ITC to ramp up e-store offerings

Abhishek Law Kolkata | Updated on August 03, 2021

The company plans to increase spread to 14 cities over the next few quarters, from the current 11

Buoyed by rising online sales, diversified conglomerate ITC Ltd will ramp up the direct-to-consumer play through its own e-store. Over 800 products have been listed on ‘ITC e-store’ across 45 categories and the company is planning to increase spread to 14 cities over the next few quarters, up from the current 11.

Digital-first launches and customisation features are being looked into wherever possible.

In FY21, e-commerce accounted for approximately 5 per cent of sale of the non-cigarette fast moving consumer goods portfolio. Larger packs, bundling and exclusive launches drove up numbers, particularly in discretionary items like shower gels, snacks and juices.

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As e-com sales gained traction through listings on Amazon and others, ITC decided to expand the scope of its own e-store, said sources. It piloted the e-store first among employees in 2019 and rolled it out at a D2C level in October 2020 to address the emerging needs of consumers. Launches began with metros before moving into Tier-1 cities.

The platform’s key objective was to showcase and offer ITC’s entire range of differentiated products under one roof.

For the June quarter, e-com channel sales more than doubled YoY year-on-year, taking its share to 8 per cent of “segment revenues'" (FMCG-others). It recorded a 3.7 per cent growth during the same year-ago period.

In Q1FY22, ‘FMCG-others’ reported 10.4 per cent jump in revenues y-o-y to ₹3,726 crore.

Anticipating customer preference

According to B Sumant, Executive Director, ITC Ltd anticipated an increase in consumer preference for contactless shopping and home-delivery. It “proactively engaged with e-com platforms” and “aligned the supply chain” to service emerging demand.

“We worked extensively with all e-commerce partners and ensured robust category planning and improvements in marketing mix across platforms. Our first-of-its-kind direct to consumer platform ITC e-Store also got strengthened with 800 differentiated products across 45 plus categories”.

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Availability of offerings like Aashirvaad’s value added portfolio such as the organic and multi-grain atta, Aashirvaad Svasti Ghee, ITC Master Chef frozen snacks and cooking pastes, Fabelle luxury chocolates, Savlon hygiene products, among others, were ramped up across ITC e-store over the last few quarters.

Alternate model

The company partnered with micro-delivery platform Dunzo, and grocery seller Bigbasket and even with ‘Wow! Momo’ to supply sanitisers and grocery essentials during the first wave of the Covid pandemic.

Subsequently, ITC leveraged other digital technologies to drive productivity, includingeB2B app and virtual salesman app platforms that facilitate digital ordering.

On the direct-to-consumer segment, it introduced WhatsApp-based chatbot (ITC Storelocator) to enable easier access. Alternate delivery models and use of other channels (ITC Store-on-Wheels) were executed, the company said in an investor presentation. ‘Store-on-Wheels’ reached out to 900 residential complexes across 13 cities in the last one year.

According to industry sources, sales through the company’s online portal and other platforms in the non-cigarette FMCG grew by 20.1 per cent for the “top six metro cities in April-May this year”.

“The robustness of ITC’s FMCG strategy is evident in substantial margin expansion of 640 bps in segment EBITDA (of FMCG-others) over the last four years,” the company said in its annual report.

Published on August 03, 2021

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