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Best FMCG deals in store for Amazon Prime users

Online marketplace Amazon will double discounts offered on daily consumption products during its Prime Day sale starting July 16, upping the ante in a fiercely competitive and rapidly growing online grocery market.The marketplace will offer best-ever deals on FMCG products across categories such as food, grocery, staples, beauty, personal care, baby care, detergent and home care during Prime Day, with the backing of brands, said Saurabh Srivastava, director, category management (FMCG), at Amazon India.Large consumer product firms such as Marico, Britannia and Parle Products confirmed they will offer discounts on value-added products during Prime Day sale, while maintaining parity across trade channels on mass products. “We will offer discounts on developmental, premium and niche products,” said Varun Berry, managing director at biscuits maker Britannia.“It helps them (Amazon) because of the profile of consumers they focus on, and it helps us get trials,” he said.Amazon’s Srivastava said there will be discounts of 50% on brands such as Nivea, Kaya and Saffola Oats during the 36-hour sale exclusively for Amazon Prime members, up from earlier highest discounts of 15-25% offered on these products. For diapers, discounts will be about 45% against earlier best deals of 35%, while on protein supplements discounts offered will be up to 70%, he said.“People associate Prime Day for best deals on mobiles and electronics. While that will remain, FMCG is one category where consumers can engage with us on a daily basis,” Srivastava said.There would be deals on brands such as Colgate, Ariel Matic and Royal Canin, while brands like Nestle, Nivea and L’Oreal will launch exclusive products, he said. “Apart from outright discounts, we will also offer Rs 2,600 cashback through the year to consumers who purchase FMCG products of more than .`1,000,” Srivastava said.Head of a leading fast-moving consumer goods seller said Amazon is going all out to acquire customers. “Amazon wants to burn money on food and grocery discounts since it wants to enter the monthly and weekly purchase habit of consumers which leads to recurrent orders,” the person said on condition of anonymity.Chief of a leading food company said Amazon is trying to attract buyers for everyday items such as salt, sugar and pulses, which till now has been the domain of online grocers Big Basket and Grofers.Industry executives said Amazon will perhaps offer the highest discounts on its own labels within personal care and grocery. Amazon recently ventured into pulses under its own brand Vedaka. It has also launched own brands in categories such as nuts, floor cleaners, kitchen paper, and aluminium foils.Despite the aggressive discounts Amazon has lined up for Prime Day, its competitors don’t expect the event to trigger a discounting war in online grocery space.“While Amazon may reach out to FMCG companies to support sales, FMCG companies will not allow deep discounting since that will disrupt their pricing structure and they can’t sell at a loss,” said Albinder Dhindsa, cofounder of Grofers.com. He, however, said Grofers will continue with its strategy of everyday low pricing.Price war or not, Amazon clearly wants to establish as a marketplace for daily use products, hence the focus on FMCG, staples and groceries during Prime Day sale.A Crisil report released earlier this year estimates the online retail sector in India to grow 250% in three years from 2016-17 to 2019-20. Grocery is expected to be one of the fastest growing segments with 65-70% compound annual growth rate, though from a small base. The report expects online grocery market to almost quadruple in three years to Rs 100 billion in terms of revenues.India is among 17 countries participating in Amazon’s annual event for its Prime members on July 16-17.Amazon Prime is estimated to have 10 million subscribers in India, out of 100 million subscribers globally. India is the fastest-growing market for Prime with the number of subscribers in the country having doubled in the last 12 months.Amazon India has more than 20 lakh FMCG products on its platform and serves more than 20,500 pin codes across the country. It also offers next day delivery service on FMCG products under Amazon Pantry in 34 cities.

Source: ET

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