FMCG cos need to adapt to a young, social media-savvy consumer: PepsiCo India chief Shivakumar
A combination of policy, technology and new consumers is set to transform the $65-billion FMCG industry that needs to rethink its business models, PepsiCo India chairman D Shivakumar has said.
While the goods and services tax (GST) will enable scale manufacturing and distribution and better consumer prices, most innovation in FMCG will have to be focused on the younger, time-starved consumer, Shivakumar said at FICCIMassmerize event on Thursday.
The government proposal to keep retail outlets open 24 hours, social media and growth of modern trade and ecommerce mean there’s a power shift happening, he said.
“At 250 million Facebook subscribers, Facebook will be a bigger media vehicle than all the television channels put together,” he said, pointing out the new consumer is mobile and social media-led. “This medium is two-way where volume of consumer commentary is more than the volume of industry commentary. This is not something a brand marketer or a retail establishment is used to. We will need to adapt to a feature phone in rural markets with challenged bandwidth.”
The FICCI-PwC report on shaping consumer trends highlighted that changes to Indian consumer behaviour are being driven by increasing incomes, a younger profile of consumers, and growing access to the internet.
Purchase patterns are changing, driven by a shift to wellness-driven choices and the rise of cash-rich but time-starved consumers seeking a new dimension in `convenience’. This is creating a large number of opportunities for consumer-driven companies, it said.
Shivakumar said, “Being time starved has huge implications for products, innovation, durables, shopping aisle layout and the development of a do-it-yourself culture. These families will demand food products that are ready to eat, ready to cook in three to five minutes.”
PepsiCo, maker of Pepsi and Mountain Dew beverages and Kurkure and Lay’s salty snacks, is working on category innovation aimed at such consumers.
The FMCG industry has about 1,563 firms, of which only 378 have 1,563 firms, of which only 378 have a turnover of over `10 crore, Shivakumar said. “The industry will need to be on its toes every day, scanning consumer feedback and acting on it,” he said.
Source : The Economic Times (Delhi)