Prompted by the Covid-19 induced lockdown, several FMCG companies from Dabur and ITC to Mondelez and Marico are using e-commerce platforms to launch products before making them available in traditional retail shops.
While this has resulted in the increase of e-commerce share of FMCG sales, marketers said the online-only or online-first strategy work well for slightly niche or premium brands which may not find much traction in offline shops.
E-commerce, which accounts for 3% of overall FMCG sales in India, however, is the fastest growing channel and witnessed a growth of 56% in the first quarter (January, February & May) and 38% in June, showed data from market research company, Nielsen.
Homegrown FMCG major, Dabur, for instance, has launched an entire Ayurveda baby care range, which will be sold only on e-commerce platforms. Others, such as, Marico are also launching products meant for online sales.
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The recent Amazon Prime Day sale saw 100 brands launch thousand products online first.Saurabh Srivastava – Director Category Management Amazon India
“We have already seen our e-commerce business more than doubling,” said Mohit Malhotra, CEO at Dabur India. “In Q1 of 2020-21 fiscal alone, our e-commerce business has grown to almost 3.5 times as compared to the base quarter and today has a saliency of 5.6% as compared to 1.5% in Q1 FY 2019-20.”
Sanjiv Puri, chairman and MD at cigarettes-to-biscuits conglomerate, ITC, said the Kolkata-headquartered company’s e-commerce sales has witnessed 100% growth and currently accounts for over 4% of its overall sales compared to only 2% in 2019.
Others, such as, Marico, too, witnessed something similar. Since March 2020, the company rolled out new products, including Veggie Clean, the KeepSafe personal care range and the Protect range of disinfectant sprays—all of which are widely available across e-commerce platforms along with modern trade.
“We have consistently focused on e-commerce as a channel of growth and it grew by 43% in FY20. In Q1, e-commerce grew 37% as the channel gained salience at an even faster pace,” a Marico India spokesperson told TOI.
Mondelez, maker of Cadbury chocolate and Oreo cookies, launched Cadbury Choco-bakes Choc Layered Cakes, which debuted on Grofers before being made available across traditional channels.
“We have been making significant strides in changing the nature of our product launches and further consolidating our pathway through a slew of digital-first introductions by leveraging our long-standing relations with online platforms such as Amazon and Grofers,” – Parveen Dalal, sales director at Mondelez India.
For e-commerce platforms, such as, Amazon, Flipkart, Grofers and BigBasket, this has meant a wider net for customers looking for niche products. Check here to know what they feel about it
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