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ITC gears up for big FMCG sales push through paanwallahs
The Economic Times - 10 Dec 2013

ITC plans to shake-up distribution of fast-moving consumer goods by rolling out its entire range of packaged food and personal care products through lakhs of paan shops across India, taking advantage of relationships it has built up with paanwallahs over the years through the cigarette business.

The strategy is in sharp contrast with that of rivals, which mostly sell confectionery, snacks and at best sachets of shampoos and detergent through paan shops.

ITC, on the other hand, even plans to sell its premium cookies and cream biscuits through them. It will offer Sunfeast biscuits, Yippee instant noodles, Vivel soaps, Mangaldeep agarbattis, Dark Fantasy Choco Fills and Choco Meltz biscuits, Delishus cookies and Engage deodorants through these outlets, known to the trade as the paan-plus channel.

As part of the initiative, ITC is sprucing up the outlets and training the paanwallahs to sell soaps, biscuits and noodles.

Directly servicing the paan shops over decades has allowed ITC to forge close ties with them, said Sanjiv Puri, the company's divisional chief executive in charge of FMCG trade marketing and distribution. These outlets are already contributing significantly to some of the product categories, he said, declining to elaborate on the numbers.

"Several of the paan-plus shops in prime localities in cities have their own dedicated clientele and sell an assortment of consumer products," Puri said. "Consumers can top up their requirement from such outlets the way neighbourhood convenience stores serve the purpose in the West."

ITC has already made some progress with its initiative, having reached over 10 lakh paan-plus outlets with its packaged food, personal care and stationery products.

That's almost half the number of stores that ITC reaches directly with its non-cigarette FMCG products.

ITC's FMCG products are sold in more than 60 lakh outlets across the country. This campaign has given ITC a big lead in the paanplus channel, especially over peers such as market leader HUL, which has a much bigger advantage in its reach through neighbourhood stores, a senior analyst said.

"Being a relatively new entrant, it is still some years before ITC can build kirana store access like HUL," the person said. "It is here the paan shops can boost ITC's market share."

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