The Media Dialogues EP 31 | Harsha V Agarwal Of Emami

Thank you. Nice to be with you.

Not many trends which were there, you know, suddenly you see trajectory change in this last 5 months. From the consumer perspective, people have stopped going into public places where there are larger crowds as of now. But I believe, going forward, when things become normalized, they will start going back to malls, to cinemas, and so on. But yes, I think from the consumer habits perspective, from the perspective of the products they consume this year, huge trend towards health products, towards hygiene products, and consumers are becoming more health conscious. They are looking for products which are safe, which don't have harmful ingredients, and at the same time they are also now much more open towards preventive health products. Because earlier, if you see most of the products in India, it was always from the perspective of problem and solution, be it in most of the categories.

Now, this is one of the big changes that we are seeing. People want to prevent, so preempt. They want preemptive action with regard to their health and safety.

So, preempt. They want preemptive action with regard to their health and safety.

Absolutely right. FMCG is one of the few industries which has done well in these challenging times. From our perspective, we had some very strong brands where we saw that there was a very clear right to win for us. We had a brand called Boroplus, an antiseptic cream, a very old and trusted brand, and there was a very natural shift and extension into the hygiene categories. So we entered into sanitizers, launched health soaps, and are also launching health hand wash under Boroplus, and we see a lot of opportunity there. Apart from that, we have a brand called Zandu, which is into healthcare, more than a 100-year-old brand, very trusted, crores of people using it. We already have a plethora of products, but we could immediately see that there is going to be a big shift towards immunity. Consumers really want immunity-based products. As a company, we evaluated how quickly we could launch products in these two segments to maximize the opportunity that COVID had thrown up. We are also in the process of launching a range of products in the home care category, because that is another segment which we believe has taken up really well, and we were not present in any of those segments. So it was a very good opportunity for us to expand into this whole portfolio and launch products.

For any company, it's very important to be agile and flexible. So yes, as a company we had plans and strategy to enter into few categories, but looking into the COVID opportunity and when we saw the consumer trend and what consumers were looking for, we very quickly changed our strategy and decided to enter into these categories as soon as possible.

We believe we had very strong brands, and hence we had this right to win.

Suppose even if I take the example of sanitizer. We know that hundreds of companies entered into this segment.

But at the same time, I believe most of them are just looking at it from a very short-term perspective, how to take advantage in these few months. But what we believe is that this trend of consciousness towards hygiene is going to continue. And we are here to play a long game rather than being very opportunistic from a short-term perspective. Because Boroplus was a trusted brand, obviously that really helped.

Consumers accepting the new products that we launched in the market. Our supply chain was really geared up and we could distribute the products really well. And apart from that, one of the biggest challenges was how to get all the raw materials, packing materials.

And then production because even now, though.

At in broader terms, lockdown is not there, but challenges at local level continues.

Sometimes in districts, sometimes in production units due to COVID containment zones. So.

Those challenges are always there, but as a company we need to manage that. We need to be very agile and flexible to manage that. You have to support the products you have launched. Initially, because of the very strong tailwind, retailers and consumers looking for these products will help you, but going forward, we have a lot of plans to invest behind these products in traditional media and digital media.

Digital media, in this digital age, brings a lot of opportunities for everyone. There is no doubt that it makes the overall media planning going to the consumers much more complex, but at the same time, opportunities also. For us, it's not the question of whether we can now shift from traditional media to digital media. I think it will be the right mix depending on the different brands. Many of our brands are targeted towards the masses, so for them traditional media will still play a very important role because that gives you a very large reach and visibility that a mass brand looks for. In marketing, a brand is interested in communicating the story to the consumers. Earlier there were few media like TV, press, radio, or outdoor media. Now digital media opens a lot of opportunity for marketeers to be more creative, more innovative, and more targeted in terms of targeting a set of consumers to reduce wastage. So I look at it from the perspective of overall 360 degree.

So I think it's about the right mix.

