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General Trade vs Modern Trade, Modern Trade vs General Trade

General Trade vs. Modern Trade in FMCG: Decoding Distribution Channels

The Indian FMCG (Fast-Moving Consumer Goods) industry is the world’s fourth largest, contributing a whopping US$167 billion to the country’s GDP in 2023. Further, an average Indian household uses over 16 different FMCG products every single day. But how exactly do these products reach your home?

The answer lies in a complex network called distribution channels. These channels act as the bridge between FMCG manufacturers and the final consumers, ensuring a smooth flow of products from factories to store shelves (or even directly to your doorstep!). A big chunk of the market is operated by general trade whereas new retailers and big businesses are more inclined towards modern trade. Could add a pictorial representation of how the distribution channels work. Could add a pictorial representation of how the distribution channels work.

Understanding these channels is imperative for any FMCG company aiming to optimise their business operations. So, let’s dive deeper into the world of general trade vs modern trade.

Understanding Different Distribution Channels in the Indian FMCG Landscape

In the FMCG sector, a network of channels plays a crucial role in bringing everyday essentials like cookies to consumers across the country.

This network is called a distribution channel, and it’s like a highway connecting manufacturers to the retail store (final point of purchase). 

Let’s understand the key players on this highway:

• Manufacturers: These are the companies manufacturing FMCG products, like HUL, Nestle, or ITC.
• Distributors: They act as intermediaries between manufacturer and wholesaler. They buy products in bulk from manufacturers and then distribute them to wholesalers and retailers.
• Wholesalers: They buy large quantities of products from distributors and then sell them in smaller quantities to retailers, particularly smaller stores that individual distributors might not be able to service directly.
• Retailers: Finally, we reach the final point of purchase – the retail shops. Retailers can be of various types, which we’ll explore in detail later.

The specific structure of the distribution channel can vary depending on the product category and target market. However, understanding these key players is crucial to grasping the complexities of getting your favourite FMCG product onto the shelf.

Now, let’s discuss the two main categories of retailers in India’s FMCG sector: General Trade (GT) and Modern Trade (MT). 

General Trade: The Cornerstone of FMCG Distribution in India

General trade encompasses the smaller, independent stores well known as kirana stores. These handy convenience shops are conveniently located around the corner of every street in India. 90% of trade in India happens through general trade. So, they may be compact, but their reach is undeniable.  

According to a 2023 report by Nielsen, a leading market research firm, a staggering 75% of FMCG sales in India still flow through this traditional channel.

This means that the majority of FMCG products you buy, from your go-to shampoo to that instant noodle pack, likely made a pit stop at a friendly neighbourhood store 

before reaching your shopping basket.  

The USP of these stores lies in the bond between the shop owners and their customers. Many general trade outlets offer a personalised touch, where the shopkeeper recognizes your preferences and might even extend you credit for regular purchases. 

Modern Trade: The Rise of Organized Retail in India

While General Trade reigns supreme in terms of current market share, a new wave is rising in the FMCG industry that is Modern Trade (MT). This segment comprises the organised retail giants we’re increasingly familiar with like supermarkets, massive hypermarkets, and budget-conscious discount stores.

These stores are typically part of large chains, ensuring consistency in layout, product offerings, and even pricing across outlets. Unlike the intimacy of a local kirana store, Modern Trade offers a wider product variety.  

But what truly sets Modern Trade apart is its focus on promotions and deals. These stores leverage their bulk buying power to negotiate lower prices with manufacturers, often translating to attractive discounts and special offers for customers.  

However, the battle for consumer loyalty isn’t a one-sided affair.  Let’s delve deeper into the key differences between General Trade vs Modern Trade, where we’ll compare them across various factors to help you understand which channel might be the best fit for your FMCG brand.

General Trade vs. Modern Trade: A Comparative Analysis

General Trade: Pro’s and Con’s

On the plus side:

• General Trade has a strong local presence across India. Their accessibility in almost every neighbourhood makes them the go-to option for quick purchases and forgotten essentials.
• Consumers get personalised services in General Trade. The shop owners interact with consumers, they know their preferences and most of the time they also offer credit facility to their loyal consumers.
• General Trade can adapt their product mix based on local preferences and quickly respond to changing consumer demands. This allows brands to experiment with new offerings and promotions in a targeted manner.

However, there are also limitations to consider:

• Due to their smaller size, General Trade stores often have limited shelf and shop space. This restricts the variety of products they can stock, potentially hindering brand visibility for niche or new offerings.
• With smaller margins compared to modern trade, general stores might set slightly higher prices to maintain profitability. 
• Brands have less control over product placement in General Trade stores compared to modern trade.

Modern Trade: Pro’s and Con’s

Modern Trade boasts several advantages which are as follows:

• First and foremost, it offers a wider product selection. 
• Secondly, Modern Trade leverages the power of bulk buying, allowing them to negotiate competitive pricing with brands. This translates to potentially lower prices for you, the consumer

The challenges or disadvantages of modern trade could be:

• Modern Trade outlets have stricter listing requirements, ensuring only high-quality products make it onto their shelves.
• The intense competition within modern trade often leads to fierce price negotiations with brands. While this benefits consumers with lower prices, it can squeeze profit margins for brands.

