FMCG Companies Embrace Affordable Digital Strategies to Capture Mass Market Share

FMCG firms are introducing more affordable digital packages tailored for the mass market. This marks a departure from their previous focus on premium or niche segments. The move comes as e-commerce emerges as a significant channel, experiencing rapid growth over several quarters. The aim is to boost sales volume online and lower operational costs.

Parle Products, known for biscuits, now offers online packs priced between Rs 70-90, a reduction from the earlier Rs 120-plus range, or by bundling multiple smaller packs. Emami recently entered the mass market for toothpaste through digital channels. Similarly, Dabur is pricing its direct-to-consumer (D2C) products in categories like baby care and food lower than competitors targeting the premium segment.

Hindustan Unilever (HUL), India's largest FMCG manufacturer, has also hinted at this strategic shift. HUL Managing Director Rohit Jawa emphasized the importance of this shift, noting the company's focus on developing brands for mass appeal.

Industry insiders highlight the high servicing costs associated with online orders, which range from Rs 50-60 for two-wheeler deliveries and up to Rs 160-180 for four-wheeler deliveries. To make operations financially viable, companies need a mix of premium, mid-segment, and mass products.

E-commerce now contributes significantly to FMCG sales, accounting for 12-14% including direct-to-consumer segments. As a result, FMCG companies are adapting their strategies to target the mass market through digital-first products at lower price points, driven by the imperative to reduce online costs and increase sales volumes.