Tata Group’s FMCG Ecom Channel Sees 40% YoY Growth In Q2 FY23

Tata Consumer Products Ltd, the wholly owned FMCG-focussed subsidiary of Tata Group sales from modern trade channels grew 18% from the corresponding quarter in the previous year, and sales from the ecommerce channels grew 40% YoY, contributing to more than 9% of Tata Consumer Products’ India business sales. 

The company announced its unaudited financial results for the quarter ending September 30, 2022. While the overall revenue was INR 3,363 Cr alongside a net profit of INR 389 Cr, it was the ecommerce segment that shone out.

“Alternate channels continued to support the innovation agenda, with 11% of ecommerce revenue coming from NPD (new product development) sales during the quarter,” the company said in a statement.

The company also claimed to have served nearly 1.4 Mn consumers overall (online as well as physical) – an 8% QoQ rise, with packaged beverages, especially Tata Tea Gold ranking the highest amongst all its FMCG products.

Tata Group Bullish On Ecommerce

The Tata Group has been quite bullish on the ecommerce segment, with channel expansion, digital transformation and innovation as the key focus areas, as suggested by Tata Consumer Products’ CEO Sunil D’Souza.

Additionally, selling FMCG products online has not been the only focus area of the salt-to-steel conglomerate, as the company has piloted its super app, Neu in the current financial year.

Tata Digital, the new-age vertical of Tata Group, consolidates all the digital brands such as BigBasket, Tata 1Mg, Croma, Tata Payments and more, under one umbrella, via its super app.

The digital arm of the Tata Group posted total revenue of INR 16,201 Cr in FY22 – a 3X YoY jump, earning INR 15,344 Cr from the sale of products on the platform. Consequently, as advertisement expenses rose, its losses also widened by 5.6X YoY to INR 3,051.8.

In a bid to grab a larger share of the $400 Bn worth of ecommerce opportunity (by 2030) via Tata Digital, the Tata Group is looking to pump nearly INR 3,500 Cr into the digital arm. Besides, all Tata-manufactured products are available on several ecommerce channels such as Flipkart, BlinkIt, JioMart and more. 

Unlike its competitor Reliance, which runs the Reliance Fresh stores, JioMart stores and the Reliance Smart chain, Tata’s presence in the D2C segment is currently limited. 

While most of the products available on ecommerce channels are wholesalers/retailer-sold, Tata’s Consumer products vertical is increasingly moving towards channel consolidation and gaining a larger market share, not just in India, but also globally.

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