ITC to work with startups to develop new products
ITC Ltd chairman Sanjiv Puri said ITC is also keen to acquire companies in the FMCG business to accelerate growth.
The cigarettes-to-consumer goods maker is also thinking of opening exclusive stores in locations with high footfall to sell its entire range of FMCG products, he said on the sidelines of its 108th annual general meeting. ITC may use own cash reserves to invest directly in startups that could give ITC entry into newer categories and business models, or provide digital or physical infrastructure.
ITC already invests in alternative investment funds (AIFs), which, in turn, invest in startups. The Kolkata-based company has put funds into Fireside Ventures and is closing an investment round in another fund, Puri said, without disclosing details. “While FMCG is a focus area for startup investment, we are not closed to other opportunities either,” he said.
ITC is finalising plans to open standalone exclusive stores in, for example, airports. The idea is to showcase its entire FMCG range under one roof, not to compete with traditional sales channels, Puri said. Consumers can, however, buy from these stores. The company will also expand its ecommerce store front, itcstore.in, to sell all FMCG products from August. At present, the website sells chocolates and coffee. It will start with deliveries to Mumbai, Delhi, Chennai, Kolkata, Bengaluru and Hyderabad initially. The company has tied up with ecommerce logistics partners for last-mile delivery. Its own ecommerce distributors will fulfill orders. “Eventually, we may even merge the ecommerce site for Classmate notebooks into this and will also launch an app for itcstore.in,” said Puri.
ITC also plans to launch 40-50 FMCG products every year to achieve `1lakh crore in revenue from this business by 2030. It launched 50 FMCG products in 2018-19, its highest ever in a single fiscal. Puri said the company has launched 26 products this year. The industry has been facing a slowdown from the second half of last year, Puri said.
ITC, however, is optimistic about long-term growth due to India’s low per capita consumption and demographics. “Some of the policy directives and reforms will also lead to higher consumption. We are not pulling back our investment and it will, in fact, go up due to the opportunities that will come,” he said.
Separately, ITC said in a filing to the stock exchange that it had appointed Ajit Kumar Seth and Anand Nayak as additional directors to its board. It also appointed SRBC & Co llp as statutory auditors for five years, replacing Deloitte Haskins & Sells.