Nestlé India recorded a strong performance in the ‘e-commerce’ channel which grew by 122 per cent in Q2 and now contributes 3.6 per cent to domestic sales.
Even as the country’s household consumption tumbles due to the coronavirus pandemic and subsequent lockdowns, the online sales of Nestlé India more than doubled in the second quarter. We delivered a strong performance in the ‘e-commerce’ channel which grew by 122 per cent this quarter and now contributes 3.6 per cent to domestic sales, said Suresh Narayanan, Chairman and Managing Director, Nestlé India. While the sales of EVERYDAY Dairy Whitener, Nestlé a+ Milk, NESCAFÉ Classic, and NESCAFÉ Sunrise performed well throughout the quarter, MAGGI witnessed a solid growth towards the end of the quarter after initial supply constraints, Suresh Narayanan added.
Though the demand for ‘Out of Home’ consumption channels experienced a sharp decline due to the lockdown, Nestlé brands enjoyed trust, credibility, and strength in the “in home consumption” category, the company said. Total sales of Nestlé India increased by 2 per cent, out of which the domestic Sales increased by 2.6 per cent and export sales fell by 9.3 per cent. The FMCG company generated a net profit of Rs 487 crore in the April-June quarter.
The statement by the company showed that the sales were adversely impacted due to the coronavirus-induced lockdown, leading to production disruption across factories. Suresh Narayanan further said that the past three months have witnessed volatility, uncertainty, and stresses that were unimaginable. This led to disruptions across the value chain of the company that impacted Nestlé India’s results, he added.
Meanwhile, the company’s top official last year said that the company was planning to double the rural sales network and expected the contribution from e-commerce to rise. However, it also expected its out-of-home category, where, Nestle operates in segments such as coffee vending machines and some of the Maggi products, to become a growth driver but the pandemic came as a roadblock. However, the FMCG firm noted in its quarterly filing that relentless efforts, determined professional actions, and abiding teamwork have led to restoring its eight factories almost to their pre-COVID manufacturing capabilities.