ITC’s e-comm & modern trade sales jump; 31% of its FMCG portfolio now

Diversified conglomerate ITC Ltd. is now getting a significant chunk of its fast-moving consumer goods (FMCG) sales from newer distribution channels like the e-commerce and model trade outlets. ITC that rakes in close to Rs 21,000 crore from non-cigarette FMCG sales a year, is now at leveraging the e-commerce and modern trade channels at a much higher pace than its market peers.

In the last annual report, for FY2024, the company said that the share of modern trade and e-commerce routes for its FMCG portfolio has grown to 31% in the last year. This, in comparison to industry average of 15-20%, is way higher than the other leading FMCG players in the country. While, 80-85% of their sales come from the general trade channel comprising of traditional kirana stores and other such physical outlets.

According to ITC management, the surge in internet usage particularly through smartphones, widespread adoption of digital payments, wide assortment of products and faster deliveries continue to drive the rising salience of e-Commerce channel. ITC’s collaborations with leading e-Commerce platforms on all aspects of operations viz. category development, supply chain, consumer offerings and customer acquisition has enabled it to significantly scale-up sales in this channel.

The growth was augmented by development of exclusive pack assortments, channel-specific business plans and ‘Digital First’ brands. Joint Business Plans executed in coordination with e-Commerce platforms coupled with agile supply chain initiatives have further fortified ITC’s market standing in this channel, it said. The rapid rise in the contribution of e-commerce and modern trade channels in ITC’s FMCG sales is evident from the fact that four years ago, in FY2020, their combined share was at 17%.

While the modern trade channel continued to witness strong growth, driven by store expansions primarily in Tier 2 & Tier 3 cities. Omni-channel presence in urban markets enabled accelerated growth while shopper marketing insights and agile supply chain capabilities were leveraged to enhance operational and execution efficiencies.

To boost its presence in the newer channels, ITC focused on an in-house omni-channel network, comprising of ’ITC e-Store’ - its D2C platform. The digitally powered eB2B platform of ITC, UNNATI, has been rapidly scaled up during the year, covering nearly seven lakh outlets with a large number of retailers placing orders directly on the platform, it further said.