8,083.80-170.0
Stock Analysis, IPO, Mutual Funds, Bonds & More

Market dynamics are different for all channels; e-commerce ecosystem will stabilise: Tupperware MD Deepak Chhabra

Tupperware India's managing director Deepak Chhabra talks about how integrating the direct sales force with the retail franchisee model is working for the home and kitchen-ware maker.

, ET Bureau|
Last Updated: Feb 07, 2020, 01.49 PM IST
0Comments
1
Deepak Chhabra, Tupperware MD
New Delhi: Direct selling company Tupperware India, wholly-owned subsidiary of the listed global Tupperware Brands Corp, is tapping e-commerce and physical stores to push sales at a time when direct selling is turning somewhat less relevant at least in larger cities. The company’s India managing director Deepak Chhabra talks about how integrating the direct sales force with the retail franchisee model is working for the home and kitchen-ware maker.

Why did you move beyond direct selling?
Direct selling is becoming somewhat less relevant in larger cities, though it is still relevant in smaller cities. Secondly, supply chain is a bit of a concern. If I am a seller, can I show you the entire range? No. And if you order, you get it within some 12 days. So that was not keeping with the times. So we decided to set up retail stores — where the consumer can see, pay and buy. That is what prompted channel segmentation. Within five months, we have 45 exclusive franchised outlets – we moved very fast.

So has the core business model slowed down?
Our challenge was consumers needed us and we were not available, largely because the business was operating at the single level of direct selling. We have a direct sales base of 70,000 women and we were not able to penetrate everywhere. So we decided we will sell the way the consumer buys – through direct selling, retail stores and e-commerce both on marketplaces and our own webstore. We didn’t want to miss any consumer. This year we are looking at growing 20%; we grew at this pace maybe in 2013-14, after which growth did slow down.

Which of the three channels is growing faster?
Market dynamics are different for all channels. Direct selling has a large base so it can’t grow so fast.

E-commerce is growing faster because it’s new. Online now sells in some 1,200 cities, and the majority of buyers are our first time consumers. We believe the ecosystem will stabilise. Marketplaces are reaching a place where they will look at bottomlines and not just toplines. Once that happens, brand webstores will become very relevant. We are also cleaning unathorised sellers by quasi legal measures.

In terms of physical stores, this year we plan to set up 100 more stores – so by year-end we will have 150 and that will be our fastest growing channel then. India is the second market after China to opt for physical stores.

Is there any regulation for direct sellers on sales channels?
There is no regulation. We have certain additional rules we need to comply with which are somewhat different from traditional retailers.

How did you steer the transition from direct selling to traditional retail?
Direct selling works with a lot of people; but when you want to go for commercial retail, it gets into conflict. The challenge is, will direct selling be relevant? This is what is holding most direct selling companies from expanding to the commercial model. We offered our sales force franchisee options; we integrated the direct sales force and franchisees. So the strategy turns from push to pull, and it is working very well for us. The larger plan now is to integrate the webstore with all physical stores.

There’s an anti-plastic sentiment among consumers. How are you dealing with that?
Our core business is and will remain plastic, but we are working on product segmentation to give choice to consumers. Plastic requires a lot of education; our products last for generations and they don’t even reach landfills. India is perhaps the only country with this issue. Over here, sentiments are somewhat anti-plastic because consumer awareness is not there about the difference between single-use plastic and durable plastic. We are working on that messaging.

Also Read

CG Power inducts 3 independent directors including former Tupperware India head Pradeep Mathur

Tupperware containers to help NASA astronauts eat fresh food

Tupperware India’s business declines 4% in July-Sept quarter

Direct sellers like Amway, Tupperware mull steps to check online sales sans consent

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service