Leveraging the value of Supply Chain
Many a man has turned his gold into smoke, very few can do the opposite.
All hail ITC Limited.
With over 100 years in the tobacco industry, ITC is a mammoth that controls 77% of the organized cigarette market share in India. This division alone contributes 38% of the company’s revenue. What comes a close second is their FMCG division with 25%.
What I had no idea about was that the FMCG division thrives on the sale of cigarettes. How many times have you got Sunfeast, Candyman and Bingo in the name of change while buying your Classic?
Push marketing at its finest with a synergy of a trusted distribution network built over a century. A network where ITC products are sold in 4.3 million of the 8 million estimated retail stores.
How does that work? Say for example, a retailer buys 1000 packs of cigarettes, he must buy 1000 Bingos which he is additionally incentivized to sell as well. So, ITC wins both ways, it is making 80% profit off one category while generating a side income from the other at 33%.
With these two divisions alone bringing in about 37K crores in revenues, talk about two birds one stone (smoke).