According to a recent Emkay Research study, small FMCG (Fast Moving Consumer Goods) businesses in India are expanding at a faster rate than their bigger rivals.
Their superior innovation and product alignment with evolving adolescent tastes are the main causes of this trend.
According to the report, A brief examination of growth patterns across different business sizes reveals that smaller FMCG companies are expanding faster than their larger counterparts.
According to the report, smaller businesses have gained the advantage because they are better able to adapt and provide goods that appeal to younger audiences.
The report highlights the growth of modern trade and e-commerce, including rapid commerce, which currently accounts for about 20% of the FMCG industry, as a major factor in this change. These platforms have leveled the playing field for new brands, fostering increased competition in the market.
In contrast, the growth of major FMCG firms is slowing. Their consistent price increases, which have had an impact on customers' perception of value for money, are one cause.
Their persistent reliance on general trade, which is dominated by traditional, broad-based products, is another issue. As a result, they are less able to adjust to the shifting needs of consumers.
The report went on to say that although contemporary retail channels are doing well, there are still areas where they fall short of fulfilling the demands of new age consumers.
Particularly, large supply chain participants in modern trade and e-commerce are behind quick commerce platforms when it comes to providing a broad selection of goods, especially those from emerging and digital-first companies.
The traditional strengths of major FMCG companies are eroding as more consumers migrate to new platforms. In addition to improving consumer interaction and insights, these new platforms promote their own private label goods.
The report emphasized that the FMCG industry is seeing better growth prospects, but it also cautioned that established competitors need to step up their game, particularly in areas like product development, channel strategy, and maintaining relevance to modern consumers.
