New Delhi [India], January 5 (ANI): As part of their efforts to navigate through the troubled waters against the backdrop of sluggish consumption demand in the overall economy, businesses in the Fast-Moving Consumer Goods (FMCG) and retail space are preparing strategies for the upcoming quarter of financial year 2025.
In the second quarter, many FMCG and retail companies witnessed the heat of sluggish consumption, which was even visible on their balance sheets. Going further, the anticipation is that the third quarter of the current fiscal year will not bring much respite, and consumers’ purchasing power is likely to remain constrained, Nomura said in a report.
The report further added that inflation in select pockets owing to food prices and some commodities (such as palm oil) may affect the spending power of the consumer.
It highlighted that most companies could pass on commodity costs post-COVID-19 until 2025 due to high demand for their products; however, given slow demand, the tide has turned, and expectations are that margin risks may arise mostly due to higher competition.
Any rise in commodity prices would be difficult to pass on in such a scenario, it added.
FMCG and retail companies are navigating a challenging market environment either by adjusting their pricing strategies or expanding product lines.
Sundeep Bajoria, Vice President of Franchise Operations at Coca-Cola India, said the company’s resilience has been fuelled by its dynamic pricing model and robust distribution network.
The company’s diverse products, dynamic pricing, and strong distribution network remain attuned to consumer preferences, he added.
“With rural India witnessing a demand upturn, our well-connected traditional and modern retail ecosystem, along with AI-powered tools like Coke Buddy, are expanding accessibility and convenience. In urban markets, we’re steering beverage sales by aligning with top Q-com platforms, adapting our supply model in real-time, and reimagining how consumers interact with the brand,” Bajoria said.
While Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd, stated that the company is taking a proactive approach to prepare for future economic shifts by refining its product lines, pricing models, and distribution strategies.
“We’ve expanded our portfolio with innovative products that cater to changing consumer tastes, especially during festive seasons,” he added.
Reflecting on the strategies adopted by companies, Sagar Merchant, founder of Kaatil Hot Condiments, stated that companies in India are focusing on price rationalisation by stabilising or rolling back earlier price hikes while offering competitive pricing to retain consumer loyalty.
“There has been a large-scale launch of smaller, affordable packs and combo/bundle offers to attract all segments of buyers. Promotional discounts, festive deals, and loyalty programs are used to boost sales, with localised pricing strategies, with a deeper focus now with data and insights available to them,” he stated.
“As we look to 2025, the industry is set to transform, driven by technology, sustainability, and changing consumer preferences,” stated Naresh Sharma, CEO at IRHPL Group of companies.
Vishal Gupta, Managing Director, Borges India, stated, “The rise of mindful consumption has reshaped consumer behaviour. As brands, our focus must remain on offering quality, transparency, and value to meet these evolving expectations.”
Haresh Karamchandani, MD and Group CEO of HyFun Foods, supported the same sentiments and added, “By focusing on innovative products, improving operational efficiencies, including reducing agricultural waste, optimising the supply chain, and leveraging economies of scale while maintaining the highest quality.”
The companies in the retail space are also strategising to compete with the other players in such conditions.
Jitendra Agrawal, CEO of Surya Roshni Lighting and Consumer Durables Business, asserted, “We will focus on building stronger brand awareness, especially among youth, semi-urban, and rural markets, through innovative communication strategies at the point of sale. We will also use AI for targeted outreach and faster execution to meet the evolving demands of the market.”
While Priya Rustogi, Leader India and Subcon for LWT IMEA, asserted, “We offer a different value and it is about longevity, sustainability, and delivering products that align with global standards. We are also investing in accessibility, ensuring that more customers across India can experience what globally the world is experiencing.”
Reflecting on the strategies, Abhishek Gupta, Director of Finance and Operation, Summercool Home Appliances Ltd,” The retailers are now concentrating on offering products of world-class quality and diverse range–be it electronics, home appliances, or smart devices — to attract consumers across urban and rural demographics.” (ANI)
