With the festive season nearing, FMCG sector turns to technology to handle upsurge in demand


With the festive season soon approaching and customer sentiments exhibiting considerable improvements, the Fast-Moving Consumer Goods (FMCG) sector anticipates an all-time upsurge to counter the repercussions of the COVID-19 pandemic .

It has been seen that more people are willing to meet and enjoy the festivities with their relatives, which implies a further uptick in the FMCG demand.

This upsurge in demand has made zero stockouts and quick availability of fresh products along with enough market reach and improving working capital ratios as the prime area of focus for the FMCG companies. And, in order to cater to the market demand and minimise the speed bumps on their path, FMCG companies have voraciously started investing in technology.

Challenges of the FMCG sector

While the COVID pandemic has turned out to be a boon for the FMCG sector, it has also brought in some challenges.

The sudden surge in the sector has revealed the struggle of the consumer goods firm of managing a large and disparate supply chain and a far-flung retail network.

The highly fragmented Indian market spread across modern trade and different sizes of traditional retail outlets is seeing many hurdles ahead as it anticipates a further surge in demand around the festivities.

The Indian FMCG sector characterised by a complex distribution network and intense competition has forced firms to constantly work on supply chain innovation. And, with growing demand, it has become a necessity for the FMCG firms to adapt to new innovations and technologies. 

The key challenges faced by the FMCG sectors are with visibility of data and tracking of efficiencies in the entire value chain. Furthermore, due to lack of technological advancements in the sales process the sector also suffers in optimising inventory and warehouse management along with utilizing the consumer’s purchasing preferences to make selling decisions.

Also, the rise of e-retail has brought up hurdles for the one’s lacking in technological adoptions. To increase market penetration, Indian FMCG companies have realized that they need to reach out to consumers present at the lower end of the economic pyramid and have a multi-channel process. 

Technological adoption helping in revamping the supply chain and distribution networks

Technological advancements and the Internet of Things(IoT) have made a transformative impact across the FMCG supply chain process. Companies now more than ever use digital analytical forecasting and integrated operations planning strategy to assess market demand and meet the consumer expectations. They have understood that technology has become essential in enhancing growth, productivity and to make a robust company bottom-line.

It has been observed that FMCG companies have been making a shift towards complete automation, with an aim to bring the entire chain from procurement to distribution on the same platform.

Many companies have introduced new route optimisation system which geo-tagged the routes taken by its salesmen. This helps the companies to increase its direct distribution reach with the same number of sales people.

Furthermore, companies have implemented a distributor management system to make transactions both speedy as well as more accurate. It has helped in tracking secondary sales daily, manage inventory better through automated demand fulfilment, process claims online and manage master data from a centralised location.

The pandemic brought a sudden and unpredictable change in consumer behaviour which left the sector in a tough spot. In order to deal with such situations, companies have understood the importance of having a real time pulse of the market and invested in different technologies to cope up with the ever-evolving consumer behaviour.

It has been observed that more and more companies are embracing technology to gain an edge in this highly competitive environment. While technology upgrade is an on-going process, companies are actively working towards it adoption to cater the best of their services to their customers.

They have realised that it will play an increasingly important role in making sure that the product gets to customers faster and will also result in increased cost savings for these companies.

Leave a Reply

Your email address will not be published. Required fields are marked *