Fast-moving consumer goods (FMCG) major Dabur India is moving fast to open an online platform where it might sell products of other companies, along with its own.
The platform might go live next year. It would sell ayuveda-based health care products, along with providing information on ailments and therapy. “It might also offer products from other key brands,” Sunil Duggal, chief executive officer, Dabur, told Business Standard.
Key players in the FMCG sector, such as Hindustan Unilever (HUL), ITC and Patanjali, currently offer products from some of their own brands through their online stores. None of them, however, offer products from other brands.
ITC and HUL had started with their online portals some time back.
HUL launched humara-shop.com as a pilot project to tap the grocery segment. Under its Hindustan Unilever Network model, the firm put forward Aviance and Lever Ayush range of health and beauty products.
Another FMCG behemoth, ITC, offers a range of ready-to-eat and ready-to-cook items through kitchenofindia.com. The firm has a dedicated portal — fmcgstore.itcportal.com — which helps consumers locate physical stores selling its branded goods.
The Patanjali group, too, has an online presence — patanjali-stores.com. It is also planning to add books and media items in the list.
Other players like Marico and Godrej, too, are working on expanding their sales through the online channel. Nestlé and Coca-Cola have been readily adapting to growing acceptance of online market places.
While, Nestlé reintroduced Maggi noodles last November on Snapdeal, Coca-Cola launched Coke Zero on Amazon in late-2014.
While, a majority of the online sales are expected to come from the existing e-commerce marketplaces, Duggal said specialised products, such as health care items sold over the counter need a dedicated channel. Online marketplaces like Amazon, Flipkart and Jabong lists FMCG goods in the grocery, personal and home care items. Companies like the Big Basket and Grofers concentrate on selling daily need items, such as food and vegetables.
Dabur is planning a two-pronged strategy - selling its products on all major e-commerce marketplaces and offering specialised products and advisory on its own platform. It currently offers products, advisory and consultancy services in beauty, health and wellness space through four dedicated portals - daburmediclub.com, liveveda.com, mybeautynaturally.com and daburdentalcare.com.
A recent study by CII and Boston Consulting Group (BCG) estimated that the FMCG sector was worth Rs 4,35,000 crore ($65 billion) in India. And, some 150 million consumers would be digitally influenced by 2020.
According Duggal, e-commerce was hugely important for firms such Dabur as in next three to five years, it may overtake sales from modern trade channels. Currently, Dabur generates 12 per cent of its Rs 5,750 crore domestic revenue from trade. “While, trade will continue to grow at 15-20 per cent per annum, e-commerce growth will be exponential in the coming years. While, the bulk of the business will come from general online platforms, specialised care is required when it comes to health care,” he said.
Duggal said, “We have tied up with most of the major e-commerce players and all our brands will be available on them. But that relationship has to be strengthened. We are trying to figure out how best we can leverage them.”
ON THE ROAD TO DO A FIRST
Dabur set to be the first FMCG firm to have an online marketplace that might sell products of other brands
Firms such as HUL, ITC and Patanjali too have online portals but they sell only in-house products
Dabur’s move is in line with the firm’s target of generating 75% of India revenue from Ayurvedic products by 2020
Currently, some 10-12% of Rs 4,35,000-crore FMCG sale takes place through modern trade; e-commerce remains at 2%
- The surging tide of e-commerce led Nestlé to re-launch Maggi on Snapdeal last year; Coca-Cola launched Coke Zero on Amazon