Dr.G.R.Balakrishnan 22-05-2023 Logistics (Supply Chain Management)

FMCG companies see double-digit growth on e-commerce in FY23

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.