60% of FMCG companies recognize e-commerce as a key sales platform: report

According to a recent NielsenIQ survey, over 60 percent of FMCG companies rank e-commerce as their most important sales platform, and almost three-quarters of mid-market companies prioritize e-commerce as their best sales channel. The study also highlights that emerging manufacturers are seeing 1.5 times growth in e-commerce compared to mid-market product categories such as pasta, refined oil, biscuits, coffee and packaged atta.

“Indian companies are recognizing the growing importance of digital technology as a significant operational channel and are now developing focused strategies to succeed in this space. Consumers are enjoying the unique benefits of e-commerce, increasing the appeal of emerging brands across key FMCG categories,” said Pallavi Suresh, Executive Director, Emerging Brands, NIQ India.

She explained that the varying channel preferences across companies of different sizes signal a broader shift in retail in India, highlighting the growing importance of omnichannel strategies.

The report shows that convenience stores achieved significant penetration in India, reaching 48%, well above the global average of 18%. The largest users of this channel are large companies (58%), followed by medium-sized companies (54%). While traditional sales channels remain important for large enterprises, online platforms and convenience stores are becoming the dominant sales channels for small and medium-sized enterprises.

According to NIQ market measurement data, the fastest growing categories in 2024 (through September) are ready-to-eat products, which grew by 52%, followed by salty snacks and refined edible oils, which grew by 41%. , biscuits – an increase of 40% and packaged atta – which increased by 39%.

The report also highlights the key role of pricing strategies, with 75 percent of large, 67 percent of medium-sized and 66 percent of small businesses citing inflation as their most important challenge. To combat this, large companies are diversifying their distribution channels, while smaller companies are focusing on cost management to protect their market position.

To counter inflationary pressures while maintaining profitability, 50 percent of companies are replacing materials with more cost-effective alternatives. Additionally, 49 percent plan to increase investments to strengthen supply chains and expand their market reach, and 47 percent are re-evaluating their product lines, eliminating low-performing products. Another 47 percent are increasing their marketing investments.