Godrej eyes 5 per cent revenues from e-commerce in 4 years
Homegrown FMCG firm Godrej Consumer Products (GCPL) is bullish on the prospects of e-commerce and is expecting 5 per cent of its revenues to come from this channel in the next three to four years, a top company executive said.
The company is also planning to create a separate business unit to drive e-commerce sales.
"We should be at least looking at 5-odd per cent of our business coming from e-commerce in the next three to four years," GCPL chief executive officer - India and SAARC - Sunil Kataria, told PTI.
"We have realised that it cannot happen with e-commerce being part of customer channel. It has to be a separate business in itself," he added.
E-commerce is estimated to account for just 1 per cent of the FMCG space at present in the country, but Kataria expects it to pick up in the coming years.
The company from September 1 is shifting e-commerce as a separate P&L unit, with it's own innovation team, new product development pipeline and own marketing and digital team, he informed.
"We would like to manage it through a green channel where we focus on not only our core products going through e-commerce in a much more faster way, but also enabling a lot of agile decision making which happens within the e-commerce team," he added.
Meanwhile, the maker of Cinthol, GoodKnight and Hit, among others, is also expecting double digit growth this financial year led by strong volume growth and new launches.
"We are targeting a strong double digit growth primarily driven by volume. For the past seven to eight years, roughly one-third of our growth has been coming from new product developments.
"We see that again as being a critical driver of the growth in coming years starting from this year," said Kataria.
The company is planning to roll out around five innovations across categories in the first half of FY19, followed by another three or four in the second half, according to him.
Kataria further said that there has been a revival in consumption post-demonetisation and GST implementation, and rural is growing at a faster clip than urban.
The rural market accounts for around 30 per cent of the company's revenue at present, and he said, "By FY22, which is in three to four years, we would like to take it to 35-36 per cent."
Kataria expects premiumisation to pick up across categories in both urban and rural, that had taken a hit due to demonetisation and GST.