Dec 15, 2020
Traditional trade continues to be the backbone of the Indian FMCG sector but consumers are increasingly embracing digital channels, leading to new formats and strategies by companies. The evolution of the online and direct-to-consumer approach is “blurring” the retail formats as they are “merging and crisscrossing”, he said, adding that even the retailers are struggling with the trend.
Now an “end to end” consumer funnel has emerged at one Omni space and “These models are impacting the established FMCG value chain, which has been built in so many years. Indian companies which had “painstakingly built” the stockist and wholesale model would now have to redefine their approach.
It is expected that digital transformation will take place in the traditional trade and Kirana channels, which happened largely in tier-1 and -2 cites, to percolate down to rural areas. Technology usage will disrupt the wholesale in rural, it will benefit the company, Kirana and especially the rural kiranas.
It will make the Kirana stores richer and serve rural consumers very well, unbundling the value chain.
Shopping is changing after the pandemic and distribution should also transform.
A Rs 1,000 of sales through any modern retailing channels actually earns more money for the brand than the Rs 1,000 sales from conventional and order replenishment channels like the traditional Kirana. We must embrace modernity as a whole… the faster we collaborate, the faster we all are going to be winners.