C K Ranganathan (CKR), Founder Chairman, CavinKare, shares about the major transformation and important game changers that would shape the retail industry.
IE: Major changes through these years.
CKR: Urbanisation and premiumisation: Rapid urbanisation of India has led to changing consumer needs, fueling demand for premium and specialised products.
Rural emphasis: Rural India has become a focal point for FMCG players. Innovative distribution strategies and products tailored for the rural populace have become paramount.
Diverse consumer preference: With the advent of globalisation and exposure to international trends, Indian consumers have become more experimental. Brands are catering to these evolving tastes by introducing wider range of products.
Digital transformation: The integration of AI, machine learning and data analytics has revamped supply chains, marketing strategies and customer engagement models. FMCG companies have been harnessing these tools to gain deeper consumer insights and enhance operational efficiencies.
Innovative distribution model: Beyond traditional channels, there’s a rise in direct-to-consumer models, subscription services and exclusive brand outlets.
Focus on research and development: As competition intensifies, companies are investing more in R&D to create differentiated products that cater to specific needs.
Localised manufacturing: To manufacture to regional preferences and reduce logistics costs, many FMCG players are either establishing localised units or partnering with third party units across different parts of the country to ramp-up margins.
Heightened competition: Earlier, the market was dominated by a few big players. Now, numerous start-ups and smaller companies are providing stiff competition with their unique offerings.
IE: Milestones that transformed the sector.
CKR: E-commerce surge: E-commerce, quick-commerce and hyper commerce platforms have made a significant dent in the FMCG space. These platforms have democratised access to a vast array of products across the nation, even penetrating to tier 2 and tier 3 cities.
Distribution competitiveness: In the past, only large companies with a robust distribution infrastructure could be competitive in this industry. However, with the emergence of third-party logistics and the growth of the D2C channel, brands can now directly connect with consumers and customise products and offerings to great effect.
Rural digital penetration: The advent of affordable smartphones and cheap internet plans has brought digital access to rural India. FMCG brands are leveraging this digital penetration, expanding their outreach and tailoring digital strategies to engage this vast consumer segment.
Shift to natural and organic: The industry has showcased a massive consumer shift towards products perceived as natural or ayurvedic. Many legacy brands introduced ‘natural’ variants to cater this growing demand.
IE: What will be a game changer in the years ahead?
CKR: Health, wellness and nutrition: With increased awareness of health and wellbeing, there will be an amplified demand for healthier, natural, and nutrient-dense products. The FMCG sector will witness a surge in functional foods, fortified products and offerings with clear health benefits.
Advanced Technologies: The integration of advanced technologies, such as big data & analytics and AI, can provide real-time insights across various applications, including sales, marketing, finance and supply chain. Rise of automation and blockchain technology can further optimise the supply chain, ensuring that products reach consumers more quickly and efficiently.
Additionally, technologies like AR and VR hold the potential to revolutionise product displays and enhance online shopping experiences
Rise of niche brands: In the dynamic landscape of India’s consumer market, the next few years are set to be dominated by the exponential rise of niche brands. The increasing digital penetration, coupled with a burgeoning middle class, is pushing consumers to seek products that align more closely with their individual identities, values and needs. Furthermore, regional preferences and indigenous ingredients are becoming powerful differentiators. This trend is likely to be bolstered by local entrepreneurs and smaller companies who understand these nuances, leveraging them to offer products that big global brands might overlook.
Sustainability and eco-friendly initiatives: As consumers worldwide are becoming more environmentally conscious, there will be a pronounced shift towards sustainable and eco-friendly products in the FMCG sector. Brands that adopt sustainable practices, from sourcing to packaging, will likely be favoured.
IE: How does India compare with global peers and how are we equipped to ride the growth wave?
CKR: India’s FMCG sector stands distinct when compared with its global counterparts, primarily due to the sheer diversity and vastness of its consumer base. While mature markets like Europe and North America have settled consumption patterns, India remains a dynamic playground with evolving tastes, preferences and buying behaviors. Many multinational corporations find India’s FMCG market both challenging and rewarding, as the country blends traditional preferences with modern aspirations.
Rapid urbanisation contrasts sharply with the largely urban settings of developed nations. This urban-rural mix creates unique distribution challenges and opportunities. Moreover, the price sensitivity of Indian consumers often necessitates unique marketing strategies and product formulations.
The sachet revolution, for instance, is a testament to India’s ability to innovate for affordability, allowing premium products to be accessed by a broader segment of the population.
India’s FMCG sector is ideally positioned to capitalise on the forthcoming growth wave. With a significant chunk of the population being young, there’s a natural inclination towards newer, innovative products while brand loyalties are still being established. This momentum is further bolstered by rising disposable incomes and a burgeoning middle class who are keen, not only on amplifying their consumption but also on indulging in superior quality and experiences.
Technologically, India is making strides in integrating digital systems into its business fabric. The rapid proliferation of smartphones and the internet, even in semi-urban and rural areas, facilitates a direct line of communication between brands and consumers. This digital advantage is instrumental for data-driven insights, hyper-personalised marketing campaigns and efficient e-commerce operations.
Additionally, India has a robust manufacturing backbone. Policies such as “Make in India” and a focus on self-reliance have spurred infrastructural developments and incentives for local manufacturing. When coupled with India’s rich biodiversity, which is a treasure trove for natural and organic product formulations, the country becomes a potent hub for FMCG production catering to both domestic and international markets.
While India’s FMCG landscape has its set of challenges, the intrinsic strengths of its demographic profile, technological advancements, and manufacturing prowess make it a hotbed for growth and innovation in the coming years.
IE: Your current operations and plans ahead.
CKR: CavinKare, has always been at the forefront of innovation in the Indian FMCG sector. From our humble beginnings in the hair care market, we’ve now expanded our operations across various categories, making quality personal care and food products accessible to millions.
We currently have a diversified portfolio encompassing personal care, dairy, snacks, beverages and more. Our products are not limited to the Indian market; We’ve also made our mark internationally. With our continuous efforts in R&D, our products are tailor-made to cater to both Indian sensibilities and global standards, ensuring a wide appeal.
Our vision for the future is crystal clear: to further distribution reach and to continuously innovate, ensuring profitable growth through disruptive product ideas and remain a significant player in the FMCG sector.
Strengthening distribution: Our roots lie in our deep distribution networks and we plan to fortify this further through disruptive distribution strategies backed with the right investments in infrastructure, ensuring increased availability.
Product expansion: We’ll be delving deeper into segments that align with emerging consumer needs. This includes fortifying our presence in the shampoo, hair colour and milkshakes category, introducing convenient and innovative products that align with the widening consumer preferences.
Digital transformation: Recognising the digital wave, we’re working towards enhancing our online presence, optimising our e-commerce channels and leveraging data analytics for sharper market insights and consumer engagement. n
