Strategy consulting firm Redseer conducted extensive research on more than 1,000 companies with over 2,000 consumer brands across categories to identify the ones that have been most successful in building a strong e-commerce presence. And the results might surprise you.
It turns out that India’s legacy companies like Hindustan Unilever (HUL) and Aditya Birla Fashion & Retail (ABFRL) lead in some key segments. While HUL ruled online sales in the ‘Grocery and Personal Care’ category, ABFRL topped in online ‘Fashion and Home’ sales. L’Oreal India and Licious were the other two top brands in the grocery and personal care, while Puma India and Wakefit completed the top three in the ‘Fashion and Home’ segment.
“Traditional brands across categories have recognised the criticality of e-commerce to stay relevant. While some have been able to mark their presence in the space, many have struggled to adapt to the agility and financial parameters of the online market,” said Saurav Kumar Chachan, Director at Redseer.
Meanwhile, in the ‘Electronics & Appliances’ category, D2C brand boAt emerged as the leader, followed by BBK (parent company of OnePlus), and Asus. “The elements considered for the ranking of companies included their online market share in the category, percentage of sales they derive from e-commerce, and their growth and performance on online platforms,” Redseer stated.
Further elaborating on the methodology of the ranking, Mohit Rana, Partner at Redseer, said, “The companies were divided into four distinct quadrants based on select criteria. The early movers or the ‘Tigers’ in the e-commerce space, scaled up rapidly and built their dominance online as well as offline. Legacy players, or the ‘Elephants’, are the dominant offline players who have scaled up well online. ‘Rabbits’ are typically digital-first companies who have leveraged the e-commerce space well but are yet to scale, while the legacy players that have built a good online presence but have a comparatively lower online market share are the ‘Turtles’.”
“Players in the top quadrants will have to enhance their focus on offline sales, while the bottom quadrant will have to approach e-commerce aggressively,” he added.
At present, traditional players garner less than 30 per cent of their sales from online transactions. Overall, India’s e-commerce was worth $63 billion in 2022, per Redseer estimates. It is projected to grow at a CAGR of 27 per cent to reach $163 billion by 2026, almost 3x the growth in India’s overall retail market.
D2C brands not only account for a quarter of total e-commerce sales in India, but they are also increasingly expanding their presence offline, threatening the traditional players on their turf. In mature ecommerce categories like electronics, some traditional brands have adopted digital-centric strategies to derive almost 50 per cent of their sales from online channels. However, the gap in the two strategies is quite evident in fashion and grocery, according to Redseer.
“With digital-first brands accounting for ~25 per cent of online sales and expanding their footprint in the offline market, traditional brands have newer challenges to conquer,” said Redseer Founder & CEO Anil Kumar, adding, “Legacy companies need to focus on building digital capabilities and adopt an omnichannel approach to stay relevant in the digital age.”
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