Tata Consumer Products to scale D2C reach2 min read . Updated: 14 Jan 2021, 06:10 PM IST
- The company is looking at ways to add more of its beverages' portfolio onto a direct-to-consumer platform, the president of packaged beverages at TCP said
- Tata Consumer Products brands reach out to over 200 million households
New Delhi: Increasingly fast-moving consumer goods companies are eyeing direct-to-consumer channels as customers in urban markets warm up to the idea of shopping of daily goods online.
Tata Consumer Products (TCP), that sells Tetley Tea and Sampann brand of spices and pulses already has Tata Nutrikorner.com, a platform it set up as a pilot in September 2019 and subsequently allowed consumers to shop online. The company that sells packaged beverages and pulses could add more offerings and scale the platform, said Sushant Dash, president, packaged beverages (India, Bangladesh and Middle East) at Tata Consumer Products Limited. He said the company is looking at ways to add more of its beverages' portfolio onto a direct-to-consumer platform. “So, we are looking at that and evaluating the options in terms of how it works for the beverage part of it," said Dash.
TCP has a portfolio of beverages including Tata Tea, Tetley, Eight O’Clock Coffee, Tata Coffee Grand and Himalayan Water, among others.
More companies are looking at e-commerce store fronts to upgrade their direct-to-consumer initiatives. The need for such efforts has picked up post the pandemic as companies ensure consumer reach, said analysts tracking the sector.
The move helps brands not only with sales but also build brand awareness. “Companies can also reserve more premium, exclusive online products for their own websites to build salience and even roll out subscription models wherever possible," said Saurav Chachan, senior consultant, at consulting firm RedSeer.
Even though online sales of groceries are a small part of the overall retail trade, covid has pushed companies to look at several trade channels as the pandemic resets consumer behavior. Sales via e-commerce contributed to 3.1% of FMCG sales by value in the third quarter of 2020, market researcher Nielsen said in an earlier report. This is largely derived from sales on marketplaces.
“Very clearly there is growth that is happening in terms of the digital world, people are getting more and more comfortable shopping online, we are clearly seeing that growth happening. Now, one needs to obviously examine and look at the viability and whether it makes sense for our brands to have a direct to consumer channel, it is work in progress," said Dash. Tata Consumer Products brands reach out to over 200 million households.
Last year, Marico Ltd launched Saffola Stores after seeing a higher acceptance of home delivery, cashless transactions and mobile payments. “We are betting big on the D2C model and digital brands to scale up our premium personal care and food business in the coming years," Saugata Gupta, MD and CEO Marico Limited told Mint earlier.
RedSeer’s Chachan said that such platforms make sense for companies with a large product assortment and products that are part of frequent purchase cycles such as soaps or spices. “But they will face challenge in acquiring customers since a bulk of e-commerce sales for most FMCG companies still come from the marketplaces," he said.