Betting on rising digital commerce, Marico is looking to acquire direct-to-consumer (D2C) companies in the personal care and food segment.
The company that acquired stakes in Just Herbs, Beardo and True Elements in the domestic market has witnessed a steady business increase and volume growth by D2C brands ahead of the set targets made during acquisitions.
“We are open for acquisitions in both personal care and food. We keep scouting markets more in the personal care space because in the food category, we have our portfolio as well. However, if any business is complementary and Saffola cannot extend itself, then we will also be looking at acquisitions. For example, in the case of True Elements, the kind of pricing and consumers it talks to are very different from Saffola consumers,” Pawan Agrawal, CFO, told businessline.
Give some, take some
The company acquired a stake in Beardo in 2017 and took control in 2020. It believes that acquisitions are mutually beneficial for the brands as well as the traditional FMCG companies.
“The whole idea was to understand how the ecosystem is growing. This helps us connect with the consumers digitally and to do digital marketing. (We want to) pick some of those learnings and apply them in some parts of our existing portfolio — that is the whole idea of getting into the D2C space... We have done three acquisitions and all have done well compared to what we had assumed during the acquisitions,“ Agrawal added.
Another FMCG major Hindustan Unilever (HUL) also recently acquired D2C companies, OZiva and Wellbeing Nutrition. businessline had earlier reported that investments into the D2C space continue to flow in as funding has dried up for start-ups in general.
According to data from Tracxn, a market intelligence and analytics platform, D2C brands received $796.8 million in investment in FY22 and $363.3 million in FY21.