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 The new rules of the game

India is passing through an exciting transformation. One of the most decisive developments has been the wave of digitalisation sweeping across the nation. With a few clicks you can:

• Buy without touching physical cash
• Get your daily grocery delivered to your doorstep
• Book a cab
• Transfer money without writing a cheque
• Book a doctor's appointment and order medicines
• Plan an entire holiday
• Book train seats, hotel rooms and film tickets
• Access world news in real-time

Naya Emami
Emami is attractively placed to capitalise this opportunity. The Company has invested aggressively and proactively to ride the digital curve with the objective to emerge younger. The Company has always been an early adopter of new technologies from the early days of barcode scanning to the today's world of robotics and self-service. Besides, new retail technologies offer Emami an opportunity to innovate service consistency and back-office management.
There are several new rules of the game, warranting not just a change in the way we see things but a completely new set of eyes. We derive a deep understanding of consumer preferences through formal and informal engagements. We examine how different customer categories - housewives, farmers, bankers and students - consume. This consistent understanding of grassroot realities did something important for Emami: it helped us focus on the power of ayurvedic formulations, our biggest competitive advantage. Besides, Emami recognises that in a new business environment, there is a premium on the need to specialise. This understanding prompted us to acquire focused companies as opposed to growing those capabilities patiently from within.

Making the most of the digital revolution
In retail, more than almost any other sector, the move to a digital economy is bringing about a paradigm shift. There is an increasing need to blend traditional operating models with new-age technologies. With the advent of 4G data networks, a number of consumers have found an ideal purchase reference point through the digital media. The result is that India's digital commerce market is expected to exceed US$50 billion in revenues by the end of this year. As e-commerce grows, so should the country's ayurvedic and natural e-commerce segment. While most e-commerce platforms can expect a seven to ten-fold increase in revenue generation, the e-commerce market for ayurvedic and natural products would not only ride the digital wave but will also benefit from changes in consumer behaviour.

The country is transforming
India stands at an inflection point. The country is marked by growing per capita disposable incomes. Most citizens have grown their aspirations. Consumers are willing to pay higher for value-added products. The digital age is creating disruptive business opportunities.

And...Emami is transforming
Emami is leveraging the strengths of the past and addressing the challenges of the day. We are investing in cutting-edge technologies. We are mining data more extensively. We are strengthening our retail connect. We are exploring different delivery formats.
For instance, by deciding to market NityamChurna in a tablet form, we virtually transformed a decade-old legacy into a modern application.
The Company is also investing in startups; it acquired a strategic stake in Helios Lifestyle, an online premium male grooming company widely known for it's 'The Man Company'' brand. We took this move forward by acquiring a strategic stake in Brillare, which offers natural and premium professional salon products.
We invested >Rs300 crore in an international standard state-of-the-art manufacturing facility at Pacharia (Assam), one of the largest in the country's FMCG sector.
The big message is that Emami is virtually reinventing itself across every dimension to accelerate its growth momentum.

Strengthening our core brands
In the modern world, the strength of a brand is being increasingly manifested through an ever-widening array of media options. Emami is attractively placed in this regard. Our core brands continue to be active revenue generators enjoying market leadership despite being present for years. We believe that most consumer segments we are present in are underpenetrated, offering our brands substantial room for growth. We are continuously investing in our brands to enhance their relevance. We are focusing on brand extensions to carve out larger market shares. We are investing in cutting-edge packaging technologies to enhance aesthetic appeal.

Enhancing market reach
The lean-manufacturing revolution has prompted companies to reinvent how they build efficiently. Emami has extended this commitment to sales and marketing. When growth was elusive, we made strategic investments in our sales infrastructure. We widened and deepened our market presence. This is the result: Emami's products are not only available in all Indian cities but even in more than 25,000 villages with a population of <5,000 across the country. We enjoy a direct coverage via 8.5 lac retailers and an indirect coverage via 4.3 million retailers. Our distributor network comprises 3,150 dealers. We sharpened our focus on the modern trade channel as a key growth driver, increasing its contribution from 4% of revenues in FY17 to 6% in FY18.

Building on corporate governance
The modern world warrants a firm commitment towards enhancing business transparency and credibility. Hence, a seamless governance mechanism separates the successful from the rest. Over the years, Emami established a robust governance framework. The Company's Board comprises eminent personalities from diverse industry spaces; the various Board Committees oversee specific responsibilities that enhance understanding and compliance.

Future Outlook
Emami's new-age products comprise differentiated offerings based on the age-old wisdom of ayurveda.
Thanks to our aggressive marketing campaigns and continuously expanding distribution network, we made the most of incipient trends and intend to sustain this across the years that lie ahead. As the world transforms and new opportunities emerge, Emami is equipped to surge ahead.

We are thankful to all our stakeholders for being a part of the Emami journey and look forward to their continued support as we advance towards realising our vision of a 'Naya Emami'.

RS Agarwal | RS Goenka



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