How eCommerce Can Drive Growth in FMCG Sector in 2023


India is pushing for 5G rollout and as a result, eCommerce and Fast Moving Consumer Goods (FMCG) companies are increasingly relying on more innovative digital solutions to enhance their customer experiences.

The fast moving consumer goods (FMCG) industry has been significantly impacted by e-commerce, with online sales of FMCG products expected to reach $1 trillion by 2023, according to a report by FMCG Gurus. The accessibility and reach of online platforms that enable FMCG companies to expand their client base and increase sales are the main drivers of this expansion.

Additionally, according to a recent Nielsen report, e-commerce will account for 11% of FMCG sales by 2030. That is eight times the current level. Therefore, FMCG companies need to have robust e-commerce platforms to meet the expected consumer demand in the years to come.

Additionally, a PwC report shows that nearly 75% of customers have purchased FMCG products online, with Millennials and Gen Z consumers leading the trend. E-commerce offers FMCG companies a number of promotional features, including tailored recommendations, targeted marketing and faster checkouts. E-commerce enables FMCG companies to compile insightful information about consumer preferences and behavior that can guide product development and increase supply chain effectiveness.

E-commerce developments will benefit FMCG companies in 2023

A new class of market players is emerging that is rapidly upending the status quo and posing a significant threat to established market players through the development of digital technology and the growth of e-commerce. These digital-native companies are characterized by their creative business strategies and adaptable operational frameworks that enable them to respond quickly to changing market trends and consumer needs. Therefore, they are expected to contribute significantly to the growth of the Fast Moving Consumer Goods (FMCG) industry in the years to come.

In addition, both new and established companies are reinventing the way they do business by connecting with reliable and larger e-commerce companies. Local Kirana retailers receive digital support from new e-commerce startups to expand their operational footprint. This symbiotic relationship allows these small businesses to unlock the huge potential of e-commerce, while e-commerce platforms benefit from the rich diversity and local expertise of these traditional retailers.

This trend is driving an increase in demand for online marketplaces and small local shops that are well positioned to capitalize on the growing preference for contactless and secure delivery. As a result, we can expect continued growth in e-commerce channels, driven by the convenience and simplicity of online shopping and the ability to access a wider range of products and services.

The shopping environment has changed significantly in recent months. While retail is still sizeable, e-commerce has gained traction and is expected to continue to help FMCG companies by increasing sales, expanding market share and attracting new customers. FMCG companies benefit from the direct-to-customer (D2C) model that e-commerce fosters in a variety of ways, including:

Reach customers faster: Compared to the old system, the direct-to-consumer model enables companies to reach consumers with their products quickly. Additionally, with no intermediaries involved, businesses can generate higher revenues. In addition, D2C enables companies to reach customers in small numbers first before making the necessary adjustments to reduce risk based on market reaction.

Gaining trust: When customers visit a brand’s official website. Businesses now have a great opportunity to communicate more effectively with customers by providing a streamlined user experience, interface, and relationship-building process.

Improved Operational Efficiency: By automating inventory management and order fulfillment processes, FMCG companies can reduce costs and increase productivity. Additionally, e-commerce platforms can also be used to streamline logistics, making it easier for FMCG companies to manage the supply chain.

Effective Monitoring: Once a product is released, it is difficult for companies to track it. While manufacturers don’t know how consumers perceive a brand, retailers do. The D2C model bridges this gap by giving companies greater control over messaging and packaging marketing and a better understanding of how shoppers perceive their products.

Final Thoughts

It is now important to adapt to online shopping trends. As the new generation raised in a digital world will make all purchasing decisions in the coming decade, businesses that want to engage with consumers need to do so on the platforms they prefer. FMCG companies must seize this opportunity and make a decisive investment in e-commerce immediately.

While brick-and-mortar retail stores still have significant importance, e-commerce has gained traction and is expected to continue helping FMCG companies deliver seamless user experiences and inspire more trust. This will help attract more customers and unlock greater revenue potential and growing market share in the long term.

Ecommerce platforms and FMCG companies may soon consider expanding the reach of their online offerings by broadening their delivery coverage, offering more convenient options, and perhaps going a step further by offering products that are hard to find offline are to improve the personal experience for the customer.



The views expressed above are the author’s own.


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