Expecting consumer behaviour of shifting to online shopping due to the COVID-19 pandemic to remain in the long term, Future Consumer (FCL) is focusing on changing orientation of all business and brand activities to make them Digital First, according to the company’s annual report for 2020-21.
The year 2020-21 has been an unprecedented year with COVID-19 bringing the entire world to a standstill and the second wave of COVID-19 in March 2021 made the year end with significant disruptions yet again, FCL noted in the report.
“During these times, while footfalls at offline retail slowed down, a new way of consumption was adopted by Indian masses with e-commerce becoming an integral part of frequent daily basket shopping,” it said.
The company said it believes that “habits formed in current times will tend to remain in the long term as well”.
It has been “agile to adapt itself to ensure your company’s portfolio commands leading shares in the online basket”, the company added.
“Your company is focusing on changing the orientation of all business and brand activities to make them ‘Digital First’.
“This will be phased out in a series of short-term penetration, market share growth objectives, long-term brand and loyalty building goals,” FCL Chairman G N Bajpai wrote to shareholders on behalf of the company’s directors in the report.
FCL said it will continue to grow its portfolio of food and home and personal care products. Key brands including ‘Golden Harvest’, ‘Tasty Treat’, ‘Karmiq’, ‘Desi Atta Company’, ‘Mother Earth’, ‘Voom’, ‘Cleanmate’ and ‘Caremate’ will continue to drive volume and value growth.
“Decision making will be driven by data analytics including customer buying habits, brand stickiness, category penetration, among others,” the report said, adding that the company would aim at increasing its penetration in the consumer’s shopping basket across categories.
While the company will explore opportunities in new generation categories, the prime focus will be on expanding and enhancing the existing portfolio with strong focus on increasing gross margins across food, home and personal care categories, it added.
FCL said it will use Future Retail’s (FRL) “retail muscle to expand its distribution reach” although it is also steadily expanding its reach outside of the group firm’s stores.
The company said it will adopt a cluster-wise launch approach to enter general trade stores, with home and personal care brands leading the way.
This will be done by leveraging the existing distributor network of the company’s beauty brand ‘Kara’ and building a new base of distributors for higher reach, it said adding that FCL would also also focus on taking JV brands like ‘Terra’, ‘Dreamery’ and ‘Oateo’ across kirana stores.
Sharing its plans for a focused drive to reach out to more and more households using e-commerce platform, the company said it plans to scale up presence on existing e-retailers like Amazon and Nykaa, where the brands are already present, along with adding new channels like Tata Cliq, Purpelle and more.
Noting that FY22 had begun with the second wave of COVID-19 leading to another round of disruptions across the value chain, the company, however, said that with a focused vaccination drive, the medium-to-long term opportunity seems promising.
The company strongly believes in India’s growth potential, and the way forward for FCL is to be on top of adapting to changing consumer preferences by making the brands Digital First, it said.
Besides, the company will also build a strong distribution network outside of FRL on the front-end along with optimising costs at back-end, driving synergies and judiciously allocating resources, conserving cash and improving liquidity thereby enhancing stakeholder value, the report added.