Distribution models for FMCG Companies in India
Distribution models for FMCG Companies in India. Procter and Gamble (P&G) operates in India through three entities, one of which is the P&G Distribution Company, fully owned and managed by the other two entities, P&G Health & Hygiene and P&G Home Products. P&G’s distribution system was initially similar to other FMCG companies. However, a change of business strategy from being a mass marketer to a niche and premium marketer, led to the evolution of a new distribution model known as the Golden Eye (GE) model emerged. This model is supposed to be extremely revolutionary in Indian distribution history. Food retailing in India: Trends and opportunities Retailing - no marks for guessing this is the most active and attractive sector of the last decade in India. ... The emergence of retailing in India has more to do with the increasing purchasing power of buyers, especially post- liberalization, increase in product variety, and the increasing economies of scale, with the aid of modern supply and distribution management solutions. ... These `revolutionaries include many conventional stores upgrading themselves to modern retailing, companies in competitive environments entering the market directly to ensure exclusive visibility for their products and professional chain stores coming up to meet the need of the manufacturers who do not fall into either of the above categories. Attractiveness, accessibility and affordability seem to be the key offerings of the retailing chain The emerging sectors Retailing, one of the largest sectors in the global economy, is going through a transition phase not only in India but the world over. ... Based on the distribution of the more than 15 lakh households in Chennai across income segments and the average spend, a conservative estimate of the grocery retailing potential at Chennai will be around Rs. ... However, in India there are no uniform trends with respect to consumer buying behaviour. ... Emerging trends The single most important evolution that took place along with the retailing revolution was the rise and fall of the dotcom companies. ... And the poor financial performance of most of the companies offering virtual shopping has resulted in store-based retailing regaining the upper hand. ... Wal-Mart pioneered the concept of building a competitive advantage through distribution and information systems in the retailing industry. ... It would be important to note, however, that the retailing industry in India is still a `protected industry. ... • Even though India has well over 5 million retail outlets of all sizes and styles (or non-styles), the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. ... • Retailing in India is thoroughly unorganized. ... This means that India per capita retailing space is about 2 square feet (compared to 16 square feet in the United States). Indias per capita retailing space is thus the lowest in the world (source: KSA Technopak (I) Pvt Ltd, the India operation of the US-based Kurt Salmon Associates). ... 800,000 crore by 2005 (source: survey by AT Kearney) • Given the size, and the geographical, cultural and socio-economic diversity of India, there is no role model for Indian suppliers and retailers to adapt or expand in the Indian context. • The first challenge facing the organized retail industry in India is: competition from the unorganized sector. Traditional retailing has established in India for some centuries. ... Lifestyles in India are changing and the concept of "value for money" is picking up. ... • Local companies and local-foreign joint ventures are expected to more advantageously positioned than the purely foreign ones in the fledgling organized Indias retailing industry. • These drawbacks present opportunity to international and/or professionally managed Indian corporations to pioneer a modern retailing industry in India and benefit from it. ... More such malls have been planned in the other big cities of India.