Emami expects Q-commerce channel to grow five-fold in 2 years: VC & MD

Home-grown FMCG major Emami expects four to five-fold growth in sales through quick commerce channels in the next two years, the company's Vice Chairman & MD Harsha V Agarwal said on Monday.

Besides, it is also looking for more acquisition opportunities in D2C (direct-to- consumer) segments in sectors like nutrition, pet care or health food.

The Kolkata-headquartered company is quite encouraged by a good monsoon this season and is "optimistic" for good festive season sales, even from the rural markets, which were lagging.

Emami has recently acquired the remaining 49.6 per cent stake in Helios Lifestyle, which owns men's grooming brand 'The Man Company'.

 

Besides, it had acquired a 26 per cent stake in Axiom Ayurveda, marking its entry into the packed juice business and increased its stake in pet care product maker Cannis Lupus.

"...we have been very aggressive in the acquisition and even going forward, we are looking for acquisitions, be it full acquisitions or partnering with D2C companies in their growth journey and grow together," Agarwal said.

In its latest annual report, Emami said 45 per cent of its top-line in FY24 came from acquired brands, while non-seasonal brands contributed 56 per cent of its revenue.

The company, which owns brands such as Navratna, Boro Plus, Kesh King and Fair And Handsome, is "cash-rich and zero-debt", enhancing its capacity to invest in "acquisitions and entry into new categories" with moderated risk, it added.

"There are many areas in D2C spaces, be it nutrition, be it pet care and be it health food where we have already invested and looking for more good and better opportunities," said Agarwal on the sidelines of an event organised by industry body FICCI.

When asked about quick commerce, Agarwal said FMCG companies are having a "very very fast" growth from this channel.

"Even for us, we expect in next two years to grow by 4X or 5X in area of quick commerce," he said, adding the hyper growth in this channel is because it provides options of "convenience and flexibility" to the buyers.

This is "quite a relevant" area, for which the consumer might stick to, Agarwal added.

"Hence as a company, we are also looking for more opportunities in terms of more products which are relevant to them through this channel and take benefit for opportunity of this," he said.

About the festive season demand this year, he said: "We are quite optimistic."

"The monsoon is good and even the rural demand in the festive season will be good. We are looking forward," said Agarwal.

Agarwal expects the trend of premiumisation to stay in the FMCG sector as people are looking for more specific and niche solutions and are even ready to pay for it.

For the financial year ended March 2024, Emami's revenue from operations was Rs 3,578 crore.