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FMCG players not keen on starting e-commerce portals

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Even though FMCG players have started selling products on e-commerce websites like Snapdeal, Flipkart and Amazon India to keep up with the new-age retailing, they are not keen on launching their own portals to sell the products

Sharleen D’Souza

Even though FMCG players have started selling products on e-commerce websites like Snapdeal, Flipkart and Amazon India to keep up with the new-age retailing, they are not keen on launching their own portals to sell the products. These companies see more sense in partnering with the existing online channels rather than setting up their own channels.

Godrej Consumer Products, for instance, has tied up with Snapdeal, but does not plan to start an e-commerce venture as of now. “Our approach will be to play to our strengths of building brands. We will look to partner with e-commerce marketplaces, rather than launch our own portal. We have set up a dedicated e-commerce team and are partnering with major market places,” said Vivek Gambhir, MD of Godrej Consumer Products. By 2020, Godrej Consumer Products expects 5-8% of FMCG sales coming from online channels.

“As we see it, e-commerce, particularly mobile commerce (m-commerce), will take off faster than what people expect. In many other markets across the world, retail evolved from traditional trade to modern retail and then to e-commerce. In India, we expect retail to leapfrog from traditional trade to m-commerce. The potential is tremendous,” said Gambhir.

On the other hand, Dabur India has launched four portals and is also selling products on Flipkart and Amazon India. “We are working with multiple partners across the categories to sell our products online. In addition, special e-commerce portals have been created for products like gift packs and energisers,” said a Dabur India spokesperson.

“Though existing players like Flipkart and Snapdeal will have the first-mover advantage, no one is late. FMCG players can still start now as they already have a dedicated customer base which they have built over the years,” said Prashant Agarwal, joint MD at Wazir Advisors.

Marico India’s products are also available on the major e-commerce websites like Amazon India and Flipkart. Hindustan Unilever is said to be working on plan to launch its e-commerce channel. Some of the company’s products are available on Flipkart and Amazon India.

According to a report by Bain & Company and Google, in India three categories are likely to see rapid growth by 2020 — Infant care (25%-30%), male grooming (20%-25%) and beauty (8%-10%).

The report also said that while digital is a high priority for most FMCG companies, many are still hesitant to engage. Four main barriers block the way: economic and logistical challenges, insufficient metrics, lack of appropriate talent and poor infrastructure support.

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