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(Source: http://active-overseas.com/product/fmcg-products/)

Fast-moving consumer goods (FMCG) are the products that are sold quickly and at a relatively lower cost. Examples of FMCG products are soft drinks, cigarettes, ketchup, ready-to-eat foods, and other consumables like beauty products.

FMCG is a classic case of low margin and high volume business, and it is one of the fastest developing sectors in the Indian economy. It is the fourth largest sector in the Indian economy.

The market size of FMCG in India has grown from US $30 billion in 2011 to US $74 billion in 2018. Food products lead the segment with 43% of the overall market, whereas personal care (22%) and fabric care (12%) come next in terms of market share.

According to Google India Search Insights 2018, around US $45 billion of FMCG sales in India will be impacted by the influence of the internet by 2020. Therefore, one can safely agree that when a campaign is well-planned and well-executed, digital marketing has quite a major effect on the FMCG industry

Changing lifestyles, growing awareness, and increased incomes for middle-class families have been the key factors for the growth of this industry.

Reasons for the growth of the FMCG sector

The growth of fast-moving consumer goods (FMCG) can mainly be attributed to the increase in the purchasing power of the Indian population and its youth population. There has been an increase in disposable incomes in urban cities and rural India.

Rural areas are expected to be the major driver for the FMCG industry, as rural areas saw a growth of 16% against 12% rise in urban areas. Companies are working towards creating specific products specially targeted for the rural market.

Rural demand is expected to rise with rising incomes and greater awareness of brands. In the urban side, too, there will be an increase in consumer purchasing power. Therefore, the FMCG companies are eyeing massive growth in their revenues.

Growth of e-commerce, too, is greatly contributing to industry growth. Today, all major e-commerce websites sell FMCG products and help in building brand awareness. E-commerce websites give huge discounts on products that act as an incentive to buy from. Categories such as make-up, skincare, baby nursing, deodorants and grooming products have grown by more than five times in the past year alone.

How digital marketing will reform the FMCG sector

Digital media is revolutionizing the landscape for marketers everywhere, especially in the FMCG sector. Traditionally, marketing campaigns for every FMCG product would depend upon determining the right marketing mix of the 4 P’s (Product, Price, Place and Promotion) that would majorly influence the target audience’s purchase decisions.

Today, however, consumers are making buying-decisions differently, and with this, strategies aimed at impacting this process needs to be created.

Consumers now are exposed to their phone, tablet, and laptop screens, more than they are to traditional media like television, newspapers, and billboards.

There are also a growing number of consumers who prefer online shopping for FMCG products, rather than visit a physical store. In today’s digital era, a strong digital marketing strategy is indispensable for brands in the FMCG sector.

Adapting the 4 P’s for Digital Marketing

Digital marketing for FMCG companies does not mean retiring the tried and tested 4 P’s which formed the holy grail of marketing for years. Rather, it involves tweaking the marketing mix for FMCG products to bring them into the current era.

Digital marketing trends in FMCG allow marketers to not just capture the consumer at the final buying stage, but also to establish a relationship with them from the star; something that was not entirely possible before. This requires marketers to formulate a holistic FMCG digital strategy to not just influence their customers, but also to personally engage with them.

How Digital Marketing Can Benefit FMCG Brands

Incorporating a strong digital marketing strategy in the overall marketing mix offers several clear advantages to brands.

1. Distinguish your brand

The FMCG sector is marked by a large variety of similar products, offering consumers a wide range to choose from. One of the biggest advantages of having an effective digital marketing strategy in place is that it helps brands create a unique brand identity, thereby differentiating them from the competition. This also helps consumers form a strong opinion of the brand, which will ultimately influence their purchase decision.

2. An innovative way to display your brand

In traditional marketing for FMCG, the product display was considered one of the crucial factors which influenced purchase decisions. Indian consumers emphasize more on visuals. Therefore, the more attractive your packaging, the higher the chance of it being noticed by them.

Similarly, digital marketing for FMCG companies can be approached as a virtual shelf display. It is even more effective than a physical display because it helps you reach your specific target audience, as well as making your overall marketing strategy more cost-effective. This enables top-of-the-mind awareness, which, in turn, can influence purchase decisions.

Through tools like AdWords Smart Display, you can showcase your products while consumers browse through similar categories. For example, if you are a breakfast cereal brand, you can display your ads next to health and fitness blogs your consumers are browsing through.

3. Gain consumer insights and increase ROI

Digital marketing helps you track every facet of your marketing efforts. FMCG brands spend large sums on hoardings, TV commercials, print ads, radio ads, and so on. However, the results of these campaigns are very difficult to measure accurately. While speculative figures can be produced, it is impossible to arrive at a definite conclusion.

With the help of analytic tools, brands can recover information about number of reach, impressions, clicks, conversions and more. It also tells you exactly which advertisement prompted the consumer to make the purchase.

Advanced analytics can even let you gain deep consumer insights. This can help you create engaging campaigns and content. With the ease of tracking digital marketing offers, FMCG brands can improve their strategies and make it more cost-effective.

4. Growing usage of phones

Offline purchases might still form the bulk of FMCG sales, but we all know the future belongs to mobile phones. Mobile phones, and high-speed and affordable internet, have penetrated almost every section of the Indian audience.

A significant portion of Indian consumers are shopping for FMCG products online through various apps, and this number is only going to grow. Digital marketing trends in FMCG need to keep up with the increasing volume of customers who prefer to shop online.

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(Source: https://dazeinfo.com/2015/01/07/retail-ecommerce-sales-in-india-growth-2014-2018-report/)

Conclusion

India's 28M affluent and elite households will be contributing to 40% of overall FMCG consumption by 2020, of which 60-65% will be digitally influenced. Hence, every company in this sector must tap into this opportunity.

As we know, digital marketing focuses more on ‘informing’ the consumer about a product, rather than ‘selling’ it. This helps a great deal for FMCG consumers who dislike being ‘forced’ into buying a product.

Some Indian FMCG brands still struggle with effective digital marketing despite having large budgets, international reach/penetration/usage, and great customer insight.

We, at 1702 Digital, can help you achieve wonders for your business through digital marketing. Our client, Adani Wilmar, is a living testimony to the extent and effectiveness of our digital marketing strategies and its flawless execution.