The Hindu Business Line : ITC mulls retail entry in urban, semi-urban markets

After launching its e-Choupal retail stores in rural India, ITC is now looking at new retailing opportunities in the semi-urban and urban markets. “As we have got a foothold into rural retail, there is a possibility that we could also look at urban retail. This would be at the mass-end and we would be stocking products from other companies as well,” said a senior official from ITC.

Considering ITC has already made a foray at the top-end of the retailing spectrum with its Wills Lifestyle stores, scaling it down with more mass products especially in the FMCG space in urban and semi-urban markets is a possibility currently being explored by the retail and consumer products company.

“The urban retail stores would be similar to the existing e-Choupal stores. These would be mega-stores and we would be stocking products from different companies including our own,” stated the official.

Products in market

At the same time, ITC is waiting to see how it performs in the personal products segment. It has made a foray into the personal care segment with Fiama Di Wills shampoos, soaps and shower gels, Vivel Di Wills and Vivel soaps, as well as Superia shampoos and soaps. This is in addition to the super premium Essenza Di Wills portfolio.

Aggressive marketing

“Our urban retailing foray would be linked to the performance of the company in foods and personal products. At the moment we are trying to get more aggressive with modern trade in the urban markets and will be also partnering with the retailers going forward,” said the official.

Currently, it is FMCG stalwarts such as P&G and HUL who have an advantage with their wide portfolio and market share. However, ITC believes it now has more negotiating power in modern trade with its extended product portfolio. “Getting shelf space in modern trade outlets is linked to market share. We are now getting serious with our new business and fighting for more shelf space with our new brands,” claimed the ITC official.

Convincing the trade

Convincing modern day retailers with the track record of its existing brands in the foods business, ITC is leveraging the strength of its food brands to gain a foothold with its new personal products range. “Be it our Aashirvaad brand, where we are the leader in atta, or in biscuits where we are a close number three player, today we have six brands and 80 SKUs (stock keeping units), and this is what we are telling the modern trade to get more shelf space,” said the official.

Besides partnering with retailers to give them added incentives will also be initiated by the company. “Just like HUL has its Super Value stores concept, we would be also partnering with retailers. It is a necessity to partner with retailers and once we have a sizeable business in personal products we would be in a position to give retailers more margins,” said the official.

According to the company, new FMCG businesses have clocked 68 per cent growth during 2006-07.

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