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3 Things To Expect In 2021 In FMCG Industry

Every big box retailer, e-commerce channels and big distributors have realized that having a trade control over last mile distribution is one of the most powerful things anyone can have in the FMCG industry.

Photo Credit : Shutterstock

FMCG sector is the fourth largest sector in the Indian economy. While FMCG sector faced initial disruptions due to the pandemic even after that it is expected to reach a market size of $220 Billion by 2025, with the share of unorganised market in the FMCG sector falling, the organised sector growth is expected to rise with increased level of brand consciousness, augmented by the growth in modern retail. Here are 3 things to expect in 2021 in FMCG industry:

1. Communities will sell in the future: As per the latest trends, all future sale is expected to come from communities. If we go according to the research, 57 % of the people purchase due to personal recommendations they receive from family and friends. If you want to sell in the future, your best bet will be to sell through like-minded groups of people like bike clubs, vegan clubs, nutritionists, gyms, retail associations, WhatsApp groups, etc. We built a community of housewives with similar interests on several whatsapp groups and with that we are seeing our brand Jadugar Detergents get strong orders from people who were never our customers before but now are trying the brand because of other existing customers who are members in the same group.

2. Private Label will come out stronger: Every big box retailer, e-commerce channels and big distributors have realized that having a trade control over last mile distribution is one of the most powerful things anyone can have in the FMCG industry. It's one of the easiest ways to increase the profit margin. People who have this power now want to look for ways to make margins beyond what they are getting from other brands in terms of profit as well as customer loyalty and that’s why all these Supermarkets, distributors and aggregators are now launching their brand in almost all the categories. This way, they can have better control over margins and brand loyalty along with last mile distribution. At Shamani Industries this happened when few of our biggest sellers including Avenue Supermarts Ltd (DMART), ShopKirana (Safoya) etc. approached us to manufacture products under their brand and become their contract manufacturing partner for several home care products like detergents, dishwash gels, toilet cleaners etc. This trend is only going to get bigger & bigger in coming years from 2021 itself.

3. Remote work will persist: Covid has led to multiple changes even in the ways organization functions. Work from home has become the new normal and in this remote work era, organizations need to figure out a way to connect and strengthen relationships with their stakeholders without meeting them in person, because in this new normal prospecting is done while sitting at home, deal is made while sitting at home and hence the after-sales relationship building will also be done through the same way. Organizations and individuals need to embrace this change and come up with new ideas to connect via zoom/google hangout/jio meet etc. I believe that 100% work from the office will never happen again. There will be a hybrid model that will evolve where people will work from home for three-four days a week. Organizations will decide which people will be required to work from the workplace. Along with this, a new skill which people need to learn is conducting business through virtual meetings. They will need to learn new etiquette and oratory skills to conduct business through Zoom meetings since this is what the situations demands now and how things will go from now on.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Raj Shamani

Founder of Shamani Industries

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