ITC Bullish On Ecommerce Opportunity; Says D2C Store Now Operational In 14 Cities

SUMMARY

Market coverage has risen 2x the pre-pandemic level, and outlet coverage has grown 1.3x, according to ITC’s investor presentation

The FMCG giant is digitalising several operations, deepening trade and taking the omnichannel route to grab a large piece of the $400 Bn ecommerce opportunity

On its D2C initiative (the ITC e-store), the biscuit-to-cigarette conglomerate says that the website continues to receive excellent consumer response

FMCG (fast-moving consumer goods) brand ITC has said that its multi-channel distribution network has increased its presence in the market, and ecommerce, cash & carry and D2C channels are contributing significantly to the increase in its sales.

The company on Thursday reported a 25.35% year-on-year (YoY) growth in its revenue at INR 18,608 Cr during July-September quarter, while profit rose 21% YoY to INR 4,466 Cr

Overall retail market and outlet coverage has risen 2X and 1.3X of pre-pandemic levels, ITC said in its investor presentation. In Q2 FY22, FMGC business’ EBITDA margins grew by 280 basis points (bps) over Q2 FY20 and 50 bps over Q2 FY21, it added.

“Ecommerce continues to scale up rapidly, leveraging account-specific strategies, new product introductions and customised supply chain solutions. Availability of products has been further expanded with new trade partners on quick commerce and social commerce platforms,” it added.

Talking about its D2C initiative (the ITC e-store), the biscuit-to-cigarette conglomerate said that the website ‘continues to receive excellent consumer response’.

The company said that its D2C store is now operational in 14 cities, and has over 700 FMCG products across over 45 categories available.

It said it has increased ecommerce business within the FMCG segment with increased outlet coverage, supply chain agility, judicious pricing actions, fiscal incentives, leveraging digital and optimising channel assortments.

Further, its online B2B solution named ‘Unnati’ has onboarded over 4.4 Lakh retailers so far. The platform will facilitate direct engagement with retailers, analytics, personal recommendations of hyperlocal baskets based on consumer purchase insights and deeper brand engagement.

ITC Bullish On Ecommerce

The company has focused its energies on digitising several operations, calling them interventions towards enhancing productivity, driving efficiency and reducing costs.

“These initiatives are anchored on the key pillars of deepening trade and consumer connect, synchronised planning and forecasting, next-gen agile supply chain, smart manufacturing and sourcing, and smart demand capture and fulfilment,” it added.

ITC also plans to keep grabbing a share of the $400 Bn worth of the ecommerce opportunity with continued acquisition of digital businesses, revenue generation via an omnichannel strategy and driving operational efficiency.

The company has also inaugurated three automated logistics facilities for faster and efficient fulfilment.

Recently, ITC also increased its stake in Mother Sparsh, a D2C babycare startup in which it first invested in November 2021. The conglomerate also invested in D2C mother and baby platform Mylo in May 2022 to take on Johnson & Johnson, Himalaya, The Moms Co, and more.

The company already invests in alternative investment funds, which in turn invest in startups. However, it has directly invested in digital-first brands and also chose the digital route for product sales owing to the rising ecommerce opportunity in the country.