Emami opens up a third front

With Rosscare, Emami is tapping into lucrative pharma channel

The growing specialised health care needs of India’s 1.2-billion-population are opening up new avenues for players operating in the space. One of them is the Emami Group, the Kolkata-based diversified conglomerate, best known for its fast moving consumer goods and health care company of the same name. While the flagship brand Emami is focused on FMCG, Zandu caters to the ayurvedic health care market and Rosscare, a third brand launched recently by the group under the Frank Ross pharmacy chain will target the growing pharma channel in the country.

Though Frank Ross has been part of the Emami Group for 24 years now (it was acquired in 1993 and has a presence largely in the east), the conglomerate is giving the business a push now with Rosscare. The plan, according to group executives, is to increase its product portfolio under Rosscare from the current 80 to 200 in the next year and a half.

Rosscare’s existing range includes nebulisers, vaporisers, surgical tapes, homecare, personal care and food & beverages. The plan is to add cosmetics and confectionary to the list.

Rajendra Kumar Jatia, managing director, Emami Frank Ross, says, “While pharma products will still remain core to the Rosscare portfolio, we will strengthen the non-pharma product range as well in the coming months,” he says.

The company is doing this by tapping into its existing contract manufacturing model to beef up its product portfolio. Some products could also be manufactured by the Emami Group in the future. With this, Emami Frank Ross hopes to add around Rs 100 crore in the next few years to its existing topline of Rs 350 crore.

On the pharma trail 

Of the nearly 12-15 million retail outlets in the country, nearly 10-12 per cent, according to industry estimates, consist of pharmacies, big and small.  While it remains a core retail channel for pharma companies, in the last few years, pharmacies have been a lucrative option for consumer goods companies too.  According to industry estimates, pharmacies today contribute to nearly 20-25 per cent of retail sales for consumer goods companies in tier I and tier II markets versus 8-10 per cent (of sales) earlier.

The reason for this is not difficult to gauge: Chemists today stock not only traditional medicines and pharma products, but they are also moving beyond that into a range of FMCG categories. The pharma channel, say experts, is also a step-up to a mom-and-pop grocery store, where the look and feel of outlets is upscale in comparison to traditional grocery outlets. 

Organised pharmacy players are even more upmarket in their look and feel, contributing to the uniqueness of this channel. Some pharma outlets are going a step beyond, stocking organic products as consumers place greater trust in these channels versus regular general and grocery stores.

It is this holistic approach that is pushing existing players such as Frank Ross to widen their ambit. Private labels, launched mostly by organised pharmacy chains, are also a growing extension of their business today.

Rivals such as Apollo Pharmacy and MedPlus, for instance, have had private labels for a few years now and are expected to step up focus on these brands as footfalls grow. Frank Ross’s daily footfalls, for the record, are estimated at 40,000 to 45,000 today, with plans to ramp up this number as both store footprint and product range (within stores) grows. The chain currently has a total of 180 outlets located in West Bengal, Odisha, Gujarat and Karnataka with plans to take this up to 300 by 2018. It will also retail Rosscare-branded products beyond its stores, tapping into sister Emami’s distribution channel for this. 

No star power for now

Emami Ross Care will not bank on sister firm Emami’s penchant for brand ambassadors to hawk its products. Instead, it is counting on word-of-mouth and marketing at point-of-sales to push its products. Promotional offers and discounts are also expected to act as a hook, company officials say to drive footfalls into stores and improve sales. Could this strategy though change in the future?

While brick and mortar pharmacy chains do not aggressively advertise in mass media, online pharmacies such as Netmeds.com have bucked the trend, marking their presence aggressively on television. 

Netmeds.com also has brand endorsers in comedians Krushna and Sudesh as the need to induce brand recall grows. This comes as consumers seek convenience and the comfort of their homes and offices when making their pharma purchases. Though online pharmacies are still small in comparison to their brick and mortar counterparts, the former’s marketing push is something that the latter could borrow, say experts, as growth prerogatives grow.