Godrej Consumer on market expansion drive

(This story originally appeared in on Apr 05, 2021)

Godrej Consumer

Products (GCPL) has embarked 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.

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 told TOI in an exclusive interview.

As part of its new GTM strategy, GCPL is leveraging emerging channels and using technology as a key differentiator to “stay ahead of the curve as changes disrupt the GTM ecosystem”, said Kataria. The shifts in consumer behaviour since the pandemic have 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 omni-channel strategy. We are reinventing 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 Kataria.

Even as eB2B has come into play, the biggest change that’s happening is the emergence of an omni-channel consumer.

“This is the consumer who will shop across all channels. 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 neighbourhood 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 which channel — general trade, modern trade, e-commerce — will omni-channel get indexed towards. Since data will become the key differentiator in an omni-channel environment, GCPL is invested in building an analytics backbone.

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 agile 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. 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 Godrej Protekt brand, GCPL now has a comprehensive range of hygiene products, which include handwash, 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 one 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 is controlled centrally, and data is real-time.

GCPL has started tracking tertiary sales in rural, which Kataria claims makes 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. This is based on a key learning from the pandemic, when suddenly there was a shortage of sales people. Based on what GCPL learns from this pilot project, it plans to extend the same to other top metros as well.

Kataria expects the GTM transformation to contribute 2-3% delta within the double-digit growth rate aspiration.