FMCG landscape in India: Today and tomorrow

Current-News

Over the last 15 years, the advantages of scale have significantly diminished in the consumer markets space in India. Contract manufacturing, organised retail, digital penetration and sourcing transparency have allowed smaller players to set up, operate and thrive in a nimble fashion.

Significant improvements towards ease of doing business, renewed enthusiasm towards entrepreneurship, and ability to identify and target micro segments have allowed players to flood the market with products that cater to specific needs of customers.

Going forward, three key elements are likely to influence who wins the marketplace.

AGILITY
Shorter time-to-market, faster decision making and asset light operating models have allowed newer firms to target unmet or under-realised needs by adding multiple products to their portfolio, and taking course correction measures with minimal loss. In turn, larger organisations have themselves responded by re-engineering legacy processes to cut turnaround times across the value chains. A key lever towards building agility within an organisation will be the ability to collaborate.

Across the value chain, startups as well as non-competing firms are developing expertise which they would be keen to monetise. Another lever to stay agile in the marketplace will be the ability to de-centralise decision making and empower teams to take low risk-high impact decisions independently. The final element of being agile is the business’ ability to acknowledge and accept failures and take early course correction measures. Given the iterative (rather than linear) nature of agility, failure rates are likely to be higher and as long as the direct loss from the failure is absorbable, failures will have to be seen as stepping stones to successful initiatives.