Mondelez strives for $1 billion online sales in India by 2020

Mondelez saw sales rise by about 6% in the year to March 2017, better than a year ago. Image source: Reuters

The maker of Cadbury and Oreo, Mondelez, said that its Indian business will be crucial to building its global ecommerce sales as it strives for $1 billion in online sales by 2020, reports ET.

"As a company, we have taken a big bet to build a billion dollar business online in snacking by 2020. A third of that would come from Asian, the Middle Eastern and African regions and India will really be a key market for us. By 2020, online business will get to about 5% of our overall sales in India from less than 1% now," Ganesh Kashyap, head — e-comm, AMEA at Mondelez International, told ET.

The company has been selling its products online through Amazon and Big Basket, but since last year it has been strengthening its relationship with the online marketplaces by having exclusive product customisation and promotions. It set up a virtual chocolate store on Amazon India, launched Bournvita biscuits, Cadbury Fuse, Marvellous Creations and Silk Oreo first on various online portals before rolling them out at traditional retail stores.

According to the report, the company also expects additional revenues to come from newer platforms — it launched its own portal in India, marking its entry into the ecommerce business, especially to cash in on the premium gifting market.

"We don't expect to be a retailer, but in gifting, there's a real opportunity for personalisation of gifts. We as a company want to push the frontier in the space ," Kashyap told ET.

The report also says that the digital push comes at a time when health-conscious consumers are cutting back on discretionary spend, forcing chocolate and confectionery makers in India to post near-decade-low growth in sales last fiscal.

Mondelez saw sales rise by about 6% in the year to March 2017, better than a year ago, but far from the double-digit growth it had posted in most of the past decade.

According to GlobalData, relative y-o-y volume growth in confectionery market slipped to 9.9% in 2016 from 13.3% in 2015.

E-commerce is showing signs of leapfrogging modern trade, Mondelez said. In 2016, the company's e-commerce net revenue grew more than 35% globally.

China remains one of its biggest growth drivers with online sales already accounting for 10% of the country's overall revenue.