Reckitt Benckiser to Share Prof­its with its In­dia Ecomm Staff

Move part of co’s ef­forts to fuel growth, take first mover ad­van­tage in the gro­cery ecomm in In­dia

The Economic Times - - Business Of Brands - Ratna.Bhushan@ times­group.com

New Delhi: Reckitt Benckiser (RB), the maker of Det­tol and other health and hy­giene prod­ucts, has kicked off a profit-shar­ing ar­range­ment for its ecom­merce team to drive growth and be among the first to take ad­van­tage of on­line gro­cery sales in In­dia. In China, the ecom­merce chan­nel al­ready contributes up to 30% to RB’s over­all sales. This is the first time RB has of­fered profit shar­ing as part of its com­pen­sa­tion for em­ploy­ees across lev­els and will be in ad­di­tion to rou­tine bonuses.

The step is aimed at fu­elling prof­itable growth and giv­ing em­ploy­ees “own­er­ship”, RB South Asia re­gional HR di­rec­tor Udayan Dutt said. “Fo­cus on per­for­mance and re­ward­ing su­pe­rior achieve­ment has been an in­te­gral part of RB’s sys­tems and cul­ture,” he said.

The profit-shar­ing pro­gramme cov­ers five em­ploy­ees of the com­pany’s ecom­merce team from the sales, mar­ket­ing and dig­i­tal func­tions. So far, profit-shar­ing had been re­stricted to a com­po­nent of the vari­able pay of part of the lead­er­ship team. An RB spokesper­son said there would be a cap at a spe­cific level, de­clin­ing to di­vulge de­tails. He said the pay-out would be based on net rev­enue and gross mar­gin achieve­ment against tar­gets.

The move could be one of the first such ones among consumer goods com­pa­nies in the country, ac­cord­ing to Vib­hav Dhawan, man­ag­ing part­ner at search firm Pos­i­tive Moves Con­sult­ing.

“Reckitt Benckiser is known to have al­ways had an ag­gres­sive in­cen­tive pol­icy. So far, gro­cery ecom­merce has been nascent in In­dia but moves such as th­ese in­di­cate that consumer goods firms are ag­gres­sively look­ing to tap mul­ti­ple chan­nels by shop­pers,” he said. Ju­nior em­ploy­ees at the In­dian

In China, the ecom­merce chan­nel contributes up to 30% of Reckitt Benckiser’s over­all sales

arm of the Bri­tish health­care prod­ucts maker can earn up to 40% of their fixed salary as bonus, while for the top man­age­ment, the max­i­mum bonus could be as much as one and a half times the fixed salary.

Al­most 150 mil­lion con­sumers will spend about $40 bil­lion on gro­cery shop­ping by 2020, ac­cord­ing to a re­port by the Bos­ton Con­sult­ing Group and the Con­fed­er­a­tion of In­dian In­dus­try. The emer­gence of chan­nels such as ecom­merce, the pro­lif­er­a­tion of In­ter­net con­nec­tiv­ity and con­sump­tion of dig­i­tal me­dia will re­shape the FMCG sec­tor, the re­port said. “Ecom­merce in In­dian FMCG will be big­ger than the mod­ern trade chan­nel in the next few years,” BCG se­nior part­ner and di­rec­tor Ab­heek Singhi had said while re­leas­ing the re­port four months ago.

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