Consumer goods company Reckitt Benckiser is set to use digital means over stores to sell its cleaning brands in emerging markets such as China and India.
On an earnings call, the company's Hygiene Home division President Rob de Groot said that brands such as dishwashing product Finish and stain remover Vanish would likely be advertised and sold largely online rather than via stores.
"The rules of fast-moving consumer goods have changed. Where in the past, it was about putting big sales forces together and going to the stores, now the digital technology, both at the consumer communication part as well as the transaction part from a channel perspective, opens up completely new opportunities," de Groot said on the call Monday after an earnings release.
In India, e-commerce has grown 10-fold over the last three years, de Groot added, and in China the figure is four times over the same period. The company wants to "hyper-target" consumers in the two countries, he said. "Today's technology really gives you that possibility that you can target very dedicated parts of the population," he said.
Consumer packaged goods companies have been finding ways to sell directly to consumers, as it means they can have closer relationships with the people that buy and use their products. Unilever, for example, bought Dollar Shave Club for $1 billion in 2016, while Procter & Gamble launched a rival subscription service for Gillette in 2017.
Rakesh Kapoor, Reckitt Benckiser's departing chief executive, said the company had tripled its investment in e-commerce and digital between 2017 and 2019. "Our world around is disrupting in terms of digital — I mean, as human beings, as people, we are actually shopping differently, we are engaging new brands differently. We know that, everyone knows that. But knowing that and doing something about it is quite different."
Kapoor claimed that the focus on digital had meant e-commerce sales grew by 40 percent in its health division, which makes products like Nurofen, Durex and Gaviscon. The company reported a 4 percent growth in like-for-like sales in its fourth quarter on Monday, ahead of analyst expectations of 3.3 percent.