A joint report released by the Confederation of Indian Industry (CII) and Boston Consulting Group (BCG) has observed that ecommerce will contribute in a major way to the growth of the fast moving consumer goods (FMCG) sector. The report says that Tier 2 to 4 cities will chip in more to the demand for FMCG, and ecommerce companies will help meet the demand.
The FMCG industry in India is valued at Rs. 4,30,914 crores, and this figure is set to grow. The report cites the increase in disposable income, greater urbanisation, and more nuclear households are pushing the growth of the FMCG industry.
Abheek Singhi, director of BCG says, “The growth opportunity is massive, yet, the shape of this opportunity would be very different in the future. We expect greater premiumization, tier 2-4 towns to be the drivers of growth.”
The report advises companies to train their focus on the tier 2 and 3 cities and rural areas, as the purchasing potential is going to be huge from these areas.
In an observation that should bring cheer to online sellers, the report says that by 2020, more than 150 million consumers will be influenced by the digital world.
CII said, “Their decision making process would be influenced by digital. These consumes would spend more than $45 billion (roughly Rs. 2,98,323 crores) on FMCG categories.”
The CII is advising companies to cash in on this gold mine.
“Companies would need to build capabilities in digital marketing and would also need to push for greater clarity on the role of new emerging channels like e-commerce would play for them and how should they engage with these new channels without conflicting their brick and mortar partners,” It says.
Singhi adds to this, “The combined effects of these demographic shifts with the emergence of new channels like e-commerce, proliferation of the internet connectivity and consumption of digital media, will reshape the FMCG sector.”
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.
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