Marico commits Rs 70-100 crore to increase direct distribution reach over next 3 years

“This is a very, very big bet for us where we have put a dedicated team, including senior leadership, to drive this as a big bet over the next few years,” said Saugata Gupta, MD and CEO. The project will not have any impact on profitability, the management clarified.

Marico has identified two key strategies aimed at enhancing its distribution quality. Firstly, there is a significant focus on transitioning from indirect distribution channels, typically reliant on wholesalers, to direct reach. This shift not only expands product range and assortment but also provides greater control over pricing and market visibility, particularly in rural areas, the management noted.

Marico acknowledges that amidst the challenges posed by COVID-19 and its diversification efforts, direct distribution improvements may have been overlooked. “However, the company is now committed to prioritizing investments in infrastructure, operational efficiency, and technology to bolster its rural distribution network,” the management said.

Marico views direct distribution as a long-term competitive advantage, especially against smaller players lacking the resources for such investments. This strategic shift is expected to drive broader product availability, increase market penetration, and reduce reliance on indirect channels for growth, ultimately strengthening Marico's position in regions like North India where it aims to improve its market share.

Earlier on May 6, Marico reported a consolidated net profit of Rs 320 crore for the fourth quarter of the financial year 2023-24, up 4.9 percent from the year-ago period. Revenue increased 1.69 percent from the previous year to Rs 2,278 crore.