Adani Wilmar, the company that markets ‘Fortune’ brand of food products in India, is all set to enter the online grocery sales business with a new e-commerce portal and app called ‘Fortune Online’.
The company has hired Ahmedabad-based Infibeam to set up an app for the same.
Infibeam will be responsible for developing and maintaining the online and mobile platform and providing logistical support.
“Fortune Online will be an exclusive B2C (business to consumer) commerce platform which will enable customers to select and purchase of Fortune brand products by using this application for delivery at homes,” Infibeam said.
Further details were not revealed.
The move will make it the first big food and FMCG brand to try to build a strong and direct channel to consumers.
Others like Hindustan Unilever and ITC have focused on offline retail by serving their lakhs of retail partners across the country. Their products, however, are available at only grocery portals such as Grofers.
Part of the reason why big FMCG manufacturers don’t have their own online retail apps and websites is to ensure that they do not rub their distributors and retailers the wrong way.
FAT TARGET
FMCG products tend to have very high margins to account for the high cost of transporting and storing these products, as well as to account for the multiple layers of dealers and distributors involved in the supply chain.
Organized retail chains like Big Bazaar have taken advantage of the fat margins and multi-layered distribution structure of traditional channels to successfully undercut prices when compared to ‘mom and pop’ stores.
With its fat margins, grocery and food retailing forms a lucrative target for ‘disintermediation’ by digital technology.
However, the relatively higher weight-to-value ratio and the challenges of getting the items safely and hygienically into consumer’s hands within a fixed amount of time have made online sale of grocery and food items more challenging.
Amazon, the big daddy of online retail in India, has also evinced an interest in selling grocery items in India.
The ecommerce giant’s proposal to invest $500 Mn in offline and online food retailing was approved by the government in July.