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FMCG sector to play vital role in making India $5 trillion economy: Minister

With digital connectivity, the reach of e-commerce has reached the small village panchayats of India. As a result, the e-commerce sector is expected to grow more than expected, said the minister
FMCG sector to play vital role in making India $5 trillion economy: Minister
FMCG sector to play vital role in making India $5 trillion economy: Minister (Representational Image: Shutterstock)

Indian economy is well on its path to recovery and the FMCG sector is a key player in India’s US$5 trillion dream, Minister of State, Ministry for Consumer Affairs, Food & Public Distribution, Ashwini Kumar Choubey, Saturday said while speaking at FICCI MASSMERIZE 2021- 11th Edition of FICCI’s Annual Conference on Retail, FMCG and E-commerce.

With the growing impact of digitisation and e-commerce, buyers are more inclined towards technology and the world is conceptualising the belief of Vasudev Kutumbaka, the minister.
 
“Digital connectivity today is not limited to cities but is also available in rural areas of India. With this, the reach of e-commerce has reached the small village panchayats of India. As a result, the e-commerce sector is expected to grow more than expected,” said Ashwini Kumar Choubey.
 
Speaking on the government initiatives, Choubey said the central government was focused not only on the recovery of the economy but also took initiatives to make India a manufacturing hub.

Emphasising the reforms led by the government, he said, “We have recently implemented National Single Window System for investors and business. This will go a long way in giving shape to schemes like Make in India and Start-up India and entrepreneurs will benefit greatly.”
 
“It is also the endeavour of the Government of India that the consumer should be a conscious consumer, he should get all the information about his choice, get it at the right price, at a competitive price and his problems should be resolved within a time limit.,”  added Choubey.
 
Speaking on the occasion, Amitabh Kant, Chief Executive Officer, NITI Aayog said, in an economy where close to 55 per cent of the GDP comes from consumption expenditure, the FMCG sector emerges as one of the largest sectors of the economy.
 
“Growing awareness, easier access and changing lifestyle have been the key growth drivers for the sector,” he said. There were many disruptions in the business models of the sector, yet the world showed the capacity for innovation and entrepreneurial spirit, new business models came up and delivery channels were modified,” said Kant.
 
He further mentioned that the pandemic had led to developing alternative delivery channels for customers and as more and more people were preferring online platforms, such delivery models would be the key to the future. Building sustainable business practices across supply chains are now imperative given the perils of climate change. “It is only when the private sector and government join hands we will be able to create a sustainable future,” added Kant.
 
He also said, “Digital supply chains are the future, and we must work towards making this future reality in India. Many Indian FMCG companies have the potential to become global leaders, it is only through resilient and sustainable practices they will be able to scale the heights.”
 
Speaking about the Kirana stores, Kant said, “India’s Kirana store makes a huge segment of our economy, especially in the FMCG sector where the rural economy matters as much the urban economy.” He urged the larger firms to work with such Kirana stores to ensure digital onboarding and handholding.
 
Further Kant emphasised that enabling Kirana stores to connect to the digital economy could have the impact of boosting consumption in both rural and urban India.

Resilience is the new metric for accessing performance and preparedness for the future. From now on government and businesses will be judged on how resilient and sustainable their practices are. 
 
“Redefining delivery channels, sustainability, leveraging innovation and technology, enabling Kirana stores and hybrid working models will be the key to ensuring a resilient FMCG sector right from the manufacturing process to last-mile delivery channel,” said Kant.
 
Madhusudan Gopalan, Chair, FICCI FMCG Committee & CEO and MD, P&G, India Sub-Continent said, “In today’s uncertain environment, fast-evolving customer retail landscape, resilience is the key to convert challenge into an opportunity.”
 
Devendra Chawla, Co-Chair, FICCI Internal and Trade Committee and Managing Director and CEO, Spencer’s Retail and Nature’s Basket said that the pandemic was a game-changer for the industry and though the change was the only constant, the relevance of keeping the customer at the centre of all business decision and innovation would never change.

Read more: Bank of Baroda ties up with PayPoint India to expand into rural markets

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The Changing Face of Rural India