wholesalers and retailers. In this case, Keya has been quite indifferent for several years.

Keya Cosmetics in Share Market

Keya’s position in the stock market is not satisfactory. The company has not paid any cash dividend since 2010. In 2011, Keya raised Tk 100 crore through a right share issue to repay its loan. The owner has also sold shares at various times to repay the loan. The shareholding of the company’s sponsoring directors was 46% as of September this year, downfrom 63% in 2017. Keya Cosmetics is one of the few exceptions where domestic and foreign hygiene and toiletries product manufacturers are seeing profit growth due to high demand for their products due to the novel Coronavirus. No annual report of the company has been published after 2017-18, no quarterly report has been published. The company held its 22nd AGM in October after the AGM was closed for the past two years. The Financial Reporting Council (FRC), Bangladesh’s financial reporting regulatory body, is also currently investigating Keya revenue and profit reporting.


Considering the product quality, pricing and popularity, Keya has moved to a better position in the market in a very short time. But due to wrong strategy, lack of diversification in the product portfolio, and irregularity in the supply chain, the company has lost its position. If Keya Cosmetics had been able to make the right decision at the right time and update itself in line with the strategies of other brands, Bangladesh would now be in a leading position in the cosmetics and toiletries market along with international brands. However, there is still room for re-branding and product portfolio, including production, packaging, distribution, and the entire company by increasing its share of voice in the media. Will Keya Group of Industries be able to go through these processes and regain a strong position in the market?

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