Home / Companies / News /  Tata eyes cost synergies post BigBasket deal

Fast-moving consumer goods (FMCG) firm Tata Consumer Products Ltd (TCPL) will work “very closely" with BigBasket, an e-commerce platform that was recently acquired by the Tata Group, to drive synergies in terms of costs and topline, according to the company’s managing director and chief executive officer, Sunil D’Souza. “So we have aligned partners. It is very easy to partner with a group company especially when you have a common vision of where you want to be whether it’s on the e-commerce side or the FMCG space," said D’Souza.

“A very close partnership and driving win-win synergies is going to be the key," he added. The firm, which has more than doubled the sales contribution from e-commerce channel to around 6% for domestic market last fiscal, is also focusing on enhancing its direct-to-consumer channel (D2C) approach of selected coffee brands and their specific websites.

As part of the strategy, it is bringing ‘Eight O’Clock’, an American gourmet coffee brand, under D2C along with Tata Coffee 1868 and Sonnets. “All of these are targeted towards very specific consumers. Going online allows us to target those specific consumers in a very cost-efficient manner," said D’Souza.

TCPL has also hired people who had worked with e-commerce portals. This is expected to help the firm adapt to the changing business landscape and consumer behaviour in the wake of the pandemic. “So far, it seems to have worked. For example, over the last one year, we have doubled the percentage contribution from e-commerce from about 2.5% to 5.2%. We exited March at 6% and it is continuing to grow month-on-month," he said.

TCPL had entered into the D2C space last month by launching its premium roasted and ground coffee under the Sonnets brand, targeting mainly urban consumers seeking a special coffee experience.

TCPL, which has lesser rural exposure in comparison to its rivals, is also expanding its network. “Compared to the rest of the FMCG world, we are probably underweight on rural compared to urban. That said, it is not by design but it is by default because right now, we rebuilt our entire distribution system first. Focus was getting the urban, semi-urban areas in shape and that is where we focused on the integration and now we are moving towards rural," said D’Souza.

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