In the early 70s, two school friends, Radheshyam Agarwal and Radheshyam Goenka, left their corporate jobs at the Birla Group to embark on an entrepreneurial journey, making and selling cosmetics.

From its humble beginnings as a face cream seller in Kolkata to becoming one of India's leading business conglomerates with revenue worth Rs 30,000 crore, Emami has traversed a journey of five decades marked by grit and resilience.

Emami group’s businesses are currently spread across sectors like FMCG, newsprint and cardboard manufacturing, ball pen point manufacturing, pharmacy retail (by acquiring pharmacy chain Frank Ross in the mid-1990s), contemporary art, real estate, books and leisures retail.

On the sidelines of their golden jubilee celebrations, exchange4media spoke to Emami group’s directors — who are second-generation scions — at their headquarters in Kolkata on the group’s success story, marketing strategy and more.

“Snow (a cream for glowing skin) was their first product, which they (senior Agarwal and Goenka) sold from the back of a hand-pulled rickshaw. They experimented with a few more products but failed to pull it off. Frustrated, the duo decided to shut the business and go back to their respective jobs. Then, Goenka's relative asked them to give it another shot and extended a help of Rs 20,000,” Aditya Agarwal, Director of the Emami group and the younger son of RS Agarwal, told e4m.

“With this seed fund, both partners launched Emami Talcum Powder, Emami Vanishing Cream, Emami Cold Cream and Himani Glycerine soap, which slowly became popular among consumers in the mid-seventies. With continuous innovation and understanding of the consumer market, they slowly managed to create an increasingly loyal consumer base,” says Manish Goenka, Director of the group, who along with Aditya handles the edible oil, biodiesel, newsprint and cardboard business.

Founders firmly believed that Indian women have similar aspirations as the women in Europe. By 1978, Emami Vanishing Cream became the market leader with 22 per cent market share, and Emami talcum powder became the second-most popular brand in its category in India.

They also introduced imported French perfumes in innovative packaging. The products were an instant hit. The company gradually expanded its footprint from West Bengal to the rest of Eastern India and thereafter to other parts of the country over five decades, Manish and Aditya share with pride.

Emami’s FMCG business currently has an annual turnover of about Rs 3,400 crore and boasts of a diverse portfolio with over 500 products comprising popular household brands such as BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Mentho Plus Balm and Kesh King. They entered into other businesses slowly.

While octogenarians RS Agarwal and RS Goenka stepped down in 2022 and continued to be board members, their next two generations of sons and grandchildren are handling various operations of the empire smoothly, something which surprises many.

Acquisitions and diversifications

In 1978, Himani, a century-old company producing cosmetic and personal care products with good brand equity in Eastern India was up for sale. Agarwal and Goenka realized the opportunity and acquired Himani, the first such move by the duo, which proved to be the turning point for the organization.

Later, Emami ventured into newsprint production, becoming India's second-largest producer aiming for further growth. Their diversified portfolio includes CRI Limited, a major pen tip manufacturer, Emami Frank Ross Limited with over 250 pharmacies, and retail ventures like Emami Art and Starmark.

Emami's growth strategy focuses on strategic acquisitions, including heritage brands like Zandu, Kesh King, and Creme 21, enhancing its brand portfolio.

“Emami Limited has strategically pursued growth through acquisitions, adding significant brands to its portfolio. From acquiring the century-old heritage brand Zandu in 2008 to the purchase of Kesh King in 2015 and German skincare brand Creme 21 in 2019, the company has consistently expanded its reach. We also acquired 'Dermicool’,” shares Manish.

The company now looks to enter into new categories such as packaged staples like atta, rice, sugar and salt, ready-to-eat, ready-to-cook, gourmet packaged food and kitchen appliances. There are plans to undertake an initial public offering for the group’s edible oil and packaged food business, Emami Agrotech.

Divestment of loss-making ventures

The company promoters have always had a prudent approach when it comes to investment. “The group loves to take risks by investing in new businesses. At the same time, we never hesitate to shut down and divest them when they don’t grow the way we predicted,” said the directors.

The company recently sold 85 per cent of their stakes in AMRI Hospital to Manipal Hospital. The group is also keen to sell the Frank Ross pharmacy chain if it gets a good valuation to focus on higher-margin businesses.

“If a business unit is bleeding, cut your losses and move on. Our fathers have always taught us,” the directors noted.

Earlier, the company shut its steel business within three years of its launch. They also started a monofilament yarn business but divested it after eight years.

Growth credited to huge investment in brand building

Pricing, packaging and promotion are the pillars on which Emami has built its business. Emami's strategic approach to marketing and branding played a pivotal role in its ascent to prominence, said company officials.

Emami’s FMCG business alone, which is a listed company, spends Rs 500-600 crore annually in advertising, brand visibility and consumer engagement, as per its financial results. It's about 17 per cent of their revenue, among the highest in the FMCG category. The group’s overall spending is far more than that.

“Emami’s growth is credited to our huge investment in advertising and marketing. Not many businesses spent on brand building those days the way we did. We always believed in brand building and understood that it required a long-term investment to succeed in the market. We can't just spend on fixed assets. Hence, the company started investing in print media within four years of inception. In 1980, we debuted on TV with our commercials,” noted Agarwal.

The company always relied on a bunch of brand ambassadors, perhaps the largest contingent in the category. “In the eighties, the company had all big film stars like Anita Raj, Zeenat Aman, Rekha, Rati Agnihotri, Sridevi, Raveena Tandon, Sonali Bendre, Madhuri Dixit and Divya Bharti as ambassadors of various brands,” Agarwal shared.

While Emami still boasts of a large number of brand ambassadors such as Amitabh Bachchan, Salman Khan, Shah Rukh Khan, Katrina Kaif and more, Agarwal insists that Emami's rapid growth is driven not only by celebrity partnerships but also by its adeptness in operational innovation, marketing investments, and strategic competition navigation.

"We can't precisely gauge the direct impact of brand ambassadors on sales. However, we firmly believe that building a successful brand necessitates a blend of strategies, much like crafting a perfect recipe where every essential ingredient is proportionately combined and prepared to perfection," he remarked.

Pioneers of in-film advertising

The company was the first to venture into in-film advertising way back in 1983 with the film Agar Tum Na Hote with stars Rajesh Khanna, Rekha and Raj Babbar. Khanna’s character was the owner of Emami in the film and Rekha was a model for the brand, Goenka said.

Since the beginning, Emami's founders focussed on the packaging design so that their brands stood out in the market. Their first range of products - talcum powder and vanishing cream - had white labels with gold foil stamping, which was a novel concept in India back then.

“We always aspire to become the world’s most respected marketers. In the pursuit of becoming No. 1. Even if we become the best marketer in Asia or India, it would be an achievement,” Aditya quips.

TV most preferred medium

“Over 60 per cent of our ad spends go to television media, followed by print, radio and digital. Besides traditional ATL and BTL, the company is also spending on digital platforms. Our investment in digital advertising is growing fast,” says Aditya.

Emami Group also owns the East Bengal football club in Kolkata and often invests in the Indian Premier League. The group was the patron of the Indian Deaf Cricket Association in 2023.

Citing American marketer John Wanamaker’s famous quote "Half the money I spend on advertising is wasted; the trouble is I don't know which half", Aditya shares that the company has a cautious approach towards spending on digital.

“Advertising on digital media is tricky. It is difficult to understand if it works for you. It's the same as wondering if brand ambassadors actually help draw sales,” he chuckled.