D2C brands biggest disruptions to FMCG players: Harsh Mariwala

Marico founder Harsh Mariwala believes Direct-to-Consumer (D2C) brands are the biggest disruption to FMCG companies.

“Entry barriers in terms of distribution, and advertising have vanished with the emergence of e-commerce, and digital marketing making D2C brands the biggest disruption to FMCG companies. We have seen the emergence of many D2C brands. An FMCG company can look at it as an opportunity or from a threat angle,” Mariwala told businessline.

Technology is another disruption to the FMCG companies, he pointed out. “Technology is bringing in changes – whether AI, digital or robotics. Organisations will have to learn to deal with this and convert it into opportunities. Companies need to be agile, the organisation will have to deal with the challenges and have ways to predict opportunities in advance. During the Covid-19 pandemic, trends got accelerated. It is important for companies to know what is happening globally and bring it in advance to India,” he said. 

D2C acquisitions 

Marico will acquire D2C brands that have a unique offering and fit into the overall company strategy. The company’s acquired D2C brands include Beardo, Just Herbs and True Elements . 

“We have acquired D2C brands and also have our in-house brands. This has become a growth engine for us and a big opportunity. We have housed the brands at a different location with a different team, as the mindset required to build a D2C business is very different from traditional FMCG. We are scaling the D2C brands and devoting our energy to making them profitable,” he said.

Election impact

While the demand in rural areas is weak compared with the urban market, a pick-up in demand is expected this year.

“We are witnessing some pick-up, but it will be early to conclude. With the ban on electoral bonds, the spending may not be as high. We are hopeful that the monsoon will be good,” Mariwala added.