FMCG companies witnessed strong
double-digit growth on the e-commerce channel in FY23,
emerging as a standout performer.
Contribution of the e-commerce
channel to overall sales has surged for consumer goods companies in
post-pandemic times and for some it has now scaled up to 9-10 per cent.
In an earlier interaction with businessline, Suresh
Narayanan, Chairman & Managing Director, Nestle India, said, “E-commerce
channel’s contribution to domestic sales for us was less than 1 per cent in
2016 and it has now grown to about 7 per cent. E-commerce channel grew by
about 40 per cent in the March quarter. More than half of this growth came from
quick commerce. We see e-commerce as a
promising channel especially for some of the smaller categories of the company
because it enables us to strengthen availability.”
Recently, ITC in its earnings
statement said that FMCG sales through the e-commerce channel stood at “4.7x
over FY 2019-20 levels taking its channel salience to over 10 per cent.”
For Tata Consumer Products Ltd, e-commerce channel grew 32 per cent in FY23
and its contribution to India revenues (excluding NourishCo) stood at 9 per
cent. On an earnings call in April, Sunil D’Souza, MD and CEO, Tata Consumer
Products Ltd, said, “The beauty of e-commerce channel is that it allows us to
pilot all our innovations and figure out what’s working, what’s not.”
Besides banking on online
marketplaces, companies such as Nestle, ITC and Tata Consumer Products also
have their own
direct-to-consumer platforms.
Marico too said it clocked double-digit growth on e-commerce. “Modern Trade and E-commerce contribution to domestic sales went up to about 29 per cent in FY23,” the company added.