60% Fast-Moving Consumer Goods (FMCG) companies say e-commerce is critical platform for sales

A recent NielsenIQ study reveals that over 60% of Fast-Moving Consumer Goods (FMCG) companies consider e-commerce their most critical sales platform, with nearly 75% of mid-sized businesses prioritising it as their top channel. The report highlights that emerging manufacturers are experiencing 1.5 times the growth in e-commerce compared to category averages in segments such as noodles, refined oil, biscuits, coffee, and packaged atta. Executive Director for Emerging Brands at NIQ India, Ms. Pallavi Suresh, noted that Indian businesses increasingly recognize digital as a key operational channel and are adopting targeted strategies to capitalise on its growth. She added that these shifts in channel preferences reflect a broader retail transformation in India, emphasising the growing importance of omnichannel strategies.

The study also reveals that convenience stores have achieved high penetration in India, reaching 48%, compared to the global average of 18%. Large companies are leading the way in leveraging this channel (58%), followed by medium-sized businesses (54%). While traditional retail remains significant for large enterprises, online and convenience stores dominate for small and medium-sized businesses. The market measurement data from NIQ shows that the fastest-growing categories for FY24 till September include ready-to-eat products (+52%), salty snacks and refined edible oils (+41%), biscuits (+40%), and packaged atta (+39%). In response to inflation, 75% of large businesses, 67% of medium-sized, and 66% of small businesses are adjusting their pricing strategies. To protect their market position, 50% are replacing materials with cost-effective alternatives, 49% are investing more in distribution, and 47% are reviewing their product lines and marketing investments.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.