A sharp increase in ITC sales in the area of ​​e-communications and modern trade; It currently accounts for 31% of its FMCG portfolio

Diversified conglomerate ITC Ltd. now gets a significant portion of its fast-moving consumer goods (FMCG) sales from newer distribution channels such as e-commerce and model stores. ITC, which earns nearly Rs 21,000 crore annually from non-cigarette FMCG products, is now leveraging e-commerce and modern trade channels at a much faster pace than its peers.

In its latest annual report for FY2024, the company said the share of modern trade and e-commerce in its FMCG portfolio grew to 31% last year. This, compared to the industry average of 15-20%, is significantly higher than other leading FMCG players in the country. Although, 80-85% of their sales come from the general trade channel that includes traditional kirana stores and other such physical stores.

According to ITC management, the growth in internet usage, particularly through smartphones, the widespread adoption of digital payments, a wide range of products and faster delivery continue to drive the growing importance of e-Commerce. ITC’s partnerships with leading e-Commerce platforms across all aspects of the business, namely category development, supply chain, consumer offerings and customer acquisition, have enabled it to significantly increase its sales through this channel.

The growth was driven by the development of exclusive packaging ranges, channel-specific business plans and “Digital First” brands. Joint business plans implemented in coordination with e-commerce platforms coupled with agile supply chain initiatives have further strengthened ITC’s market position in this sales channel, he said. The rapid increase in the share of e-commerce and modern trade channels in ITC’s FMCG sales is evidenced by the fact that four years ago, in FY20, their total share was 17%.

While the modern trade channel continued to see strong growth, driven by store expansion, primarily in tier 2 and tier 3 cities. Omni-channel presence in urban markets enabled faster growth, while customer marketing insights and agile supply chain capabilities were leveraged to drive operational and execution efficiencies.

To increase its presence in newer channels, ITC has focused on its in-house multi-channel network, which includes ‘ITC e-Store’ – a D2C platform. ITC’s digitally powered eB2B platform, UNNATI, has been rapidly scaled up over the year to cover nearly seven lakh points of sale, with a large number of retailers placing orders directly on the platform, it further said.