Top multinationals from HUL to Apple brace for rising online sales post Covid-19

Kolkata/Mumbai: Global consumer goods biggies such as Unilever, Apple, Samsung, LG, Xiaomi and Vivo expect ecommerce contribution to their overall sales to increase significantly after the Covid-19 pandemic, and they have started tweaking their India businesses for this, industry executives said.
Apple is preparing to launch company-owned online store in the country around August-September, a month earlier than its original schedule, while top white goods maker LG said it will roll out its own e-store in India this year, they said.

LG, Samsung, Vivo and Xiaomi are also rolling out hyperlocal sales platforms that will connect their offline stores to consumers searching products online so that the outlet nearest to the consumer can deliver the order, industry executives said.

Xiaomi is connecting 3,000 stores for the trials, while Vivo will be enabling 20,000 retailers for such sales.

India’s largest fast moving consumer goods firm Hindustan Unilever chairman Sanjiv Mehta said consumers would be more averse to stepping out after the pandemic and would like to place the order from home and receive it at home. “So this should definitely give a fillip to ecommerce, and we would be ready for that,” he said.

Online contribution to India's FMCG sales rose nearly 50% year on year during the March quarter as consumers increasingly shopped from e-grocers instead of local kiranas.

Online contributed just 1% of groceries sale in the country until mid 2017, which nearly doubled to 1.9% by 2019. According to a Nielsen report, this has now increased even as local grocer's share fell 220 basis points, entirely taken by ecommerce and modern retailers.

India’s largest smartphone maker, Xiaomi India MD Manu Kumar Jain said share of ecommerce to smartphone sales in India at around 40% is one of the highest globally. “It may go up further now, but in the long-term there will be equilibrium with offline,” he said.

Smartphone trackers like IDC too expect that share of ecommerce for smartphones may gain by 5% this year in India. “Initial demand for 1-2 months will come up from ecommerce. But brands cannot ignore offline for long in India and they may undertake more hyperlocal initiatives,” IDC India research director Navkendar Singh said.

Realme India CEO Madhav Sheth said ecommerce, due to its contactless nature, will become a practice for all handset brands and push all brands to convert to a more online-oriented business. "We expect offline to pick up eventually, especially in smaller towns, where penetration of ecommerce is low,” he said.

Apple, LG and Samsung indicated in their earnings call last week that ecommerce will gain traction now and two industry executives said there is clear cut directives from headquarters of these brands to speed up India initiatives.

LG Electronics India head for online business, Deepak Taneja said going forward consumers in tier two and three towns will also start buying from ecommerce.

Apple CEO Tim Cook had last week said there is definitely a move to ecommerce. “Whether that's a permanent shift, I would hesitate to go that far because I think people like to be out and about. They just know that now is not the time to do that,” he had said on an earnings call. The iPhone maker has asked its 500-odd franchisee-owned exclusive stores in India to push sales through online.

Apple and Samsung did not respond to emails ET had sent as of press time Monday.