FMCG products slowly gaining traction in India's booming ecommerce market
NEW DELHI: Everyday consumer products such as shampoo, deodorants, makeup and even toilet cleaners are slowly gaining traction in the country's booming ecommerce market currently dominated by electronics, books and fashion.
While this growth is mostly powered by smaller FMCG companies with limited resources, big national brands too are increasing their presence in online shops not to miss out on the opportunity.
An Amazon India spokesperson said categories such as skincare, baby nursing, make-up, deodorants and grooming products have grown by more than five times in the past year.
This growth is mostly powered by companies without much distribution muscle, such as Khadi, Patanjali,Vini Cosmetics, Adjavis, Park Avenue and TTK. "Customers are now looking for unique brands that are sulphate and paraben-free like Indulekha, Iba Halal Care, Vedantika Herbals, Prakriti Herbals, Vaadi Herbals, etc," the spokesperson said.
Snapdeal expects the growth to be around 50 times in the coming three years. "Overall in ecommerce, we believe that after ticketing, electronics and fashion categories, FMCG is going to be the next wave that this industry would ride on. The beauty of this segment is that a customer exactly knows what his/her consumption patterns (brand & consumption rate) are, leading to regular repeat purchases," said a spokesperson of the company.
The ecommerce site is working directly with most of the FMCG players in the market including but not limited to HUL, P&G, ITC, R&B, L'Oreal, Godrej.
It sells close to 1,00,000 products in the category of which segments such as baby care products, sexual wellness, Cosmetics and skin care and health supplements are the most popular ones.
Other ecommerce majors such as Flipkart and eBay, too, are selling hair oil, shampoos and soaps. None of them responded to ET's questions on their FMCG sales as of press time.
Online shopping of grocery and personal care products is on the rise globally. A recent report by Kantar Worldpanel predicted that ecommerce for FMCG globally will increase 47% to $53 billion by 2016, up from $36 billion in 2014.
It also forecasted that ecommerce will account for 5.2% of global FMCG sales by 2016, up from 3.7%, and that Asia will be the next major growth market.
Most FMCG majors in India are looking to boost their online sales.
"Modern trade has not taken off the way it should have, so we are leapfrogging to online, which is expected to do very well because of cost savings," said Varun Berry, MD at biscuits maker Britannia Industries.
The company recently launched its Good Day Chunkies, a super-premium chocolate chip cookie, exclusively on Amazon. While Britannia sells directly on big online marketplaces and through its distributors on smaller ones, most others are encouraging their distributors and retailers to take the online route.
Dabur India has appointed exclusive stockists for the online channel. "Most online retailers prefer working with such dedicated servicing networks as the dynamics and logistics of online retailing are better understood by these specialist stockists," said George Angelo, executive director for sales at Dabur.
The maker of Dabur Chyawanprash and Real juice encourages its brick-and-mortar distributors to also sell online to augment sales. "We are taking an aggressive yet a measured approach to this channel as we evaluate and learn the finer aspects while leveraging the increasing consumer affinity towards this channel," Angelo said.
Many distributors and retailers of FMCG majors such as Hindustan Unilever, Procter & Gamble and Marico are taking the online route.
Kolkata-based Primarc Pecan Retail, for example, has ventured into retailing national and international FMCG products on online platforms such as Amazon. "We sell products from health and personal care, toys, gourmet and pet food on various market places," said company director Sidharth Pansari. The Rs 150-crore firm has been in the retail business for the last 25 years, selling products of large FMCG companies.
Siva Sri Retail, a Telangana-based distributor of skincare products of HUL and P&G, too, has been selling its products on Amazon and Flipkart for the last six months. "The learning has been great," said its owner Aravindan Jayakumar.
Internet giant Google had recently got several FMCG companies including Hindustan Unilever, Lakme, Paris India, Nivea, P&G, Reckitt & Benckiser and Johnson & Johnson to sample their products to a large set of customers during Google's Great Online Shopping Festival which saw nearly 80 lakh visitors during the three-day-long festival.
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