Once upon a time — no, this is not a fairy tale — two young men, whose friendship blossomed in school and continued through college, decided to start a business together.
Radheshyam Agarwal and Radheshyam Goenka were both Chartered Accountants and had plush jobs at the Birla Group. But the dream of starting their own venture had its seed sown much earlier, when the two spent time studying chemical formulas for manufacturing cosmetics. This, even as they dabbled in several other small ventures as students.
Originally Kemko
The push for their new venture was reportedly given by Goenka’s father, who generously gave them a working capital of ₹20,000. The fledgling partnership concern, that began in 1974, was originally called Kemco Chemicals and based in Kolkata.
It sold medicines and cosmetics with an ayurvedic and herbal base. The name ‘Emami’ was chosen for marketing the products as it had an Italian ring to it (it is derived from amami , which means ‘love me’ in Italian), and it would make people believe it was imported.
The initial products were Emami vanishing cream, Emami cold cream, Emami talcum powder and glycerine soap.
It was an astoundingly daring move, to start a cosmetic products company when the field was already dominated by multinationals that had tremendous reach and deep pockets. To stand out in such a market was not easy. Retailers were initially reluctant to stock their products.
Attractive packaging
The two entrepreneurs decided to make a mark not only with the ‘ayurvedic’ label but also through innovative and attractive packaging of their products.
While other companies sold their products in tin containers, they brought in blow-moulded plastic containers with photo tone labels. The elegant ivory-and-gold colouring and the foreign-sounding name attracted customers and soon, retailers scrambled to stock their products as demand shot up. (Packaging, in fact, is one area that gets great attention at Emami even today: constant innovation is done to increase customer convenience without taking away from the quality of the products.)
The first breakthrough
Stories abound of how, in the early days, founders would personally make the rounds of shops in the area, with hand-pulled rickshaws containing their products.
They targeted the middle class and as the days went by, consumer recall of and subsequent demand for their products increased. And with this, more people were appointed; more distribution channels were established and the ‘Emami’ name started becoming famous beyond Kolkata.
The first breakthrough was made in 1978, when Agarwal and Goenka decided to acquire the ailing Kolkata-based Himani Ltd. The company was engaged in the manufacture of ayurvedic products. They managed to turn around the sick concern and more than a decade later, launched Boroplus Antiseptic Cream under the Himani name.
This extremely successful product was followed by Navratna Cool Oil, also under the Himani umbrella (today, both products are market leaders in their respective categories). As more and more new products were introduced, the distribution network extended across the country and strengthened.
Kemco to Emami
In 1995, Kemco Chemicals was converted into a Public Limited Company, Emami Ltd. It was in 1998 that Himani Ltd merged into Emami Ltd.
Emami has chosen to grow mostly through acquisitions. Starting with Himani, the brand has, till now, made several acquisitions in the personal cosmetics and healthcare categories, the most important ones being the Zandu brand (in 2008-09) and Kesh King (in 2015).
With each acquisition, it brought well-known brands in different categories under its ambit. Today, it has a mind-boggling range of products in hair care, soaps, balms, lotions, skin creams, talcum powder and ayurvedic healthcare, quite a few of which feature in the Most Trusted Brands category.
The firsts
One of the firsts to its credit is the launching of ‘Fair and Handsome’ fairness cream for men in 2005. Extensive research was carried out before the product was introduced in the market.
The results were astonishing: many men were interested in personal grooming and were closet users of women’s fairness creams. It was only natural, then, that the company tapped into a market just waiting to be explored.
Fair and Handsome was the first fairness cream in India customised for men. Endorsed by Shah Rukh Khan, it proved to be hugely popular. Emami claims that it did not just introduce a product, it created a new category (However, it attracted controversy for ‘perpetuating racism’).
Emami has always advertised aggressively by using celebrities as brand ambassadors, from film stars (Amitabh Bachchan) to cricketers (Sachin Tendulkar). It was not just for product positioning but also for attracting rural consumers.
Actress Madhuri Dixit was roped in to endorse a complete range of cosmetics. As the range incorporated her inputs, she was made a co-owner of the brand titled ‘Beauty Secrets by Madhuri’. This was a first in brand history: an endorser co-owning the brand she promoted.
Looking at numbers
Emami is still headquartered at Kolkata. It has 33 depots, more than 2,500 distributors and above 40 lakh retail outlets. All of its seven manufacturing units are ISO 9001:2000 certified and GMP compliant. It has five warehouses and an R&D centre at Kolkata. Its Internal Audit Division has been awarded ISO 9001:2008 accreditations.
But this company isn’t just restricted to India. It has nine international subsidiaries and a presence in more than 60 countries. The international business is said to contribute around 14 per cent of total revenues. One of the reasons for the brand’s international popularity is product positioning based on the needs of different countries (localising the brand).
The Emami Group has a presence in diverse sectors ranging from newsprint and ball pen tips manufacturing to cement and bio-diesel. Emami Ltd., the flagship company of the Emami Group, recorded a turnover of ₹2,624 crores in 2015-16.
It is said to be one of India’s few debt-free companies with strong annual cash flow. It is also claimed that over the last 40 years, Emami did not have a single day of labour unrest.
In 2015, Emami was ranked in the first ever ‘Super 50’ listing of Indian Public Companies by Forbes Magazine. The founders’ 60 years of friendship, 40 of them as business partners, has proved the adage ‘Never do business with friends’ spectacularly wrong.