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FMCG & Online retail players looking beyond conventional trade channels to boost revenues
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Thursday, 30 June, 2022, 15 : 00 PM [IST]
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Nishkarsh Tiwari
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Fast-moving consumer goods are the products that have the usage in our everyday life. These products are generally replenished quickly and are to be re-used for the next day in the markets. These are the customer-packed goods (CPG) which could be groceries, clothes, food, and beauty products, as this has been a regular task for the retail traders.
It demands more functioning in their sections. Regular trading of FMCG will require more employees to manage the system. When talking about conventional trade, this emphasizes the expansion from the developed countries to the developing countries.
We all know that India is a developing country and our population limit is still counting at every second, we need to think about the employment generation. Talking about this industry, this is a never-ending market and will never be in the loss entitling in revenue generation.
These companies are working on more innovations for those products which are readily available to consumers and give more profit to retailers. The focus for the sales is more on those perishable consumer goods. The sale of these companies' products is affected by discounts they provide to retailers and the market season. If I talk about the distribution system for FMCG, they have producers, wholesalers, and retailers.
This type of distribution enables producers to reach the end consumers and wholesalers.
Some things need to be taken care of if we need to increase revenue from PCG. Since the products are sold through dealers so we need to take care of their margins. The supply of the products which are comparatively more saleable needs to maintain stock for consumers. We need to establish our relationships between FMCG companies and retailers, company.
As per research, the FMCG industry has had great growth from 2012 till now, especially in Covid-19, this industry had a great boost and revenue has increased by 2-5%.
There are more strategies to generate more revenue for every order of FMCG. We should offer more deals to retailers of FMCG industry so that they should be having more choices of products. We can give more personalized experience which is agreeable to customer and will increase order value. We can offer more promotions to consumers as they are PCG's, ultimately giving more revenue.
We should give the least amount to retailers for minimum order while shipping. We should also the method of up selling of the products which are more expensive and are also in demand. So we need to offer these products very ethically and smartly. We should also offer cross selling involves offering related or complementary products to a customer.
In fact FMCG is 4rth largest sector in our Indian economy. According to India Brand Equity foundation, this industry has been segregated in three segments - food and beverage (19%), healthcare (31%), household and personal care (50%). If we focus on the FMCG market, it is expected to increase by US$ 220 billion by 2025.
Despite lockdown in 2021, this sector has grown 39% in various parts of the country. In fact, nowadays Ministry of Rural development has tied up with different large companies to enhance the FMCG products and their supplies to boost the revenue and employment.
These online portals also play a major role in expanding this industry as it is touching home to home. As the population is increasing these industry helps in getting more employment from low level to high level summarizing in become a large company. According to researchers, Hindustan Unilever Limited (HUL), ITC Limited, and Nestlé India are some of the most famous FMCG companies in India 2022. After the pandemic demand has picked up in different categories not only in one sector but also in different sectors as well as in general trade.
The growth of e-commerce has given new wings to this growing industry new and existing players are taking their business with their connections and formal links. Being part of the e-commerce business, they expand their footprints in different sectors as well. The trends in the FMCG industry come up along factors of sustainability, customer experience, digitization, FMCG e-commerce, data analytics, and artificial intelligence, direct distribution among distributors, popularising products, and chains of competition among industries.
Moreover, the revenue growth of the FMCG factor is likely to increase double revenue in the upcoming year as the price rise is implementing an impact on raw materials.
At last, I would like to conclude that this industry has a good scope to grow and have greater revenue generation compared to other industries. The growth of this drastic and no doubt it will generate revenue and employment, not at this point of time and but forever as their products have never-ending demands. In order to satisfy our customer needs, this industry is taking more steps for better customer satisfaction.
(The author is assistant professor, Sunder Deep College Of Hotel Management. He can be reached at nishkarsh@sunderdeep.ac.in)
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