Thursday, July 14, 2016

FMCG industry steps up its digital game in 2016

The FMCG sector paints a positive picture for the upcoming year. The industry is expected to grow to a size of $103.7 billion in the year 2020, reports India Brand Equity Foundation (IBEF). Rises in income levels of the working class, and favorable demographics, will lead to increased consumption and can lead to the above stated result.

Another large driver is the rural FMCG market, which is expected to grow at CAGR 18.1 percent. Rural India is catching up fast as income levels rise. IBEF reports that the total Indian rural income is projected to reach USD 1.8 trillion by 2018.

“This is one of the best times for technology to make a difference to the FMCG sector. For instance, in terms of distribution, growth and improvement has been underpinned by technology. Be it in terms of supply chain analytics or use of mobility to gain faster access to consumer data,” says Asheesh Malhotra, partner, IT Advisory Practice, EY.
Another catalyst accelerating the growth of the sector is digitization. If you look at things from the consumer’s standpoint, consumerization happened mainly because digitization gave it a huge thrust. “E-commerce puts consumer at an advantageous position. Companies have done better targeting of their user sets in 2015, which has given them an opportunity to grow,” says Malhotra.
Other initiatives FMCG players are taking on for FY16-17 are improved digital marketing techniques and using advanced tools to analyze consumer’s consumption patterns better. All this is again underpinned by the strategic use of technology.
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