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Indian FMCG industry to leverage digital technologies for growth

Sejuti Das | June 6, 2017
FMCG sector in India is looking to grow by leveraging digital technologies and emerging channels.

How is your company stepping up its digital game for 2017-18? 
Varshney: We are working aggressively on plugging the gaps in the supply chain and distribution channels by implementing a proper system to manage the inventory better. Apart from digitising more than 1,000 medical centers, we are trying to consolidate our online presence with websites and a mobile app. We also have an innovative R&D facility, which is equipped with advanced technologies. We believe that digitisation is a very important organisational tool to ensure repetitive purchases and brand extensions.

Rao: Social and IoT are going to play a huge role this year, for our organisation, to get deep insights into consumer behavior. Also, as a lot of data is being generated on a daily basis, analytics could be used to understand the patterns and making proactive decisions. So long we have been using our capabilities to gather information, but now we are aiming to leverage that data for our business growth. So, to remain in business, FMCG companies have to think themselves as a digital platform.

Kotha: Automation is our main focus this year, to improve the customer experience. We are also aiming to enhance our sales force automation, with a seamless mobile application, which will help our field employees to have a better understanding of our customers, and connect with them in a better way. We are expecting the government initiatives to have a significant positive impact on the sector. We are also improving distribution networks to expand our reach in rural India.

 

How will GST impact the industry?
Varshney: Since we procure raw materials locally and the thrust on exports is minimal, factors like currency exchange rates have no significant impact for us. With GST implementation we will be able to optimise logistics and distribution costs in a better way. We are also aiming to tweak our warehousing systems and modernise our IT infrastructure. GST transition impacts every aspect of the business operations and therefore it requires a whole-of-business approach to ensure a smooth transition.

Rao: We are pretty tuned in with the system, and ready with our strategies to deal with GST and other government initiatives. But the combined effect of demonetisation followed by GST will create some disruption because small players and traders are not ready to embrace it yet. These players would need to go through a transformation because businesses would need IT support to proactively handle the shift. Therefore, the FMCG companies should cut advertisement spends at least in the short-term.

Kotha: For FMCG industry GST acts as a major differentiator. We have partnered with PwC to carry out a strong research of the post-GST scenario, to stay ahead of the game. We are also working towards switching to larger warehouses instead of continuing with several smaller ones. This, in turn, will facilitate better management of logistics and faster movement of goods. We are also working on having an efficient transportation system with better transit times.

 

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