Amid inflationary pressures, FMCG major Emami will put emphasis on ‘packaging innovations’, especially for low-unit packs (LUPs) and bridge packs, to boost sales amongst the lower-end consumers.
The health and personal care maker is now ‘increasingly looking’ at direct-to-consumer (D2C) and business-to-business (eB2B) segments with an overall focus on digital space after it saw a doubling of e-commerce revenue in the last financial year. The company also intends to stay ‘deeply invested’ in its core area of Ayurveda.
“In e-commerce, the direct-to-consumer segment is expected to have a $100 billion addressable market by 2025 as per industry estimates. Your company is nimble enough to capitalise on this consumer transition towards convenience driven platforms. With an overall focus on digital business, we are now increasingly looking at D2C and eB2B segments,” chairman R S Goenka told shareholders during Emami’s 39th annual general meeting on Friday.
Goenka said the company has launched D2C websites for brands like Zandu, Kesh King and BoroPlus. It launched and marketed a range of ecommerce-specific products and digital first brands like ‘Onion’ range under Kesh King, ‘Gold and Therapy’ range under Navratna and more than 20 healthcare products under the Zanducare D2C platform in FY22.
Notably, the company’s e-commerce revenues doubled and contributed 5.5% to its domestic business last fiscal as against 2.8% in the previous fiscal.
Goenka said emphasis will be there on packaging innovations, especially for LUPs and bridge packs, to drive up consumption amongst the lower-end consumers amidst increasing inflation. Also, there will be focus on analytics and technology in sales, and distribution will be further strengthened to drive the business ahead.
Talking to FE last month, Naresh Bhansali, CEO-finance, strategy and business development, Emami, had said inflationary impacts on demands for FMCG products were there in both rural and urban markets. “There has been a growth in demand for FMCG products, but it’s not as high as we would have liked,” Bhansali had stated.
During the AGM, Goenka said in a country as vast and as populous as India, the challenge was not as much in branding and manufacturing as much as in placing the product at the right location at the right time, especially at tier-II and tier-III cities and towns, which were leading the way in the Indian consumption story. “It is with this priority that the company continued to emphasise on Project Khoj during the last financial year, an initiative marked by the addition of 8,000 rural towns to our direct distribution network, taking the total tally to 40,000 towns. We intend to almost double our rural coverage to 60,000 towns by FY24,” he informed.
The company believes that Ayurveda will continue to be more relevant. As estimated by IMARC (2021), the Ayurveda market is expected to grow by around 15% during 2020-2025. “People are today more and more aware of the goodness and health benefits of Ayurveda, which the pandemic helped to bring into focus, especially in the categories of prevention and immunity. Continuing with this trend, your company also intends to stay deeply invested in our core area of Ayurveda,” Goenka informed.
He said in the current financial year the company has started on a strong note of resilient performance in the first quarter with a revenue growth of 18%. “Some of our leading brands like Navratna, Kesh King and Fair and Handsome posted high double-digit growth while the newly acquired brand, Dermicool contributed 8% to the topline. The first quarter of this year saw some corrections in our pain management and healthcare range, particularly the immunity portfolio due to significantly high base in Q1FY22,” he added.
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