As e-commerce gains scale in the country, India’s largest consumer packaged goods company by sales, Hindustan Unilever Ltd (HUL), is working with modern retailers like Kishore Biyani’s Big Bazaar and e-tailers like Amazon and Flipkart to sell its goods through their digital networks.
“Globally we recognize e-commerce as one of the big transformations taking place and therefore we know we have to create capabilities within our organization to be able to use e-commerce as an important channel,” said Harish Manwani, non-executive chairman of HUL, explaining that the company had put in place a dedicated team to build e-commerce capabilities.
It is adopting a strategy similar to the one it used about a decade ago when modern retail was a relatively new phenomenon in India, Manwani said.
Clothing, food and groceries, consumer durables, mobile phones and IT retailing form about 60% of the organized retail market. Organized retailers have a share of just 2.2% of the overall food and groceries market, said Ajay Srinivasan, director, Crisil Research.
Even in e-commerce, food and groceries retailing is, so far, not among the top five categories bought online. Still, food and beverage makers such as PepsiCo India Holdings Pvt. Ltd, Kellogg India Pvt. Ltd and HUL have started partnering with e-tailers.
“All large FMCG companies like HUL, Pepsi, Kellogg have started to look at digital advertising and selling online as their consumers are gravitating online in terms of seeking information first and subsequently also buying online,” said Vipul Parekh, co-founder, Bigbasket.com, an online groceries retailer that has a presence in Hyderabad, Bangalore and Mumbai and has raised Rs.270 crore in funding.
FMCG is short for fast-moving consumer goods, a category that encompasses packaged foods and household and personal care products.
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