Over 60% of FMCG companies now see e-commerce as their key sales platform, with nearly 75% of mid-sized firms favoring it as their primary sales channel. Emerging manufacturers are growing 1.5 times faster in ecommerce than the average in categories like noodles, refined oil, biscuits, coffee, and packaged atta, according to a recent study by NielsenIQ.
Consumers are opting e-commerce, driving traction – NIQ
“Indian businesses are recognizing the growing importance of digital as a significant operational channel and are now crafting targeted strategies to win in this space. Consumers are embracing the unique benefits of ecommerce, driving increased traction for brands from emerging manufacturers across key FMCG categories,” said Pallavi Suresh, executive director – emerging brands at NIQ India. She added that these varied channel preferences across business sizes signal a broader retail shift in India and underscore the critical role of omnichannel strategies.
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Further, the report noted that convenience stores have seen high penetration in India at 48%, compared to the global average of 18%. Large companies are leveraging this channel the most (58%), followed by medium-sized companies (54%). The report stated that while traditional channels remain important for large enterprises, online and convenience stores now dominate the landscape for small and medium businesses.
Ready-to-eat products tops with 52% surge
According to NIQ’s market measurement, the fastest-growing categories in 2024 till September are ready-to-eat products with a 52% increase, salty snacks and refined edible oils both growing by 41%, biscuits witnessing a 40% rise, and packaged atta growing by 39%.
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Additionally, the report highlighted the impact of inflation on businesses, with 75% of large businesses, 67% of medium-sized ones, and 66% of small businesses facing pricing pressures. To combat inflation, businesses are adopting various strategies, including diversifying distribution channels, focusing on cost management, replacing materials with cost-effective alternatives, and increasing investment in distribution.
