130-year-old FMCG major Dabur reveals its online strategyAthira Nair
Fast Moving Consumer Goods (FMCG) brands in India hopped on to the e-commerce bandwagon a while ago. With the attention that Flipkart, Amazon, and Snapdeal were getting from the media and investors, FMCG titans like HUL, Marico, Godrej, Dabur, and Britannia recognised a new platform for reaching out to a wider customer base. They also marked their presence on online grocery stores such as Big Basket and Grofers. Alongside, they started focusing more on their own websites. A year ago, Dabur launched three websites to serve the mother-brand.
Growing competition along with a growing customer-base calls for wider marketing strategies. In a recent chat with Archan Banerjee, Head of Digital Marketing, Dabur, YourStory discussed the strategies the 130-year-old company is exploring to fully leverage the potential of the online world.
Back to future
In the last two years, Dabur has been undergoing transformation to become a “young, modern, and socially conscious organisation”. Archan says: “Youngsters think of Dabur as a brand for their parents’ generation, but we are doing things nobody would’ve expected Dabur to do.” He claims that their marketing campaigns, especially those with influencers, have driven organic engagement with customers. Bloggers also contribute to building a buzz around the brand.
In fact, Dabur had earlier featured in a Google case study for their acclaimed ‘braveandbeautiful’ campaign [by Vatika shampoo], the only FMCG company to have done so. Dabur’s portals like mybeautynaturally.com is part of their customer engagement programme. “Making the concept relevant to customers through content marketing is key. Our revamped website is a step in this direction,” Archan says.
The new website directs the customer to the marketplace[s], depending on which one has the product available at the time. Archan adds: “We don’t sell it ourselves – because FMCG consumers seldom buy a shampoo alone. On a marketplace there are more options.” Also, he believes, chyavanapravash on Amazon will look modern and contemporary – and the youth will connect better.
The website was re-launched a month ago, after six months of effort. It is a single window to the world of Dabur – customers can reach the content websites directly from the homepage.
One year plan
In the next one year, Dabur will be launching more products across all categories, although none will be launched exclusively online. TV is still their primary medium for marketing– especially for reaching out to customers in Tier 2 cities and beyond. Archan adds that the percentage of investment in online marketing is disproportionately high compared to television and print.
When it comes to social media, though, they are very agnostic. According to Archan, the organic reach of a brand via Facebook or Twitter is zero. Dabur has been building communities since 2012, by engaging with the customers on a regular basis. “That gives us lifetime value. But on Facebook, once they change the algorithm, you can’t reach out to your customers unless you pay them,” adds Archan.
Additionally, Dabur has stayed away from the most popular (and unsustainable) trick to win customers- it does not give discounts. “We provide only ‘try now’ or ‘buy now’ options on our website. But we cannot control marketplaces giving discounts, although there are agreements on how much we will sell it for,” says Archan.
For Dabur, online sale is a complementary, yet huge, effort. Archan adds that online grocery stores have worked very well for them in terms of ROI [return of investment], if not volumes.
Staying ahead in competition
FMCG is expected to follow ticketing, electronics, and fashion categories in ecommerce. A recent study by CII and Boston Consulting Group (BCG) estimates that the FMCG sector is worth around $65 billion in India. By 2020, it states, more that 150 million consumers would be digitally influenced.
Regular consumption patterns make FMCG a favourite of horizontal marketplaces. Ecommerce giant Amazon, in fact, has launched a ‘subscribe and save’ offer for daily essentials; it is offering a 10 percent discount on the entire order, if you have at least three subscriptions on a monthly basis. Although it is a volume-based business with minimal margins, Archan says that this model provides them a great opportunity to upsell the other products in their platform, as it does in offline platforms like Big Bazaar.
In FMCG, online competition is as fierce as it is offline. The latest player in the race, Patanjali, is striving to give better products at a lesser cost. “Their authenticity comes from Baba Ramdev; but Dabur is iconic in nature,” says Archan. He adds that despite operational issues, last year, Dabur still had 13 percent growth in 2015-16.
Revenue from online sales is not very substantial for these players; yet, the opportunity for visibility and brand rebuilding is significant. In India, ecommerce accounts for just two percent of the retail sector. But, it is estimated that it will grow to almost 11 percent by 2019.
With the boom of ecommerce, experts had predicted that offline goliaths will have to join the sector sooner or later. In fact, the Reliance Group, which started selling FMCG in 2009, launched an online version of ‘Reliance Fresh’ [called reliancefreshdirect.com] last year, and a fashion portal ‘Ajio Life’ in 2016. The ITC Group, unlike Dabur, follows these footsteps and sells on their portal– shopping.kitchensofindia.com
India’s other multinational conglomerate Birla Group launched fashion portal ABOF recently. They had also partnered with online grocery store Zop Now for home delivery of online orders. Their competitor Tata Group has been selling their FMCG products on major marketplaces since 2013. Additionally, Tata launched ‘mytatastore.com’, an ecommerce portal dedicated for their employees in 2015. Soon after, they launched online grocery store my247market.com for the wider customer base. A few weeks ago, they launched horizontal marketplace Tata CliQ. Also, there have been reports of them being in talks with Alibaba Group for omni-channel strategies. The brand value that they have built over the decades does provide more credibility online. If they get logistics right by partnering with Alibaba, they will be giving Flipkart and Snapdeal a run for their money.