KIT: Impact of modern retail on the FMCG sector

Strategic tools for the practising manager

SEVERAL BENEFITS: Modern retail can have many benefits for different product categories, including greater penetration, wider product range, ability to display products attractively, direct interaction with the consumer, and the ability to run specific promotions.

RAPID EXPANSION: Many FMCG players have increased their investments in modern retail. There is also greater acceptance from the consumer. The top ten Indian players alone are estimated to make an investment of $30 billion, while the rate of growth of FMCG modern retail is expected to rise from a current 6 per cent to 25 per cent by 2018.

GROWING AFFLUENCE: Rising affluence and an increasing shift towards packaged and branded goods is one of the main reasons for its growing affinity.

HIGH SHARE: Modern retail in FMCG is estimated to account for one-fourth of the total FMCG sector, which is relatively large, given the high concentration of this sector in urban areas.