FMCG firm Godrej Consumer Products Ltd (GCPL) is strengthening its e-commerce vertical as an independent business unit in India, in the wake of COVID-19 fuelling widespread acceleration in digital adoption, according to company Chairperson and Managing Director Nisaba Godrej.
The company is leveraging on data and technology, innovating for local contexts and doubling down on digitisation and platforms like e-commerce to catch the rapid shifts in consumer behaviour brought about by the pandemic.
It is also launching digital-native brands, experimenting with premium niche categories and scaling up its direct engagement with customers through direct-to-consumer (D2C) channels.
"Innovations and startup efforts in FMCG last mile distribution are changing the sales and distribution landscape. Recent shifts in consumer behaviour, especially on digital, have opened up multiple opportunities to scale and transform how we do business," Godrej wrote in her address to shareholders in the company's annual report for 2020-21.
Stating that the widespread acceleration in digital adoption has propelled GCPL's ''digital ambitions'', she said, "We are strengthening our e-commerce businesses."
In India, GCPL has set up an independent e-commerce business unit with separate profit and loss (P&L) accountability and fully functional capabilities across sales, marketing, innovation, and supply chain.
"We are doing this because we do not see e-commerce as a channel in the future, but a separate business with a comprehensive approach to the entire consumer journey," she added.
GCPL is leveraging data and technology, innovating for local contexts, and building more agility across multiple routes to market.
"We are doubling down on digitisation and platforms like e-commerce and chemists," Godrej added.
At the same time, she said the pandemic has refocused attention on last-mile distribution and neighbourhood convenience stores.
"New models will be omnichannel, straddling the pyramid of online and offline, and we are building capabilities to serve this," she added.
In markets such as Indonesia and the USA, GCPL's e-commerce businesses have grown significantly post-COVID-19.
"Our Africa business is crafting an e-business function, combining digital marketing and e-commerce. In Latin America, we have a new e-commerce team," she said, adding "these structures are designed to allow for agility and consumer focus, including e-commerce-focused product innovation."
GCPL is also launching digital-native brands and is experimenting with premium niche categories as it tries to reach more consumers through its D2C platforms.
"In India and Nigeria, we have experimented with these platforms, which are now being scaled up. We are also investing in data-driven marketing for rich actionable consumer insights, partnering on digital brand advocacy, and creating online brand communities," Godrej said.
Terming the fiscal as "our busiest year on new product development and digitisation", she said, "we are creating new growth vectors for the future, refreshing how we go to market, and embedding analytics for sharper decision making".
Now the company is listening "more intently" to its people on the ground, especially in sales and manufacturing, she added.
The Godrej group firm is also building hygiene as a "big and holistic" category for the company, the segment which has witnessed a faster growth after the pandemic.
With brands like Protekt and Saniter, it has gone much beyond the soap bar in the segment and launched 10 new products in the hygiene segment.
On the overall business, Godrej said from a geography prospective, India and Latin America were strong during the year for the company, while it is seeing a turnaround in its business at Africa.
"We doubled down on the resurgence of household insecticides, our largest and most critical category. Household insecticides delivered 15 per cent growth globally, backed by strong innovation and full portfolio across formats and price points," she said.
During the COVID-19, GCPL introduced a range of hygiene products.
"We built this momentum to develop full hygiene portfolios with multiple products across countries, resulting in hygiene (including soaps) growing by 24 per cent," she added.
However, she also added that performance in Indonesia, its biggest overseas market, was "disappointing".
For the financial year ended on March 31, 2021, GCPL's consolidated operating revenue was at Rs 11,028 crore, up 11.28 per cent.
Its revenue from India was up 14.25 per cent to Rs 6,254.33 crore, while Indonesia was up 4.37 per cent to Rs 1,770.02 crore. Africa (including Strength of Nature) market was at Rs 2,498.53 crore and others at Rs 665.93 crore.
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