Honasa to bring down inventory holding period for Mamaearth distributors
Mint, potentially alleviating their burden of keeping 90 days of stocks. Acknowledging that Honasa's overall inventory with distributors is higher than that of other FMCG companies, Alagh said as the company changes its distribution model from super-stockists to direct distributors, which was announced during Q4 FY24 earnings in May, the supply chain will be streamlined, helping bring down the holding period. Honasa has also signed a partnership with third-party logistics company Delhivery to use its mother warehouse, the CEO said.
“We can't take the risk that we reduce inventory because our ability to service distributors goes away. That is what we're working on. We have a partnership with Delhivery where we are doing some supply chain enhancement.
Post that, over the next few quarters is where the next phase of inventory reduction will take place," Alagh told Mint. Last month, the distributors had raised concerns over excessive inventory that the personal care company had dispatched to the market. They also complained about delays in replacing damaged, unsold, and expired stock.
The All-India Consumer Products Distributors Federation claimed that distributors were stuck with 90 days' worth of stocks or goods. Fast-moving consumer goods (FMCG) companies typically supply stocks for 20-30 days. Honasa reported a net profit of ₹40.2 crore in the first quarter of FY25 on Friday, driven by an aggressive expansion of its retail distribution network and gains in the facewash category.
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