For FMCG firms, e-commerce is no longer an option. It's an imperative

NEW DELHI: Large Indian FMCG companies said they expect e-commerce sales to continue growing faster than other retail channels even with the economy moving towards normalcy driven by convenience and better pricing.“E-commerce is serving us well – both during the lockdown and now as the country is normalising. We believe that channel is the new norm as people choose to stay at home more, and we clearly see a huge opportunity in this space,” a spokesperson for Hindustan Unilever, India’s largest fast moving consumer goods company, which sells Dove soap and Lipton tea said. He said e-commerce now is about 6% of HUL’s sales compared to 3-4% pre-Covid.A spokesperson for ITC, which makes staples, packaged biscuits, frozen foods, shampoo and deodorants, said the company’s e-commerce sales have almost doubled from 2.6% in 2019-20 to 5% by 2020-end. “E-commerce has witnessed accelerated growth as new shoppers increasingly switched to online shopping and digital penetration improved. The average number of items bought and average bill value went up propelling e-commerce on a faster growth trajectory,” an ITC spokesperson said in an email revert.In the fifth edition of its FMCG forecast, researcher Nielsen said e-commerce contributes 3% to overall FMCG sales in India, but that the pandemic would change that as more shoppers take to online purchases.“During the peak lockdown months, e-commerce was being driven by convenience. Now it’s better pricing, promotions and deals which have been further catalysed by players like JioMart. We expect that momentum to accelerate,” said the country’s largest biscuits maker Parle Products category head Mayank Shah. The Reliance Industries-owned JioMart, which started with a beta launch in December 2019, was launched for consumers in May amid the lockdown and is processing 500,000 orders per day on average, a Jio Platforms official said last month at a Facebook event.Beverage and snacks maker PepsiCo, which has inked partnerships with Swiggy and Dunzo to set up e-stores for its brands Lay’s and Kurkure, and with Common Service Centres (CSC) for e-stores focused on rural markets, said e-commerce will remain a core focus area. “With increased usage of digital platforms across the country, PepsiCo will continue to innovate its e-commerce as well as modern supply chain to keep up with the evolving needs of the consumer,” a company spokesperson said.The pandemic-induced digital adoption has also led companies like PepsiCo, Nivea, ITC, P&G, Marico and Bisleri to launch their own web stores in India mainly to monitor shopping trends, test new launches and build brand loyalty programmes though sales through these company-owned webstores in India remain minuscule compared to established platforms like Amazon Fresh and Pantry, Flipkart, Bigbasket, Milkbasket and Grofers.Skin-care brand Nivea, which recently launched its own webstore, said it is serving orders in close to 17,000 pin codes across India. Nivea marketing director Sachin Killawala said: “This website is in continuation of our larger digitalisation objective of our e-commerce and omni channel sales, supply chain forecasting, ready-to-ship packaging development and digital mapping.”Company executives said while the growth in e-commerce is not coming at the cost of neighbourhood stores or kiranas which are rapidly adopting to digitisation, modern trade would take some more time to pick up. “Modern trade was adversely impacted because of the lockdown and restricted movement of people. We expect the modern trade business to pick up progressively,” the HUL spokesperson said.

from Economic Times https://ift.tt/3o9BWL7