Consumer-product companies losing market share to new rivals, trend to continue: Study

MUMBAI: Most consumer-product companies in India have seen losing market share to newer rivals and expect the trend to continue, a survey has found, indicating the need for established players to transform their business models.

As much as 86% of the companies participated in the survey that Boston Consulting Group conducted in collaboration with the Confederation of Indian Industry have reported this trend. The survey polled senior leaders of leading FMCG and retail companies to gauge the extent of challenges posed by the current business environment and whether their organisations were ready to meet these challenges.


"We have found that successful transformation requires that companies should think about generating cash quickly from some actions by driving operating performance, and at the same time fundamentally change the core consumer proposition and delivery model," said Amitabh Mall, partner and director at BCG.

Around 60% of companies agreed that the world around them was going to change and a large number believed that they were not adequately prepared for that transformation.

According to the report titled ‘Changing your Orbit – The Handbook for Transformation in FMCG & Retail Businesses’, at a time when adapting to the new environment is crucial, companies are hampered by internal complexity that makes changes difficult.

Yet, the long-term consumption opportunity in India is large and attractive, going from $900 billion in 2010 to $3.6 trillion by 2020.

"There is a need to understand the consumer better and finally the last-mile connectivity – the distribution infrastructure and capabilities are critical to achieving success for FMCG business," said Kurush Grant, executive director, FMCG businesses, at ITC Ltd and chairman of the CII national committee.