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Start-ups are winning in FMCG with their Agile Supply Chains.
A few years back, new entrants found it very difficult to penetrate the FMCG marketspace. General Trade dominated the selling channel and new entrants found it tough to get a decent distribution.
The market context has changed now, with online channels consistently gaining share. New entrants typically start with eCommerce and Quick Commerce channels, which also happen to be the fastest growing ones. It mitigates their earlier disadvantage in distribution.
In these two channels, start-ups actually have an edge over their traditional competitors, who find it quite hard to expand from GT, MT to eCom and QC. They are often bogged down by their conventional supply chain processes and practices, which were designed for the older times.
Start-ups embrace agility much faster, which gives them an edge in these emerging channels where demand is less predictable and can be shaped.
We should expect more start-ups to ride the eCom and QC wave and make their mark in the FMCG market space.