Fast moving consumer goods (FMCG) industry has always been dependent on insights into customer behavior and preferences.The industry has viewed information technology as a necessary business enabler and has been trying to embrace digitisation to create engaging experiences for customers.
According to a Gartner report, FMCG industry is currently the fourth largest sector in the Indian economy, which has grown at an annual rate of about 11 percent over the last decade.
According to an ASSOCHAM report, the market for the India's FMCG sector will grow from USD 49 billion to USD 104 billion by 2020. The optimism is based on steady economic growth, increasing the share of organised retail, and improving awareness about digitisation and automation.
Moving forward FMCG companies aim to leverage digital technologies and analytics to get granular insights into customer preferences and deliver superior products and customer experience to grow their business.
To further elaborate on the trends, business challenges, and opportunities that will shape the FMCG industry this year, IDG media spoke to three CIOs of top companies in the industry: Pratap Varshney, Director GM-IT, Patanjali Ayurved Limited; Girish Rao, Head-IT and Business Analytics, Marico Limited and Sanjay Kotha, CIO & SVP, Hindustan Coca-Cola Beverages. The three IT leaders also describe how they are using IT to surmount challenges and outline their expectations from government initiatives to give a boost to the industry.
What are the technology trends that would prove to be disruptive for the FMCG industry in 2017-18?
Pratap Varshney: Digitization is disrupting the FMCG sector in our country. The salesfront and the distribution channels get heavily impacted with the rise of automation. Predictive analytics and big data are being used nowadays to understand the customers' requirements, which enables us to micro-segment them based on purchasing behavior. E-commerce, on the other hand, acts as a key driver for the industry's growth. FMCG companies need to have proper speed, agility and ability to think and act ahead of the curve.
Girish Rao: The FMCG industry doesn't get affected much by the economic cycle of a country, unless and until there is some big revolution like GST or demonetisation. Having said that, in terms of long-term planning, even FMCG companies need to be adaptive to newer technologies, proactive to deal with difficult situations, and flexible in terms of their deploying strategies to stay competitive in the market. A major catalyst accelerating the growth of the sector is digitisation.
Sanjay Kotha: Digitisation is a mega trend that has impacted the FMCG industry as a whole. Big data, the speed of social media, and retailer polarisation also help in the exponential growth of the industry. FMCG players are taking on enhanced strategies for digital marketing and are using advanced tools to analyse customer behavior patterns better, but all this has been underpinned by the strategic use of technology.
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