Direct-to-Consumer (D2C) companies will need to tie up with FMCG companies as partners or sell out if they want to expand in the offline marketplace, believes Marico’s founder, Harsh Mariwala.
Mariwala stated that Marico is looking at D2C companies as an opportunity.
“We have acquired three brands and will acquire some more. We also have our D2C brands, which are housed and managed differently. At some stage, when they become big, you have to use the existing distribution infrastructure to roll out the products,” said Harsh Mariwala to businessline.
Distribution network
The distribution channel for a D2C brand is a drawback for increasing product penetration in rural market areas.
“The biggest hindrance to a D2C brand is its distribution network. Either they can create their own distribution network if they can become big, and if they can’t, they will be forced to sell out. At some stage they will start feeling the pinch of moving offline; that is where they need to either tie up with somebody or sell out,” said Mariwala.
When asked if D2C brands could impact traditional FMCG players, he said, “At this stage, one can’t say that they would impact, but it could be in the future depending on what they offer.”
Marico is further looking to expand its international business with a growing product portfolio for the Middle East and North Africa (MENA) regions. In December, the company acquired the personal care brands “Purité de Prôvence” and “Ôliv” to expand its presence in the female grooming portfolio in the Vietnamese market.