**ITC’s Strategic Shift: Embracing E-Commerce and Quick Commerce Growth**
ITC has successfully implemented joint business plans with leading quick commerce and e-commerce platforms, as highlighted in its recent annual report. The company has tailored its market and outlet-specific strategies to leverage the growth potential of these channels. “The rapid expansion of modern trade, e-commerce, and quick-commerce, along with the rise of new competitors, has prompted us to adopt customized strategies to capture emerging opportunities,” ITC stated.
The surge in digitally enabled sales has been remarkable, with modern trade and e-commerce now accounting for 31% of ITC’s FMCG portfolio, a significant increase from 17% in FY 2019-20. In contrast, peer company HUL reports that only 7-8% of its business comes from e-commerce. Factors such as increased internet usage, the widespread adoption of digital payments, and faster delivery services are driving e-commerce sales, particularly for premium products.
Following the pandemic, ITC launched its e-store to meet the heightened demand for essentials. However, the company has since discontinued the e-store, stating that it has fulfilled its intended purpose. ITC’s collaborations with e-commerce and quick commerce platforms encompass various operational aspects, including category development, supply chain management, consumer offerings, and customer acquisition, which have significantly boosted sales in these channels. The company has also developed exclusive product assortments and channel-specific business plans, enhancing its market presence in e-commerce and quick commerce.
Key Takeaways:
E-commerce, quick commerce, and modern trade now represent 31% of ITC’s FMCG portfolio, reflecting a significant shift in consumer purchasing behavior and the company’s strategic response. ITC’s partnerships with e-commerce platforms, through joint business plans and agile supply chains, have increased the visibility and sales of premium, digitally-focused products. The evolving retail landscape and diverse consumer profiles are complicating FMCG distribution, particularly in metropolitan areas. To strengthen its FMCG portfolio, ITC is pursuing strategic acquisitions, including 24 Mantra Organic, Mother Sparsh, and Ample Foods, thereby expanding its footprint in health, wellness, and premium food segments. The company acknowledges that the rapid growth of new channels and varied demographic profiles is making FMCG distribution increasingly complex.
**FAQ: What is ITC’s strategy for e-commerce growth?**
ITC’s strategy for e-commerce growth involves forming partnerships with e-commerce and quick commerce platforms, developing exclusive product assortments, and implementing agile supply chain initiatives to enhance sales and market presence.