Consumer goods firms wary of e-commerce boom

Consumer goods companies are becoming reluctant to sell their wares through pure-play e-commerce sites. Most of them now prefer to engage with consumers through their respective online offerings in a bid to find a “fine balance” between the online and offline channels.

Durable brands LG and Nikon now appear only occasionally on popular e-commerce sites such as Flipkart. The companies are clearly avoiding online channels. Apparel brand Van Heusen has restricted its customised tailoring brand, My Fit, to Aditya Birla Group’s company website Trendin.com. With expertise in the e-commerce category and e-commerce players being unable to offer after-sales services, consumer goods companies now choose their own domain sites.

Besides, the companies should also take precautions not to alienate offline retailers as they continue to form the backbone of their sales strategy.

“There is business pressure on companies to be a part of the online euphoria. Some of them end up doing it discreetly as they do not want to upset their offline vendors and have to maintain a fine balance between the two channels,” says Vishal Tripathi, Principal Research Analyst at Gartner.

LG India uses its own company site as a catalogue and believes selling online is avoidable. “We do not have an online policy as we have the support of our 20,000 odd brick-and-mortar points of sale,” says Saurabh Baisakhia, Business Head, ACs, LG India. “ACs are not a plug and play product and has to be driven by services like installation and specific tonnage capacity.”

Imaging company Canon has a ‘fickle’ policy when it comes to online sales. “In the case of our cameras, we go for online sales only if we have the right products. It’s an ‘on and off’ policy and sometimes we do it through partners who sell it for us on sites like Flipkart,” says an official from Canon India.

Apparel brand Van Heusen says it cannot sell its customised tailoring brand ‘My Fit’ through other e-commerce players as they do not have manufacturing capabilities.

“With My Fit, we want to marry our physical stores with the digital world through our group’s own site and it will not be a discounted offering,” says Vinay Bhopatkar, Brand Head, Van Heusen. The brand has 250 stores across 100 cities.

According to Jai Subramaniam, Director, Shop 4 Solutions, a retail consultancy firm, transaction sites such as Amazon and Flipkart cannot offer the benefits of after-sales services. “They tend to lack focus and knowledge at the product level. Durable companies would rather serve consumers directly and believe they will get the pricing power by doing it themselves through their service-oriented approach.”

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