Dabur adopts kiranas as part of its Parivaar

At a time when local kirana stores are feeling threatened by organised retail players, homegrown major Dabur has embarked on an initiative to partner neighbourhood shops by offering higher margins to drive volumes in the highly competitive FMCG segment.

Through a programme christened 'Parivaar', Dabur India aims to generate revenues of up to Rs 120 crore from about 12,000 grocery stores across the country by the end of this fiscal.

"In the first phase, about 5,000 key grocery outlets across 15 major cities will be covered. By the end of the current fiscal, the number of Parivaar outlets is expected to reach 12,000 to account for 8 per cent of our consumer care division sales," V S Sitaram, executive director (marketing) of Dabur's consumer care division, said.

Dabur will offer these stores higher margins.

The company will buy shelf space at these key grocery stores and provide other collateral support like advertising to push Dabur products, Sitaram said.

Special discounts, gifts, scratch cards would also be offered under the scheme, he said.

Dabur would also offer retail solutions and merchandise to shopkeepers and invest in creative elements at the outlets.

Last fiscal, the consumer care division clocked sales of Rs 1,520 crore which constituted 68 per cent of the company's total sales of Rs 2,234 crore. Sales from modern retail contributed three per cent.

Sitaram, however, pointed out that while focusing on kirana stores, Dabur is also strengthening its modern retail channel.

"Currently three per cent of Dabur's sale comes from modern trade. This will go up to 7.5 per cent in the near future and would translate into sizeable revenue per year," he said. According to industry estimates, there are 13 million retailers across the country, which includes 6.5 million grocery stores.

"Given the sheer base of the grocer channel, engagement with kirana outlets has become imperative for Indian FMCG companies. The importance of neighbourhood stores and traditional trade would still remain," Sitaram said.