Marico says more people shopping expensive items online as FMCG cos embrace e-commerce rage

Marico’s popular hair oil range Parachute. (Image: Bloomberg)

While online shopping has changed the face of retail across the globe, FMCG major Marico has been using the platform to drive the growth of its premium products with almost one in every two products sold online coming from its comparatively costlier product lineup or the company’s new business. “Marico has identified e-commerce as one of its key focus areas in terms of its distribution channels. Currently, 43% of Marico’s e-commerce business comes from premium products and new items in foods and personal care,” Marico said in a note on Thursday. Of lately, Marico has been ramping up its e-commerce presence and has launched products such as Saffola FITTIFY, Coco Soul, Kaya Youth O2 and Set Wet Studio X on platforms such as Amazon and Flipkart. 

Also read: E-commerce sales in FMCG to grow twice as fast as modern trade

Marico’s e-commerce business has quadrupled in a span of a year and now contributes to about 5% of Marico’s India Business. The same has recorded 75% growth in Q2FY20. Going further, “Marico views e-commerce as an opportunity for test marketing to drive the premium portfolio through digital channels — given the significant mass of internet penetration,” the company said. 

The online boom

The e-commerce channel is expected to grow to $4 billion by 2022 for fast-moving consumer goods sales. As of now, the channel contributes about 2% to the current FMCG sale, information, data and measurement firm Nielsen India said on Wednesday. “In this rapidly evolving world of commerce, India’s FMCG industry is now making its presence felt in the e-commerce channel — appealing to consumers’ need for convenience, and in sync with increasing smartphone and internet penetration,” Prasun Basu, South Asia Zone President, Nielsen Global Connect, said. 

Most of the FMCG items sold on e-commerce channel belongs to the food category with sales of food items amounting to about 44% of total e-commerce FMCG sales. Following this is personal care at 40% and household care at 13%, Nielsen said.