Harsh Mariwala, the Founder of Marico, believes that Direct-to-Consumer (D2C) brands are the primary disruptors of FMCG companies.
“Entry barriers in terms of distribution, and advertising have vanished with the emergence of e-commerce, and digital marketing making D2C brands the biggest disruption to FMCG companies. We have seen the emergence of many D2C brands. An FMCG company can look at it as an opportunity or from a threat angle,” Mariwala said.
He emphasized that technology serves as an additional disruption to FMCG companies.
“Technology is bringing in changes – whether AI, digital or robotics. Organisations will have to learn to deal with this and convert it into opportunities. Companies need to be agile, the organisation will have to deal with the challenges and have ways to predict opportunities in advance. During the Covid-19 pandemic, trends got accelerated. It is important for companies to know what is happening globally and bring it in advance to India,” he said.
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Marico plans to acquire D2C brands that offer distinct products and align with the company’s overall strategy. Among the D2C brands already acquired by Marico are Beardo, Just Herbs, and True Elements.
“We have acquired D2C brands and also have our in-house brands. This has become a growth engine for us and a big opportunity. We have housed the brands at a different location with a different team, as the mindset required to build a D2C business is very different from traditional FMCG. We are scaling the D2C brands and devoting our energy to making them profitable,” he said.
Although demand in rural areas currently lags behind that of urban markets, an increase in demand is anticipated for this year.
“We are witnessing some pick-up, but it will be early to conclude. With the ban on electoral bonds, the spending may not be as high. We are hopeful that the monsoon will be good,” Mariwala added.
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