Companies

Mondelez bets big on e-commerce as online purchases gain traction

Abhishek Law Kolkata | Updated on September 10, 2020

Garima Dikshit, Head of E-Commerce at Mondelez India,

As online purchases and “contactless gifting” gain popularity, Mondelez India — the maker of Cadbury chocolates, Oreo biscuits and Bournvita health drinks — is ramping up its e-commerce play.

Large packs and customised gifting options apart, the company is eyeing online-specific SKUs and products.

The company’s products are now deliverable across 95 per cent of India’s pin codes through e-tailers, its own direct-to-consumer website (www.cadburygifting.in) and other delivery platforms.

According to Garima Dikshit, Head of E-Commerce at Mondelez India, the company saw “higher than normal demand” in the months of April and May, when people were pantry loading (because of the lockdown).

Post unlocking, there was an increase in adoption of online shopping, especially for FMCG offerings and groceries. And, for most FMCG companies, e-commerce sales have doubled on a y-o-y basis. Supply chains have normalised after the initial hiccups. An increase in demand was noticed for categories like biscuits, chocolates and health drinks.

Since the end of June, demand in the online channels “stabilised”; although it continues at much “higher levels” (than pre-Covid), with 50 per cent of the new users coming in from Tier-III cities (suburban towns).

“There is significant off-take in the online segment and pace of growth has more than doubled. E-commerce was a high growth business, pre-Covid and it peaked during the intense lockdown period. However, now there is some stabilisation happening. We expect online demand to be at elevated levels throughout this year,” Dikshit told BusinessLine.

Different consumer behaviour

Moreover, emerging occasions like in-home snacking and celebrations (including Zoom parties, or hosting Netflix nights) have led to rising “impulse purchases” of indulgent foods. Accordingly, Mondelez India identified the trends and came up with “customised packs” such as “birthday boxes” or “movie night snack boxes” with “portion controlled offerings”.

Larger packs are becoming popular with online buyers. Dikshit explains that offline buyers often make impulse buys (at supermarkets or kiranas) which could be smaller SKUs or at entry level prices. Things like displays facilitate such buying. In comparison, online shoppers build up a basket of selected products and prefer large packs.

“There are different triggers that work for an online shopper as against an offline one. We are exploring these triggers to ensure that online buyers’ interest sustains. Biscuits and chocolates are witnessing equally good traction with stable ASPs. We may not operate at entry level price points in the online space keeping in mind cost economics,” she said.

Incidentally, a substantial number of repeat buys are also happening, indicating that users are taking to online shopping.

Contactless gifting

For Mondelez India, contactless gifting is a growing segment and the recent Raksha Bandhan saw “good traction” for gift boxes, including exclusive packs, in both online and offline spaces. This apart, the company is also banking on its direct-to-consumer gifting business — a strategically important segment — targeting both corporate and individuals.

“Considering that Raksha Bandhan saw good offtake, we are hopeful about Diwali and will work on improving our digital visibilities,” Dikshit added.

Published on September 10, 2020

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