FMCG Distribution Industry
There is no doubt that India is a high-growth market. The key challenge facing an FMCG is to grow its market. Considering the sea change that social and economic landscape in India is undergoing, and the competition looming in to grab this opportunity, having sustainable strategies to grow the market by increasing penetration and consumption and holding on to it is an FMCG companies’ key challenge.
On one hand, there are urban consumers whose spending power is growing very rapidly and who are becoming quite discerning in their taste about the products and brands they use which is why FMCG need to make sure their brands remain attractive and relevant to a large number of changing consumers.
On the other, there are rural consumers which represent 70% of the population. The key challenge here for the FMCG is to ensure their products are available to these rural consumers even though they might be living in the remotest of the villages. The coverage of these markets has to be expanded by the FMCG to bring a larger percentage of rural population under its ambit.
India’s market for fast moving consumer goods is highly fragmented considering a large percentage of population still buys non-branded, non-packaged home made products. This presents a golden opportunity to branded product makers to lure this section of the population to branded products. But this opportunity presents its own difficulties. India has over six million retail outlets and there are very limited departmental stores/super markets/hyper markets. That makes logistics very challenging especially when the FMCG companies are breaking new ground.
Increasing Penetration and Consumption
FMCG are aware there is gigantic headroom to increase penetration and consumption. This is because the per capita consumption for various categories is very low. With the changing scenario FMCG can fuel their growth by deploying different strategies. FMCG have already experienced that the major contributors for its growth have been higher penetration, per capita consumption, increasing population base, and increasing household income.
Several initiatives are being taken to strengthen the brands through innovation in product quality, pricing and branding
Expanding distribution Networks
Companies are now focused on improving their distribution networks to expand their reach in Rural India FMCG companies are devising exclusive rural marketing strategies to tap the rural Consumer base.
V. S. Logistics is a leading CnF, Super Stockiest of FMCG products for Maharashtra with wide network of distributors. The firm covers a wide range of products which are distributed throughout the state.