Dabur’s D2C brands to cross Rs 100 crore in sales this fiscal, says CEO Mohit Malhotra

Packaged consumer goods maker Dabur’sonline-only, or direct-to-consumer (D2C) brands, will cross Rs 100 crore in sales in the current financial year, company chief executive Mohit Malhotra said. These products, sold only on Dabur’s own webstore called DaburShop and marketplace platforms like Amazon and Flipkart, include premium baby care range of diapers, talcs, moisturisers and soaps, hair care and face wash under Vatika brand, cold pressed oils, and superfoods under its Real brand.

“We are rolling out a series of digital-first new products this year. Our strategy is to use e-commerce as the launch platform for many new-age formats, build up scale here and then roll them out in other channels,” Malhotra said.

Categories across personal care, foods and sanitary pads are expected to be added to the company’s digital-exclusive portfolio. In addition, the company will evaluate acquisitions in the D2C space. “We have a war chest of around Rs 5,500 crore ready for future acquisitions. We continue to look for targets which are synergistic and make a good strategic fit with our business,” he said.

While new products account for around 4-5% of the company’s sales, the contribution of new products within the overall e-commerce space is close to 10%.

“We are very well geared to clock around Rs100 crore of sales from our e-commerce exclusive range this fiscal,” Malhotra said, adding that the company’s digital spends have grown to one-fourth of total ad spends now.

Almost all FMCG companies are scaling up D2C brands through their own web stores and marketplaces, amid a mushrooming of startupswhich sell online-only products.

, which has an extensive portfolio of online-only brands including Dove Baby, Love Beauty and Planet, Simple, Dermalogica and Lakme, said last month it expects Rs 100 croreof sales from its digital-only brands over the next few months.

While the D2C brands sell in smaller volumes, these brands tend to build repeat-purchase and subscription-based consumption habits.

Tata Consumer, Colgate Palmolive, Marico,

, and Parle Products are among the companies which have either acquired stakes in existing D2C brands or have introduced their own digital-only brands. While ITC acquired stake in personal care brand Mother’s Sparsh, has invested in men’s grooming products maker Bombay Shaving Company. has a stake in The Man Company, and has invested in Just Herbs and Beardo.

Internet-only brands are fuelling growth in the e-commerce space with 45% compound annual growth rate, and have potential to reach $70 billion over the next few years, a joint report by integrated software as a service platform Unicommerce and retail consultancy WazirAdvisors said last month.

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