Godrej Consumer on a market expansion drive
Godrej Consumer Products (GCPL) has ventured on a go-to-market (GTM) mission to increase its overall distribution. Footprint to 1.5 million direct coverage outlets, from 1.2 million, and enhance indirect coverage to 7 million from 6 million in 2-3 years.
Moreover, the objective is to achieve a vision of growing consistently in “strong double-digits over 3-4 years, the company’s CEO (India & SAARC) Sunil Kataria said in an interview. As part of its new GTM strategy, GCPL is leveraging emerging channels and using technology as a key differentiator to disrupt the GTM ecosystem said Kataria.
On the other side, the shifts in consumer behavior since the pandemic. It has accelerated the move by GCPL to transform its GTM and make it future-ready. Today, the consumer is experimenting with buying across channels and we want to be sure we have an omnichannel strategy. We are restoring the way we operate in our existing channels in both urban and rural.
While we are expanding coverage and going deeper in penetration in rural. We want to improve the quality of expansion in outlets in urban, said outlets in urban, said Kataria. Even as eB2B has come into play, the biggest change that’s happening is the emergence of an omnichannel consumer. A consumer could read about a product and get detailed reviews on an e-commerce site. And could end up ordering it there or go to a neighborhood store and buy it.
The consumer may even end up ordering the same product on a different grocery channel on an app or walk into a modern trade store and buy it. This is where the big shift will happen for all brands in GTM, he said. While there will be overlaps currently, Kataria said in 18-20 months one would be able to reckon.
GCPL in India & P&L Accountability:
As well, E-commerce, a key channel, is an independent business unit for GCPL in India and has a separate P&L accountability. The objective said Kataria, is to be active in a fast-growing channel.
Two years ago, e-commerce was 2% of our business. This year, it should grow to 5%. Going forward, I expect e-commerce to contribute 8-10% of our business, he said. GCPL is also building its chemists network and has appointed over 400 distributors and has acquired 50,000 chemist outlets.
While it is also creating a technology backbone for the pharma channel. We were earlier under-leveraged in the chemist channel. Now we have the portfolio to leverage the chemist channel, said Kataria. Riding on the Godrej Protekt brand, GCPL now has a comprehensive range of hygiene products which include hand wash, health soap, disinfectant sprays, surface, and skin wipes to push through the chemist channel.
The company has also expanded the rural counter sub-stockist network by 30% by adding around 3,000 in the last year. The village coverage has gone up to around 70,000 which, Kataria said, will go up to one lakh in a few years. GCPL is also making a pronounced transformation of its distribution software by converting it into cloud-based where everything controls centrally and data is real-time.
Moreover, GCPL has started tracking tertiary sales in rural, which Kataria claims make it the first to do so in FMCG. Further, in a pilot project, GCPL has moved around 90 salesmen in Mumbai on third-party rolls for better control over market execution. Kataria expects the GTM transformation to contribute a 2-3% delta within the double-digit growth rate aspiration.