Initially, it was a slew of start-ups which were directly selling goods to consumers through their own independent e-commerce channels, but that’s no longer the case. Large fast-moving consumer goods (FMCG) companies, have also joined the bandwagon. For instance, as part of its renewed strategy Tata Consumer Products launched premium products such as 1868 by TATA Tea – a luxury tea range; Sonnets – a premium roast and ground coffee range under Tata Coffee and Eight O’Clock coffee, a gourmet American coffee brand, to be sold through it D2C channel. “For an FMCG catering to mass segments, the online channel is still single digit in terms of contribution to the overall but is the fastest-growing channel in recent times. Going forward, we see D2C as a key element of the marketing mix for some of our brands, especially for premium and curated offerings,” Puneet Das, president – packaged beverages, India and South Asia, Tata Consumer Products, told BrandWagon Online. The company also has plans to scale up its D2C platform Tata Nutrikorner, which currently caters to customers in Delhi/NCR and Mumbai.
Meanwhile, FMCG firm Marico, aims to achieve a turnover ranging between Rs 450-500 crore by FY24 on the back of digital-first brands such as Beardo, Just Herbs (acquired recently), Coco Soul and Pure Sense from its D2C portfolio. The company also launched its own D2C platform ‘Saffola Stores’ during the pandemic. “We have observed that consumers prefer to purchase through online channels. Consequently, our e-commerce sales soared and currently contribute 8% of the overall domestic business. We believe that digital is a key pivot for consumer-facing businesses today,” Sanjay Mishra, chief operating officer, India sales and CEO, new business, Marico Limited, added.
According to a report by investment firm Avendus Capital, the direct-to-consumer segment could have a $100 billion addressable market by 2025. Industry experts believe that the D2C channel helps build a consumer connect as companies are able to leverage data by interacting with consumers directly. “For FMCG brands, this channel will be used primarily for getting consumers’ feedback rather than driving sales. Being omni-channel is important for brands across categories today. Even for brands that are D2C first, will need to look at an omnichannel strategy. After a point of time, it’s difficult to remain online and scale,” Harsha Razdan, partner, head, consumer markets and internet business, KPMG India, explained.
For Gulraj Bhatia, president, healthcare division, Emami Limited, sales from the online channels have been growing rapidly and this trend will continue in the future. “We have been growing our consumer franchise on Zanducare, our D2C platform business and have seen a very positive response from consumers across various product segments. The D2C channel has a faster growth rate compared to our other traditional channels,” he added.
With safety and convenience emerging as top priorities for consumers today, it is believed that the direct-to-consumer approach is going to emerge as a new source of competitive advantage for customer acquisition, personalised offerings as well as retention through constant consumer feedback.
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