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Robust distribution network to help boost sales and market share

Jyothy Lab Ltd's (JLL) direct reach has crossed 1.2 million outlets in FY24 from 1.1 million outlets in FY23. The company will continue to increase its direct distribution by 8-10% in the coming years, adding up and around 1 lakh outlets every year. A few years ago, the company upgraded to the Distributor Management System (DMS), which substantially enhanced sales efficiency as well as led to an increase in secondary sales, thereby, benefitting both the company and the distributors. Additionally, JLL implemented the CRS (Continuous Replenishment System) module, which would help automatically replenish the required quantity of a stock whenever it would fall below a specified level. This much improved automation would enable effective streamlining and acceleration of processes, thereby, even reducing costs. The company recently migrated its DMS from Adhaar Software to Botree, which would produce better reports and have benefits that will be evident in FY25.

Strategic Initiatives to enhance brand awareness and boost visibility

JLL has been focusing extensively on advertising and promotion in order to enhance brand awareness. Some key drivers of their brand strategy include ATL (Above-The-Line) investments across states to maximize sales, change in SKU (Stock Keeping Unit) mix with sustained focus on small packs, and continued promotions on social media by renowned celebrities strategically selected as per the TG (Target Group). The company’s biggest strength lies in its consumer focused brand equity, and have subsequently increased the level of consumer engagement through focus on various digital mediums.

Resurgence of Rural Demand

Consumer spending was influenced by inflation in the previous year, which has been reflected by consumers shifting to smaller packs. Therefore, JLL prioritizes increasing sales of low-unit packs to reach new customers, particularly in rural and relatively weaker parts of North and West India, which could potentially propel a volume-led growth in the coming years. Additionally, the FMCG industry has begun witnessing green shoots in rural demand recovery. Forecast of normal monsoons and softening of inflationary pressures bodes well for rural consumption uptick. The company has been continually focusing on improving ‘van coverage’ in rural markets. This rural marketing strategy not only enhances brand awareness, but is also extremely cost-effective for any company.

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