Shanu John
Senior Manager
Over the last five decades, the Indian FMCG market has grown by leaps and bounds. The fast-moving consumer goods (FMCG) segment is the fourth largest sector in India. With 12 mn grocery retail outlets, a million wholesalers and distributors, and a multitiered structure, the Indian grocery retail ecosystem is one of the most complex in the world. India’s large population, and geography, make it difficult for FMCG manufacturers and brands to reach all retail stores efficiently.
A robust distribution network is essential for FMCG manufacturers to ensure that they grow their sales and have a wide geographical market reach. They are dependent on wholesalers, distributors, and sub-distributors to ensure that their products are stocked in as many retail stores as possible. They are also dependent on distributors sharing data with them to ensure that they can achieve business goals and expand their market share.
A lot of these distributors and sub-distributors stock and manage multiple brands and work with more than one manufacturer and are reluctant to use different distribution managment Software for each manufacturer. Additionally, distributors have to deal with myriad challenges to share data with FMCG manufacturers like
Legacy or no technology networks:
Most multi-brand distributors cannot use a single distribution managment Software, use their system, or are not technologically enabled. They still prefer to use their formats and educating and training them to adopt new systems and reporting process is a challenge for the manufacturers.
Accessibility:
Despite great improvements in connectivity, and improvements in the transportation network, FMCG brands, and manufacturers find it challenging to transfer, educate and train new distributors and sub-distributors on new systems. It’s vastly time-consuming and takes considerable resources and workforce commitment to take care of new distributors even in small geographies. Training and upgrading distributors require multiple teams of trainers that need to travel vast distances and bring them to the same format.
Reluctance to change:
many distributors use customized systems as they have to manage multiple brands and are not compatible with the FMCG company and manufacturers’ systems and do not want to go through change management to adopt the company’s distribution managment Software systems.
Indifference to data reporting:
Distributors are indifferent about sharing product, inventory, outlet, and sales information with the company if this involves the deployment of a new system/process. Distributors have not yet started seeing the benefits of sharing clean distribution data and do not know how correct reporting will benefit them. A fraction also fear that the data may be acquired by their competition and harm their business.
Low investment potential:
A lot of distributors and sub-distributors do not have large sales volumes for the company. They lack resources or are unwilling to make a direct investment into upgrading systems for change management to sync with the company’s distribution managment Software systems. Companies also find it difficult to bring these distributors online as the cost incurred do not out weigh the benefits of the existing set of systems.
Unreliable or untrustworthy data:
A lot of distributors and sub-distributors are still managing inventory, sales, and data using manual data, and their records are still maintained with handwritten receipts and vouchers. Manual data makes claims settlement slow and time-consuming. Slow claims settlement impacts business volumes and the working capital of distributors.
While distributors’ challenges slow down business and affect sales volume, their disconnect with the FMCG manufacturers results in a huge disconnect and fails to provide a true picture of business and sales.
Incomplete sales visibility:
Companies don’t get full visibility of sales and thus the market potential. Reconciliation and verification of data take a long time and prevent companies to create strategies to improve business and sales growth.
Inventory etimation and forecasting are difficult:
Manual Data sent by distributors is full of errors and working with it is simply inefficient. Uploading error-prone data to the distribution managment Software or Enterprise resource planning can add more errors and skew the data further. This process is time-consuming and inefficient. Incorrect data has further implications for manufacturers and brands. This data is used for managing inventory, demand forecasting, and production planning. With incomplete data, the companies struggle with their strategies to get their product planning, supply chain planning, and inventory management of the raw material. The worst part is, that the error caused because of these issues takes a lot of time to correct.
True demand estimation remains difficult:
Without accurate and real-time data FMCG manufacturers have a tough time calculating the true demand for their products. Without real-time information and data, they can’t understand market trends, consumer behavior, retail, supply chain, or distribution issues. Real-time accurate data from all markets, urban, semi-urban and rural markets is essential to identify trends, challenges and understand true market demand and respond to them quickly. Because of these issues, their strategies for improving brand coverage and geographical penetration lack relevance and are therefore hard to implement.
Scheme Implementation is patchy and has leakages:
Without near real-time data integration and distribution managment Software implementation FMCG manufacturers find it difficult to implement schemes and promotions across the network. Real-time scheme implementation is difficult over a large geographical area without clear and actionable data and insights. Thus the schemes that are run are often not relevant or do not bring the intended results.
To ensure that the companies can incorporate this burning need to bring the long tail of small distributors on the same platforms as others, a new innovative solution is needed which is dynamic, configurable, and can be easily adopted by small distributors without significant investments.
Botree Software has built a customised application that uses existing programs and reporting processes to extract data into Botree’s Botcon platform using proprietary data mappers. Botcon uses standardised email templates from distributors to easily integrate data to deliver, retailer mapping, distributor product mapping, purchase invoices confirmation etc.
Senior Manager
