Dabur India is venturing into the D2C space by launching its own website, Dabur Shop. The FMCG major is eyeing Rs 100 crore revenue from the sale of digital-first brands by the end of FY23.
Soon, you will be able to shop for Dabur India’s flagship products like Dabur Chywanprash, Dabur honey, and other products on its own Direct to Consumer (D2C) platform. One of India’s oldest packaged consumer goods company, Dabur is getting ready to dip its toes in India’s buzzing D2C market. Dabur India is all set to launch its D2C platform, Dabur Shop, which is expected to go live across India by the end of this fiscal year.
“Dabur Shop is currently in its beta testing phase. We are adding pincodes to it as we speak and testing is still underway,” says Ankush Jain, CFO, Dabur India.
On Dabur Shop, consumers will be able to shop for products across Dabur’s portfolio including—home and personal care, foods and beverages, and even healthcare. Products from Dabur’s ayurvedic portfolio like Restora, which helps fight fatigue and constipation, acne remedy Trifgol, and others will also be available on the D2C platform. Dabur has already tasted success from the sale of its products on other online platforms like Amazon, Bigbasket, and Tata 1MG, among others. Ecommerce, which used to be 2-3% of Dabur’s overall business three years ago, has now grown three times to contribute 9% to its sales.
“Ecommerce is doing very well for us, as in the current quarter also, we’ve grown by roughly around 50%,” said Mohit Malhotra, CEO, Dabur India, in the company’s Q2 FY23 investor call.
At the end of FY22, Dabur reported a revenue of Rs 8,082 crore from the domestic market and Rs 2,806 crore from international markets. Ecommerce business contributed to 6.5% of Dabur’s sales in fiscal 2021-22.
“We expect to report Rs 100 crore from digital brands on an annualised basis at the end of FY23,” says Ankush, who clarified that this would include sales from all online channels. The online sales pie will further be fuelled by revenue generated from Dabur Shop.
“It is too early to gauge sales revenue from Dabur Shop, but the effort is to be a one-stop shop for all Dabur products,” he adds.
Dabur’s digital-first strategy The digital push is much in-line with Dabur’s core growth strategy and its pursuit to be relevant to millennial and Gen Z consumers.
“The COVID-19 pandemic has also highlighted the urgency of accelerating digital transformation at Dabur. Hence, we focused on modernising and innovating our infrastructure, technology, and products to help us succeed in this fast-changing, digitally-driven world,” said Dabur in its latest annual report.
The COVID-19 pandemic saw the rise of hundreds of digital-first brands in India across the food, beauty, wellness, and consumer goods space. Many industry watchers have coined 2021-2030 as the decade of D2C or digital brands. A report by Redseer Consulting estimates that a $250 billion opportunity awaits new digital-first brands in India by 2030.
“Digital first brands are finding it increasingly rewarding to engage with consumers in these channels and offer them a seamless and omnichannel experience. The success of such brands will depend on how effectively they leverage these new retail channels and how they innovate on the digital front to offer a superior omnichannel experience,” said Anil Kumar, CEO of RedSeer Strategy Consultants in a note on RedSeer Insights.
For Dabur too, digital has become a cradle of innovation. “We are first testing it (products) out on ecommerce because the cost of entry is very low and significant investments are not required on ecommerce,” said Mohit Malhotra, CEO, Dabur India, in an analyst call.
Over the last couple of months, Dabur has been doing many soft launches via ecommerce channels to gauge the initial success of its products with consumers. For instance, Dabur has around two dozen digital-first products. Dabur Vedic Tea, Real superfoods like chia seeds and pumpkin seeds, and nine baby care products (including baby shampoo, baby oil, baby lotion, baby powder, etc) are all online first.
The new product contribution to ecommerce is already 11% for Dabur and this is expected to inch up further in the months to come.
Apart from new product launches, Dabur has also launched premium products like cold pressed virgin coconut oil and Real health peanut butter, exclusively on digital platforms to begin with.
In addition to improving the overall tech interface, the consumer goods company is ironing out challenges related to last-mile delivery.
“It will not be a simple exercise. There are challenges because of the scale, range of products, and last-mile delivery. We will be developing it and taking it to the next level in a calibrated manner,” shares Ankush.
Company-operated D2C platforms
Over the last few months, we have seen many FMCG companies launch their own D2C platforms. For instance, companies like Nestle and ITC operate their own D2C platforms. But analysts say these will never become a mainstay for consumer goods companies because they may not generate sizable sales.
“It is foolish to think that consumers will want to buy or use all products from a certain company’s website. For example, if I want to buy Dabur honey or ITC Atta, I would rather buy it on a marketplace than go to a particular company’s website,” says an industry expert, who did not want to be named. “While it may be a good way to communicate directly with consumers, in terms of scale, it would not be a big sales driver for an FMCG player,” he adds.
However, the advantages of having a D2C channel are many. They enable companies to come up with bundled offerings, and customised gift packs, and even allow direct conversations with consumers to bring about consumer education. Cross-selling opportunities can also be explored via D2C platforms.
“We have many online-exclusive innovations in the pipeline in the year ahead,” says Ankush.
