Distribution Opportunities in India

Indian companies, specially FMCG companies today are staring at a major disruption in their distribution model. Other than some basic technology interventions to track primary (sales from the FMCG company to their Distributors), and in some cases, secondary sales (sales from the Distributor to the Retailers), very little changed over the decades. Products go from brands’ manufacturing facilities to their Distribution Center (DC), on to C&F agents in each state, on to the hundreds of Distributors (DB) in that state, and finally on to the retailers, where consumers/shoppers purchase them. The primary reason for the lack of change is the more or less static retail environment we have seen –close to 90% of retail even today is dominated by mom & pop outlets, or what we call GENERAL TRADE (GT) in India, this was as high as 98% till a decade or so ago. Looking at the evolution of FMCG Distribution in India since 1950, we can categorize it in the following categories: Distri

In every country or market - whether developed, emerging or underdeveloped - consumer products eventually go through some form of distribution process. The distribution chain involves movement of goods from factory gate or shipping yard to consumers' doorstep. Success in international market largely depends on entering the distribution chain with suitable overseas partner who can successfully introduce your products. There are several models and resources - one can select depending on own organizational resource. 1. Wholesale Model Wholesaling involves selling in bulk to an overseas wholesale partner who has access to downstream channel for re-selling the goods. The wholesaler buys in bulk from Indian seller and takes complete responsibility of selling the goods in his/her own country. Post sell, the Indian seller is free of anxiety, but loses track of how his/her products doing, such as - at what price the consumer is buying, margin of intermediates, consumer feedback etc.