Men's grooming is one category where, because it's a discretionary spend from the consumer's point of view, we have seen that consumer spending in this category has come down at this time. In many segments, we see penetration level going down by 20-25% at this time, if I look at the month of June. But what I believe, going forward, it is bound to improve because men really want to look good. Now, they're not going out, so they need not use deodorants as much or hair gels as they would have used while going out in the evening. So some of these categories, their need at this point is reduced. But going forward, when things become more normalized, the larger trend for men to look good and be groomed well will continue. The desire to look well is only going to increase.

See, what I would say, as a company we have always been very conscious about the sentiments of the consumers. And whatever we do, now, in the past, or going forward, we'll always respect the consumer sentiments. And whatever actions we take will be keeping in mind the consumer sentiments.

So that is our approach.

See, India is a very, very large country.

There are crores and crores of consumers. Different people have different perspectives towards things. So what I can say in this regard is that if we see the fairness category from the perspective of Nielsen reports, it has been growing over years and even now it has been growing, which clearly shows that the desire for consumers to look fair is there. And we don't want to put a value judgment to that desire. As I said, we'll respect the consumer sentiments and basis that, we are present in this segment. Similarly, many other companies like Unilever are present in this category. Going forward, the whole world is changing, consumers' preferences are changing, and companies need to keep evaluating their strategy and change it according to the need of the consumers.

We are reevaluating. We are also working with the consumers to understand what are the changes, what are their needs in today's time, and what changes we need to bring in our strategy. So that is what we are doing. We are also evaluating.

As you rightly said, the matter is sub judice, so it would not be right for me to comment anything on this matter. So I would like to let's wait.

Now, after COVID, post-COVID, what we are seeing suddenly is that the rural markets are performing better than the urban market.

And that is due to many factors. One is certainly the reverse migration that has happened. Number two, the various schemes of the government to put money in the hands of the farmers and rural people is also going to help. And thirdly, what we believe is that the farming sector has done well in the past few months, and going forward also, because the overall acreage of farming has really gone up by 15-20%, which is certainly not small. That means farmers' income and the money in their hand to spend will also go up. As a company, we believe we have the right SKUs from the perspective of low-priced unit, single use packs, etc., which are already there. So we are getting advantage of that, and going forward, it will be a very important part of our overall strategy.

So we are optimistic about rural.

We have been using celebrities for the last 25-30 years. We were one of the pioneers in that. My experience has been that there are two things here: the company and the celebrities. As a company, it is our responsibility to ensure that whatever claims we are making in the advertisements are the right claims, justified claims, and what we can make. That takes care of all the issues in that law. From the celebrity perspective, they have always been particular. Maybe some a bit more, some a bit less, but always very particular to not claim or say anything they believe is not right. They always trusted us as a company. They knew that if we are claiming something, we have the data to back it up. Going forward, I think it's a good thing to have because there were many fly-by-night operators, smaller companies, that used to make whatever claims they felt like. So it will certainly help in controlling that. And to a certain extent, ASCI was already there taking care of that.

So it's a positive development.

Was taking care of that.

See, my belief is it should be something new. There are not many gray areas. ASCI has been there for many years, so there can be a lot of learnings taken from that. But I think a new perspective needs to be added, keeping in mind the time which has changed, because again the online media, the influencers, etc., how do you take care of that? So you need to build on all those things as well.

Certainly the macroeconomic scenarios are challenging. But at the same time, it is improving, no doubt about that. Things were very bad in April even for us, for any FMCG company, but it started improving from May, and June was better, July was even better, and so on. Going forward, with the strategy we have of new products and the existing products pool, we are in many of the right segments: health, hygiene, and many other brands like Navratna or Zandu Balm. Keeping those things in perspective, I don't see much of a challenge going forward because from here, things should only improve. In July, we have seen a double-digit growth. So going forward, the trend is good. Hopefully, we are able to maintain this unless some unforeseen challenges come up.

Things come up.

Thank you. The pleasure was entirely mine. Thank you very much.