60% Of FMCG Companies Identify E-Commerce As Key Sales Platform: Report

The report reveals that convenience stores have achieved significant penetration in India, reaching 48 per cent, far exceeding the global average of 18 per cent

According to NIQ’s market measurement data, the fastest-growing categories in 2024 (up to September) include ready-to-eat products, which saw a 52 per cent increase

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Over 60 per cent of FMCG companies have identified e-commerce as their most important sales platform, with nearly three-quarters of mid-sized companies prioritising it as their top sales channel, according to a recent study by NielsenIQ. The study also highlights that emerging manufacturers are experiencing 1.5 times the growth in e-commerce compared to category averages in products such as noodles, refined oil, biscuits, coffee, and packaged atta.

"Indian businesses are recognising the growing importance of digital as a significant operational channel and are now crafting targeted strategies to win in this space. Consumers are embracing the unique benefits of e-commerce, driving increased traction for brands from emerging manufacturers across key FMCG categories," said Pallavi Suresh, executive director of emerging brands at NIQ India.

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

The report reveals that convenience stores have achieved significant penetration in India, reaching 48 per cent, far exceeding the global average of 18 per cent. Large companies are the biggest users of this channel (58 per cent), followed by medium-sized businesses (54 per cent). While traditional channels remain vital for large enterprises, online platforms and convenience stores are becoming the dominant sales channels for small and medium-sized businesses.

According to NIQ’s market measurement data, the fastest-growing categories in 2024 (up to September) include ready-to-eat products, which saw a 52 per cent increase, followed by salty snacks and refined edible oils, both growing by 41 per cent, biscuits with a 40 per cent rise, and packaged atta, which grew by 39 per cent.

The report also highlights the critical role of pricing strategies, with 75 per cent of large businesses, 67 per cent of medium-sized businesses, and 66 per cent of small businesses citing inflation as a critical challenge. To address this, large companies diversify their distribution channels, while smaller firms focus on cost management to protect their market positions.

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