The pandemic has brought long-term changes to how companies do business, one of which is related to digital transformation initiatives. Especially for the FMCG industry, this digital transformation initiative is significant to ensure business continuity.
To find out more information about the challenges of the FMCG industry in the digital era and various solutions, let’s look at the following article
What is the FMCG Industry?
FMCG (Fast Moving Consumer Goods) refers to products in high demand, sold quickly, and affordable. FMCG products are considered “fast-moving” because consumers use them regularly. FMCG products include packaged food and beverages, toiletries, stationery, over-the-counter drugs, cleaning products, plastic goods, personal care products, and relatively affordable consumer electronics such as cell phones and headphones.
Some FMCG products are also highly perishable, such as meat, dairy products, baked goods, fruits, and vegetables. The level of sales of FMCG products is usually influenced by discounts offered by stores and factors of holidays and other seasonal periods.
FMCG Industry Challenges
The FMCG industry is a type of business with enormous scope, but this business has several challenges. The main challenge for the FMCG industry comes from products that, on average, have small profit margins and short product life. For businesses in the FMCG industry to continue to gain maximum profit, companies must be able to sell as many products as possible as quickly and efficiently as possible.
These challenges also make FMCG companies need marketing personnel such as intelligent Sales Executives to attract many customers. FMCG companies must also find solutions related to environmental impacts, considering that most FMCG products are packaging. Solutions are also required to extend the shelf life of perishable products and produce goods at lower costs.
FMCG Business Opportunities in the Digital Age
In Indonesia, the FMCG industry is a leading industry that significantly contributes to national economic development. FMCG has become one of the industries in the country that has been less affected during the COVID-19 pandemic. Overall, Indonesia recorded a positive change in FMCG market value of 8.8% year-on-year in the third quarter of 2020 and continues to grow promisingly until 2022.
Especially in the digital era like now, FMCG business opportunities are getting bigger. The ample FMCG business opportunity in the digital age is supported by easy access to market demand, for example, by the many online stores that support instant payments and fast delivery systems. When viewed from current prospects and trends, the FMCG business has the best opportunity to continue to grow.
Tips for Facing the Challenges of the FMCG Industry
To face the various challenges of the FMCG industry, there are several tips that you can use, namely:
1. Comprehensive report
FMCG companies generally use internal market research data, sales history, and data from vendors to compile company reports. These various types of data are essential to FMCG, although broader information is also needed given the variety of customers.
The information obtained by the company may be limited and more difficult to get if the data is collected manually. Therefore, companies need to combine existing data to get richer insights.
The goal is none other than so that the data can be used to support the right sales and marketing strategies. That is why using technologies such as big data and geospatial plays a crucial role in helping and simplifying data analysis.
2. Evaluate company performance
It is essential to evaluate the company’s performance so that FMCG companies can design business strategies for the future. Determination of the system based on sales evaluation and predictions can increase overall profit opportunities for FMCG companies.
Companies can use applications or software to determine how to market products based on customer purchasing patterns, help identify products to sell based on sales history, and optimize inventory and warehouse management.
3. Use management apps
The use of management applications that can help collect data and use it for decision-making is also essential for FMCG companies in the current era of digitalization. Business intelligence applications that utilize business technology systems enable companies to adapt to rapid changes because competitors are also starting to take advantage of similar technologies.
As a non-durable consumer goods industry, FMCG must keep up with existing developments. Not only consumers but competitors in the FMCG industry can also be challenging. Therefore, every FMCG company must be ready to face any changes by planning a transition strategy from traditional to digital and innovative models.
This is information about the challenges of the FMCG industry in the digital era and various solutions. For those of you who run a business in the FMCG industry and intend to carry out digital transformation, you can use Skha’s services which provide business management consulting services, including for the FMCG industry.
Through the Business Design service, a professional and experienced team from Skha Consulting will assist in implementing the transformation plan through a series of structured and comprehensive project management.
Considering all the existing dynamics, the Business Design team from Skha Consulting will help realize your FMCG company’s target in the digital era. You can get more information and visit Skha’s business implementation services page.