BCG Report: E-commerce and digital trend to reshape FMCG

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Across the next decade, India is likely to witness a 70 percent increase in the income levels that will lead to the emergence of an all new middle class, new cities, and urbanization. This will happen as around 100 million will be added to the workforce. The BCG (Boston Consulting Group) and CII predicts that these to happen in the next decade.

The joint impact of the demographic shifts and the emergence of new channels such as proliferation of the internet, e-commerce, consumption of digital media and connectivity will reshape the FMCG segment.

By the year 2020, around 150 million consumers are likely to be digitally influenced in the FMCG sector and these digital consumers would spend around $40 million on FMCG categories. This was stated by the national FMCG summit report that was release by BCG and CII.

D Shivakumar, the CEO and India Chairman of PepsiCo was quoted stating that FMCG has to be re-imagined for the future due to the varied changes and chances that are seen in the sector.

Abheek Singhi, the BXG Senior Partner and Director stated that the growth opportunity offered by this shift will be massive and the shape of the same will be diverse in the future. He stated that a great premiumsation, and increase in growth due to the tier 2 – 4 towns are expected.

Re-imagining FMCG in India, the report, assesses the impact that will be caused by these trends and the imperatives for the consumer goods companies.

As per the report, the households with Rs 10 lakh annual income or lesser are expected to account to 50 percent of the spending in the FMCG category. This will lead to premiumisation across the categories from the branded to unbranded ones and luxuriating of the products.

The digital segment is attracting several venture capital and private equity funding, but the firms are not clear about the opportunity. The report adds that the FMCG companies should examine how they need to use the digital means to improve their business.