Keen to be no.1 in FMCG, ITC seeks the e-commerce edge

ITC is set to become one of the first frontline FMCG companies to start its own e-commerce operation for premium and niche products as it seeks to expand market share in the fast growing online sales segment and ensure wider availability of products, executive director B Sumant said.
A recent report by Nielsen says e-commerce share in total FMCG sales in India has tripled over last two years with 98% of Indian consumers with access to internet having made an online purchase. The conglomerate will sell both food and non-food FMCG products from the recently launched e-store, itcstore.in, where it is currently undertaking a pilot to sell gourmet chocolates, Fabelle. Sumant said ITC’s online store will be limited to metros that account for the largest share of consumption of premium and niche FMCG products for now. The store will complement its efforts to sell through online channel partners and marketplaces. ITC has also launched an e-store and an app for stationary products.

“ITC plans to sell premium and niche FMCG products to discerning consumers through the e-store. Based on the success in major metros, we may scale it up later to other cities,” Sumant said. The online store will initially sell in Delhi-NCR, Mumbai, Chennai, Bengaluru, Hyderabad and Kolkata.

ITC intends to sell its premium skincare range Dermafique, Sunbean Gourmet Coffee, blended atta sold under Aashirvaad brand and products which are currently sold in limited markets or have a niche appeal, such as ghee, rice and protein biscuits.

The company will also sell a range of functional food such as products targeted at diabetics and those with metabolic disorders and health food such as millet and ragi flour, which it will launch in the next few quarters. The fulfilment of orders will be done by a distributor, while ITC will tie-up with third-party logistic providers who are already operating in the ecommerce space.

ITC currently sells through trade partners on platforms like Amazon, Flipkart, Grofers and Big Basket. The move to expand into direct online sales is not due to the recent disruption in operations in large e-commerce marketplaces, but to expand its reach and ensure products are never out of stock for online shoppers.

ITC also runs direct e-commerce operations for its lifestyle apparel business, WLS and John Players. It has recently started online sales of Classmate notebooks and other stationery products with the pilot operational in Bengaluru, Chennai and Kolkata. This platform allows consumers across the country to customise the covers of their Classmate note books, which are then printed and delivered to them, said Sumant.

ITC is aspiring to become India’s largest pure-play FMCG firm by 2030 across products like packaged food, personal care and stationary which account for Rs 1 lakh crore in revenue. In 2017-18, the non-cigarette FMCG business revenue was Rs 11,328 crore, while the business gross profit nearly quintupled to Rs 164 crore.