Digital spends take centre-stage for Kolkata-headquartered FMCG major Emami
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Kolkata-headquartered FMCG company, Emami’s over 50-year-legacy spans across a strong portfolio of brands such as Navratna Oil, BoroPlus, Zandu and Kesh King amongst others. The brand, which is known for its lavish print and television campaigns with the likes of Amitabh Bachchan and Shah Rukh Khan, Akshay Kumar and Katrina Kaif endorsing its brands, has in the past year substantially increased it spends on digital platforms.
Speaking to Fortune India, Harsha Vardhan Agarwal, vice chairman and managing director, said that the company’s digital spends have gone up by 15%-100% depending on the brand.
“Today everybody has a smartphone, so, we have increased digital spends on also our core brands which target the masses. Ultimately, you have to follow where the consumers are. I am not saying that traditional media is irrelevant. One has to spend money there too. But a lot of consumers are shifting to digital media and spending a lot of time there,” explains Agarwal.
The FMCG company which started investing in D2C brands (The Man Company, Brillare, Vedix and more recently Axiom Ayurveda and TruNativ) since 2017, is hoping that the new-age brands by the end of FY27 would contribute around Rs 800 crore to its topline.
In fact, it is these brands which in the past couple of years have been driving the company’s growth. The FMCG industry, according to Agarwal, is witnessing a sea change, with consumers across the board embracing premiumisation.
“We could identify this change, quite early is what I would say and that is why we started investing in some of these new age brand and companies way back in 2017. That bet we had taken at that point of time is now paying results. Our new-age businesses have grown handsomely. At the same time our core brands are in categories which are under-penetrated, therefore, there was enough headroom to grow. Despite the geopolitical headwinds and inflationary pressures, we have grown.”
While profits came under stress, the FMCG company’s domestic business in Q2FY27, grew 49%, with a volume growth of 43%. On a like-to-like basis, domestic revenue increased 32%, while volumes rose 26%.
New-age brands emerge as key growth drivers for Emami
So, how important is it for a legacy FMCG company to have a robust D2C portfolio? “Legacy companies are acquiring D2C brands because they are seeing growth opportunities,” says Agarwal. Who has an upper-hand? It’s a win-win for both, according to him.
For the legacy company, a D2C company is a future growth engine, while for the D2C founder selling out to a legacy FMCG major is a good way of building longevity for the brand he/she has painstakingly created and scale to Rs 100-200 crore. “Most founders don’t want to take risk to scale up their brand to Rs 500-1,000 crore. They prefer to exit and get a legacy brand to invest in distribution and ensure that the brand they created is available everywhere.”