UK’s Reckitt Benckiser Takes FMCG War To Indian Ecommerce Market

UK and Gurugram-based consumer goods company Reckitt Benckiser (RB) has reportedly begun its own direct-to-consumer ecommerce operation to sell some of its premium products in India. It plans to offer the products through the brand specific websites similar to hybrid models followed by rival FMCG players Mondelez and ITC.

Citing unnamed officials, an ET report said that RB India has signed a deal with Gurugram-based logistics and supply chain company Cogent Transware for a backend partnership.

According to Cogent, the company works on a hybrid logistics model where it will purchase goods from RB stores and will store them in their own tech-driven warehouses. The products will be delivered to the customers whenever the order is placed.

RB India has already begun selling products through Durex’s official website and plans to begin selling some other brands in March. The company offers its popular brands such as Dettol, Strepsils, Durex, Veet, Harpic etc across 200 countries.

In February, Rob De Groot, president of hygiene home business at RB had said that the company will be using digital technology for boosting its ecommerce growth in emerging markets such as India and China, during the Q4 2018 post earnings call. He also added that they have seen 10X ecommerce growth in India in three years.

Shifts In Regulatory Landscape For Ecommerce

The company is looking to foray into the Indian ecommerce segment at a time when the central government is looking to implement the draft ecommerce policy.

The Department for Promotion of Industry and Internal Trade (DPIIT) had released the draft ecommerce policy on February 23 where its proposed regulation of cross border data flows and enabling sharing of anonymised community data.

In order to maintain a level playing field, the policy is aimed at aiding the domestic players. The new FDI guideline in ecommerce sector was also put into effect from February 1. Following this, global ecommerce institutions Amazon and Walmart together lost $50 Bn in market capitalisation.

While the major ecommerce giants are facing trouble in India, the majority of the offline retailers are looking to foray into the space with the advantage of their hybrid online-offline model.

In January, Reliance chairman and managing director, Mukesh Ambani had said that Reliance Retail and Reliance Jio Infocomm will jointly launch a new ecommerce platform which will be first rolled out in Gujarat.

Reliance Retail is planning to use more than 5,100 Jio point stores across 5,000 cities and towns as delivery and collection points for its ecommerce venture. The initiative is expected to begin in April, this year.

Under this, the company is planning to set up ecommerce kiosks at Jio point stores to allow the potential buyers to place orders online with the help of the store executives.

In a bid to make a strong footprint in the space, the company is also reportedly in talks to pick up a majority stake in Mumbai-based hyperlocal logistics startup Grab a Grub Services.

At a time when the new policies and guidelines have put ecommerce majors such as Flipkart and Amazon in trouble, the policies may help the offline retailers looking to foray into ecommerce.

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