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FMCG: FMCG, retail showing resilience to grow and evolve post-pandemic: Report


FMCG companies should redefine the channels to create a digital ecosystem to reach end-consumers and focus more on sustainable initiatives, including responsible sourcing, sustainable production, and packaging to conduct business responsibly, according to a report.

The FMCG and retail industry is exhibiting “resilience” to grow and evolve in ways that create more value in the future for the entire chain and bounced back from the second wave, said the latest Deloitte-FICCI report released on Thursday.

Companies are consciously identifying blind spots across their operations to incorporate flexible and sustainable initiatives as an integral piece of their business model, it said.

The COVID-19 has fundamentally changed consumer demand, challenged the integrated supply chains, and altered some category dynamics forever, thus defining a “new normal” for businesses,” it said.

While discussing about the channels of the future, the report said now “growth in evolved mom-and-pop stores (called evolved GT) will be fuelled by technology adoption, digitisation, and urbanisation,” it said.

Digitisation is enabling kiranas and opening new growth opportunities for the FMCG sector.

The FMCG companies need to explore their Direct to Consumer (D2C) operations and expand their social commerce,

Moreover, “e-Commerce will continue to grow faster in some categories, such as cosmetics, baby care, and wellness,” the report said.

According to it, the B2C online retail will be prominent in metros/tier 1 and 2 cities, while category specialists/start-ups will continue to target niche segments in the FMCG segment.

Moreover, new models such as – O2O (online-to-offline), social commerce, subscription services, EBOs, will have a sizable share of the retail pie.

“The emergence of omni-channel distribution will merge all channels for the consumer,” it added.

According to Chair FICCI FMCG Committee Madhusudan Gopalan, the FMCG sector is well-positioned to rise to the challenge as companies have accelerated innovation across every business aspect – product development and marketing, manufacturing, retail, or strengthening the organisational culture in the new normal.

“Although the outlook for the FMCG sector remains positive in the long term, challenges remain in the near term. The most competitive advantage that will help businesses chart their course through uncertainty, and the fast-evolving consumer and retail landscape will be Resilience,” said Gopalan.

Resilience needs to be built into every aspect of the business rather than bolted on as an additional muscle.

“It needs to be built into the manufacturing process, daily operations, retail and logistic channels, consumer insights, and communication. It should also be a part of the way we recruit, train, and develop people. This will enable businesses to withstand short-term challenges and continue creating value for consumers and the economy,” he said in the executive summary of the report.



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