Companies looking to increase their product penetration in the Indian FMCG market can employ several effective strategies. Key approaches include:
- Understanding Consumer Preferences: Conducting thorough market research to tailor products to local tastes and preferences.
- Expanding Distribution Networks: Strengthening relationships with distributors and leveraging both traditional retail channels and modern trade formats.
- Adapting Marketing Strategies: Creating targeted marketing campaigns that resonate with diverse regional audiences and utilizing digital marketing to reach younger consumers.
- Enhancing Product Accessibility: Ensuring widespread availability through efficient supply chain management and partnering with e-commerce platforms.
- Leveraging Local Partnerships: Collaborating with local brands and influencers to build brand credibility and increase market reach.
Tecnova supports companies in enhancing their FMCG product penetration by providing market insights, developing strategic partnerships, and optimizing distribution and marketing strategies, ensuring effective and sustained market presence in India.
How do Companies increase their Product Penetration in Indian FMCG Market
The Indian FMCG market is anticipated to escalate at a CAGR of 14.9% and reach USD 220 billion by the financial year 2025. Moreover, the processed food market of India is expected to grow from USD 263 billion in FY 2019-20 to USD 470 billion by FY2025.
Growing awareness increased income and changing lifestyles are the reasons behind the growth of these sectors. Moreover, the brisk pace of FMCG brands clubbed with effective government initiatives and flexible regulatory framework has made the industry attractive to foreign investors. However, the best way global conglomerates can establish their ventures and explore the vast diversified Indian market is by seeking prompt assistance from the best FMCG consultants in India.
How the Indian FMCG Market Developed in the Current Climate?
The Indian FMCG Market has undergone massive transformation and is considered the fourth largest sector in recent times. The growth recovery of this sector can be attributed to several government initiatives, high agricultural produce, lower unemployment rate, etc. Increased rural consumption also leads to the growth of the FMCG sector.
As 100% FDI (Foreign Direct Investment) is allowed in food processing as well as in single-brand retail models, it strengthens domestic employment and distribution supply chain.
For instance, Dabur India has declared that 100 electric vehicles will be inducted into their supply chain In April 2022. Such a move will lower the carbon emissions per year. Furthermore, PepsiCo India has put forward their expansion plans for the largest greenfield foods manufacturing plant that processes Lays with an investment of the amount of USD 23.84 million.
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Identifying the Right Supply Chain Channels
A robust supply chain is one of the top factors determining a company’s success. Hence, identifying the right one goes a long way in helping FMCG sectors increase their product penetration in India. The supply chain must be laid down at a strategic level within the firm. It is a low-margin business where volume is a significant determiner of its success.
In this sector, getting the right product delivered to the right customers at the right time is vital. From production, collection, and delivery to customs clearance, every stage in the supply chain is prone to risks.
Optimizing a supply chain brings transparency to the sector and assists firms in recognizing cost-intensive operations. It also helps minimize waste and save carbon footprint.
The Indian FMCG Market deals with perishable commodities that need demand the right supply chain optimization. Another parameter that leads to the success of these FMCG sectors is the potential of the sector to build and maintain a proper distribution network.
For a wider penetration, the availability of products is extremely important. A product out of reach will soon be out of the consideration set. Hence, it is imperative to integrate an unequivocal supply chain strategy. By elevating supply chain management, Indian FMCG Market can enhance their growth and profitability.
Importance of Partnering with E-Commerce Players for Increased Product Penetration
The influence of e-commerce on overall FMCG sales is anticipated to level up to 11% by FY 2030. As a result, E-commerce platforms play a significant role in enhancing the product penetration of FMCG companies.
The outbreak of the pandemic has had a significant impact on the shifting preference and reliability of e-commerce platforms. With the unforeseen pandemic, FMCG brands were compelled to shift to online platforms and integrate new apps to ensure their business runs and fulfills the increasing demand of the population.
As consumers are using the official websites of different FMCG brands, it has become easy to note their purchasing patterns and build a one-to-one relationship with a consumer.
E-commerce platforms hold an unparalleled role in building a brand franchise. E-commerce aids FMCG sectors by extending a seamless user experience to consumers. Moreover, in the future, the collaboration of e-commerce platforms and FMCG companies can widen the scope of FMCG brands and help them unlock their higher sale capability.
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Return on Investment Assessment Regarding Sales and Marketing Programmes
Return on Investment (ROI) is an effective performance measure that helps firms compute an investment’s returns. It is a very important analytic that acts as a benchmark for enhancing future market strategies. Assessing ROI also assists investors in understanding which investment opportunities are preferable. For an FMCG brand, calculating ROI is vital as it helps understand the condition and functioning of the FMCG distributor business.
Another important parameter that will help FMCG (Fast-Moving Consumer Goods) sector boost its product penetration is to develop a robust marketing program. Marketing helps a firm distinguish its brands and create an identity. Marketing strategies, including flanking, brand extension, PLC strategy, etc., help boost the sale of FMCG products
Role of FMCG Business Consultant
The Government of India has allowed 100% FDI in single-brand retail and 51% FDI in multi-brand retail, leading to enhanced FDI inflow. Moreover, the approval of the PLI (Product Linked Incentive) Scheme for the food processing industry will help Indian food product brands to make significant positions in international markets. Such investment-friendly offers lucrative opportunities for foreign firms.
FMCG business consultants in India like Tecnova assists global conglomerates in sailing through the business environment. Such firms will help investors cater to the ever-shifting customer preferences and have a blueprint of supply chain strategy.
Top FMCG industry consultant in India, Tecnova offers Global business giants 360-degree competitive assessment, retail rollout, regulatory compliances, expansion, and growth advisory. Foreign investors will also get assistance for partner search, vendor and distributor acquisition, etc.
Such firms will provide a well-rounded idea regarding customised India-centric strategy and help foreign firms with manufacturing set-up ideas.
Reference
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