FMCG behemoth garnering better than normal market share from modern retail

August 1st, 2008 · No Comments

Although, organised retail forms a small part of total retail in India, it has begun to emerge as an important channel of distribution for a number of large FMCG players in the country.While, modern retail accounts for only 4% or so of overall retail business, Hindustan Unilever Limited (HUL), the country’s largest FMCG company, has been able to garner about 7% of its business through this channel. This is despite the fact that marketers of branded products prefer traditional channels to modern retail.While, urban general trade channels accounted for 60% of the FMCG giant’s business, balance 33%, according to a Hindu Business Line report, came from its rural trade channel.

Having realised importance of the emerging business channel, HUL has recently formed a joint venture with Smollan Holdings of South Africa. While, building long term capabilities, this will help HUL in providing in-store execution focus to its modern retail customers.

The FMCG behemoth is also trying to shore up business of its tea, coffee and soup brands like Bru, Lipton, and Knorr by utilising its ’out-of-home distribution’ channels. It will set up a few vending machines in modern retail stores to vend these products.

“We would be setting up these vending machines even within the modern outlets very soon and sales distribution through the out-of-home channel is going to become significant for the company in terms of directly reaching out to its customers,” said an official.

Tags: FMCG · Retail Research · Research/ Analysis/ Stats/ Trends