Online sales for FMCG to hit double-digits soon | Economic Times

Ecommerce contribution at FMCG companies will hit the double-digit mark within a year in the fastest adoption of online sales across categories despite the easing of curbs, pointing to altered purchase patterns for daily-use items hitherto sold largely by either large-format supermarkets or tiny mom-and-pop neighbourhood stores."The pandemic has accelerated ecommerce transition by five years in India; we find that the Indian consumer has got very comfortable transacting online and within 6-12 months, we expect ecommerce contribution to hit double digits," said Tata Consumer managing director Sunil D'Souza.This share compares with a 2.5% contribution pre-Covid.The noticeable change in buying behaviour is leading the likes of Nestle, ITC, Britannia, Dabur, Emami, Marico and Tata Consumer, among others, to push exclusive packs through ecommerce channels and increase consumer promotion spends. Even traditional companies are setting up their own online sales platforms for consumer engagement, and ecommerce players are pushing record quick deliveries.Dabur said in its June-quarter investor call that it is working on building a direct-to-consumer business, boosted by the high potential of sales through ecommerce which has tripled within the pandemic months."With ecommerce emerging as the most-preferred contactless method of making purchases in the post-Covid world, its salience has grown to 6% now from around 2% a year back," said Dabur chief executive Mohit Malhotra.The maker of Vaitka hair-care and Chyawanprash expects strong growth potential for the channel in the medium to long term even though Malhotra said with mobility improving, shopping behaviour would witness rebalancing in the current quarter.Dabur has upped digital spends to 24% in the first quarter of this fiscal, compared with 13% a year ago."We will continue to look at ecommerce as the innovation cradle for our power brands and the coming months will see a number of new product and format innovations being rolled out in ecommerce, where we will build up scale and then roll out these products in other channels," Malhotra said.Britannia managing director Varun Berry said in a statement earlier this month that ecommerce sales would more than double and that it will work more closely with partners in the channel."We recognise that ecommerce today has become the channel of choice for many, which led to us launching our exclusive ecommerce business, Zanducare," said Emami director Harsha Agarwal in a post earnings statement. Nestle, too, reported 105% growth through ecommerce channels in the June quarter.Last week, PepsiCo extended its partnership with the government-backed hyper-local ecommerce platform CSC Grameen eStore to push last-mile delivery and digital ordering for its brands Lay's, Kurkure and Quaker, among others.A report by Bain & Company released Tuesday said the India e-retail market could overtake growth of modern trade over the next five years, expanding at 30% and reach $120-140 billion by 2026.Online grocery platform Grofers upped the ante on Tuesday by announcing plans for 10-minute delivery time in 10 cities.