The largest Indian retailer, Reliance on detailreported a 17% contribution from e-commerce sales to consumers and smaller stores for digitally booked orders up from 10% a year ago, while for Tata-owned Trent Ltd, it went up 7% from at 5% in FY21.
Consumer goods companies love it too Hindustan Unilever, Nanny Consumer products e Dabur said e-commerce contribution increased a couple of percentage points in FY22 despite modern trade normalization over the course of the year.
Reliance Retail Head of Strategy Gaurav Jain he told analysts that consumers are shopping in both online and offline channels and are buying 35% more than before through a single channel. “Customers have used omnichannel functionality because they have benefited from the convergence of technology and brick-and-mortar stores,” said Jain.
Ecommerce sales have started to gallop for consumer goods since the start of the pandemic in 2020 due to restrictions on opening physical stores and malls and consumers who prefer to shop from home. However, the pace of growth slowed slightly in 2021-22 due to a higher base, loosening of restrictions and a gradual decline in Covid infection rates.
Discover the stories of your interest
However, the contribution of online channels continued to grow. India’s largest consumer goods producer, Hindustan Unilever, said in its earnings release that in the March quarter, digitized sales across all platforms, including e -commerce and the Shikhar internal ordering app, accounted for more than 20% of its overall sales.
For Dabur, online sales increased by 1.5% to 6.5% in the last fiscal year compared to the previous year, while for Tata Consumer Products the contribution of e-commerce channels increased from 2, 5% in FY20 to 5.2% in FY21, and further increased to 7.3% at last tax.
CEO of Dabur India Mohit Malhotra he said that in urban markets, e-commerce will be a key driver of growth in the future. “In the post-Covid world, e-commerce has emerged as the contactless method of choice for consumers to shop,” she said. The company wants to triple its e-commerce contribution to 19-20% over the next four years.
“Our e-commerce business continues to grow ahead of the rest of the channels,” Sanjiv Mehta, chief executive of HUL, told analysts recently. “Our D2C website already has 25 million annual visits and, together with the e-commerce platform, our online sales today contribute 30% of our Lakme business,” he said.
The surge in e-commerce contribution affects all categories, from daily necessities, to clothing, shoes, televisions, refrigerators and cell phones.