FMCG companyEmami Ltd is expecting the international business to grow in double-digits during the current financial year, backed by foray into newer markets and strengthening presence in some of the existing geographies. The geo-political tensions notwithstanding, the company’s international operations grew by around five per cent in 2021-22, led by key geographies such as Bangladesh and Sri Lanka in SAARC.
According to Prashant Goenka, Director, Emami, international business currently accounts for nearly 15 per cent of its total turnover, which stood at around ₹3,192 crore on a consolidated basis as on March 31, 2022.
“Entering new markets is the oxygen for growth in the international business. We are currently evaluating new markets with a detailed launch plans. In FY23, if market conditions remain normal, IMD (international marketing division) expects the business to grow in double digits,” Goenka said in response to an email questionnaire shared by BusinessLine.
Emami’s latest annual report (2021-22) charts some of the strategies adopted by the company to grow its international business, which includes initiatives taken to serve global markets; researching global trends and manufacturing selectively in the global markets; acquiring global brands for global markets, thereby deepening its international orientation and deepening focus on the top 15 countries (accounting for nearly 85 per cent of global revenues), where key brands such as Navratna, 7 Oils in One , Fair and Handsome, BoroPlus, Creme21, Kesh King etc. have achieved leadership positions in their respective segments among others.
The company has localised its supply chains instead of sourcing products from India by entering into proprietary as well as third-party manufacturing arrangements in Bangladesh, Germany, Sri Lanka, Thailand, and UAE.
“At Emami, even as we derived 85 per cent of our consolidated revenues from within India, there is a growing focus to extend our presence across international geographies. This extension is based on our conviction that international sales help us defray an excessive dependence on the Indian market. A wider spread across country markets makes it possible to broadbase our international risks across diverse markets, draw insights from one or few markets for onward replication in others, and draw on emerging trends to design and launch new products,” the report said.
Diversifying into newer markets
A major chunk of Emami’s international operations has been mostly led by its performance in Bangladesh. However, the company is now identifying a well-charted granular strategy for the MENA (Middle East & North Africa) region.
“Catering to Asian consumers, especially consumers from the Indian subcontinent, has been Emami’s forte. Thus, Bangladesh, with consumers resonating with the Emami range of brands, has fuelled the growth of the international operations. We shall continue to strive and thrive in Bangladesh. However, we recognised to rethink our international approach to enhance effectiveness, i.e., become relevant to consumers across diverse nationalities,” Goenka said.
Emami’s brands are also sought after by consumers in the Middle East, Russia, Africa, and South Asia.
“The economy is expected to rebound in Middle East and North Africa (MENA) countries. There is rising consumer optimism accompanied by higher spending. By 2040, 1 in 6 people younger than 30 will live in the Middle East. It will be a bright, young, futuristic region,” he said.
The pandemic and shift in global markets might have affected the largest industry in Bangladesh, which is the ready-made garment industry. He said this in turn could lead to economic stagnation, less consumer spending and selective buying behaviour.
However, Bangladesh remains one of the priority markets for international business and it will continue to take the steps necessary to drive growth.
“We have a strong innovation funnel as per the local requirement, which is expected to be introduced in the coming quarters. Our team is also ready with robust marketing plans which we shall be expediting,” he said.