Emami Ltd is looking to give a big thrust on distribution to ramp up its sales. Plans are afoot to double its rural coverage to close to 60,000 towns across 13 States by FY24, thereby broadbasing coverage and seeding locations with its products for the first time.

The company is also focusing on driving sales through the modern trade and e-commerce platform with a clear focus on urban markets.

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Under its ‘Project Khoj’, Emami added over 8,000 towns during 2021-22, widening the rural coverage to 40,000 towns as on March 31, 2022, the company said in its latest annual report. It managed to garner additional business of ₹31 crore from new towns in FY22. The target is to increase it to 60,000 towns by FY24.

“The challenge is not as much in branding and manufacturing as is in placing the product where the consumer needs it. Despite being in this business for over four decades, we find that distribution continues to our last frontier — partly because consumption points are beginning to change; besides, there are locations where Emami products are distributed by resellers and where we need to establish a direct presence,” the report said. This approach has driven its growth in the past and is expected to do so in the foreseeable future, it said.

As part of healthcare business outlet expansion, the company increased reach by 31,700 outlets in FY22 (overall reach 1.09 lakh outlets). It also appointed a special team to focus on 20,000 prominent chemist outlets.

Modern trade, e-commerce

Emami has created a separate structure and activation programmes for 10,000-12,000 standalone modern trade stores. In FY22, reach across standalone modern trade stores was expanded to 40 cities and over 3,300 outlets. During 2021-22, modern trade sales grew 17 per cent with contribution increasing marginally to 7.3 per cent of domestic sales (close to 7 per cent in the previous year).

“We believe that the world is moving towards convenience-driven platforms. The company was nimble enough to capitalise on this consumer transition. In this respect, the modern trade revenues grew 17 per cent; our e-commerce focus doubled revenues and contributed 5.5 per cent to our domestic business (2.8 per cent in the previous year),” it said.

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The company launched several digital-first products across the Zandu, Navratna and Kesh King brands, against the old convention of launching products offline first. In doing so, the company addressed more than 17,000 PIN codes, which accounted for 94 per cent of the national products delivery universe.

“As India’s consumer profile is driven by millennials, we see our products being purchased more off the shelves in large stores of malls where consumers can inspect them closely and comprehensively. We also believe that a growing percentage of Emami products will be sold online, circumventing bazaar visits,” it said.

Emami is investing disproportionately in enhancing its online visibility and believes that a growing percentage of its offtake will be sold through e-commerce marketplaces.

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