• The focus on efficiency and product variety in modern trade can sometimes result in less customer interaction. 

So, while Modern Trade offers a modern shopping experience with wider choices and potentially lower prices, it comes with its own set of challenges for brands.  The key lies in finding the right balance between these two distribution channels to ensure peak performance in the Indian FMCG market.

Conclusion: General Trade Vs Modern Trade

The Indian FMCG industry thrives on a dynamic interplay between General Trade (GT) and Modern Trade (MT) channels. While General Trade offers widespread accessibility and personalised service, Modern Trade provides a wider product variety and attractive promotions. Understanding these strengths and weaknesses is crucial for FMCG companies to navigate this diverse market.

In today’s competitive environment, a robust distribution strategy is no longer a luxury, it’s a necessity. Companies need to effectively reach both the familiar corner shops and the large supermarkets to maximise their reach and brand visibility.

This is where Grahaak steps in. Our software solution empowers businesses to excel in both General Trade and Modern Trade channels.  

By leveraging Grahaak’s comprehensive features, FMCG companies can bridge the gap between traditional and modern trade, ensuring they reach every “grahaak” (customer) effectively.  

Remember, a happy customer today leads to brand loyalty and future sales success. So, take control of your distribution network with Grahaak.

Top FMCG Companies in India

Since the 1980s FMCG companies have revolutionized the consumption habits of Indians by significantly increasing demand especially in the Rural and low-income urban groups. Their Marketing innovations  like  ‘sachet culture’  solved the problems of purchasing capacity,lack of storage capacity and space  which provided incentive to buy more.

Today the FMCG industry is the fourth largest sector in the Indian economy and a major contributor to the nation’s GDP providing employment to around 4 million people. It is expanding due to increasing disposable income, digital transformation, financial inclusivity, brand awareness & a large youth population.

As per the Nielseniq report, India’s FMCG market was valued at 110 billion U.S. dollars in 2020. Compared to 2012, the market size of fast-moving consumer goods had tripled. By 2025, the market is expected to grow at a CAGR of 14.9% to reach 220 billion U.S. dollars fueled by consumption led growth & value expansion.

In this blog we are going to discuss what is FMCG, top FMCG companies in India and their creative strategies, and how it is a promising sector in the years ahead.

But, what is FMCG (Fast Moving Consumer Goods)?

As the name suggests FMCG, also known as Consumer Packaged Goods are goods that are sold quickly at relatively lower costs and are meant to be consumed in a short period of time like packaged food & beverages, personal care products, toiletries, cleaning supplies, and other low-cost household items – any product that people use daily and frequently.

With such promising growth, opportunity of change and success, no doubt there are established FMCG giants which are doing tremendously good in this industry. Let’s have a look at the presence and creative strategies of some of the top FMCG companies in India.

Top FMCG companies in India

Hindustan Unilever Limited (HUL)

Established in 1933, HUL, a subsidiary of the global conglomerate Unilever,  is the undisputed leader in the Indian FMCG market.

The market presence of HUL is boasted by a diverse portfolio with over 35 brands across 20 categories, including foods, beverages, cleaning agents & personal care products like

Lux: leading soap brand, Dove, Surf Excel : dominating laundry detergent market, Knorr.

What makes HUL so successful for this long is its deep understanding of consumer needs & preferences, strong and robust distribution network and relentless enthusiasm for continuous innovation. Their initiatives like  ‘Project Shakti’ empowers rural women as direct-to-home distributors enhancing sustainability.

ITC Limited

Founded in 1910, ITC Ltd has grown from a tobacco company into a diversified conglomerate shining in the FMCG sector.

ITC’s FMCG segment spans foods, personal care, education & stationery products. Almost every child in India knows the name of Classmate as the most trusted brand in stationery items.

ITC’s key brands include Aashirvaad, Sunfeast, bingo!, Classmate.

One of the reasons why ITC retained its position among the topmost FMCG companies in India is its diversification which provides stability and reduces dependency on a single industry, contributing to overall business resilience.

ITC also leverages its extensive agri-sourcing capabilities ensuring high quality raw materials for its food brands. ITC’s market presence has further strengthened due to its emphasis on rural development, rural education and sustainability, like the ‘e-Chaupal’ initiative.

Nestle India
Nestlé India, a subsidiary of the global giant Nestlé, is known for being a trustworthy brand in the wellness and nutrition industry. Heard the name of Maggi? Yes!!? That’s nestle. It has a diverse range of products varying from baby foods, chocolates, beverages, to dairy & culinary products.

Key brands are Maggi, Nescafe, Kitkat & Munch, Nestle Milkmaid.

What makes Nestle stand out is its commitment to quality & nutrition helping it earn a loyal customer base. Their ability to flow effortlessly with the ever evolving tastes and preferences of Indian customers, bring in creative innovations and infuse local tastes to global products like the introduction of Maggi with regional flavors, has been key to their success.

Britannia Industries Limited

Since 1892, Britannia has created a strong foundation and unbeatable heritage in India in biscuits & bakery products.

Key brands like Good Day, Marie Gold, Tiger, Nutrichoice are well known names and a staple in Indian households. Recently launched Winkin’ Cow under dairy section offering milk shakes and lassi is now expanding their presence in the dairy segment too.

Britannia’s success can be attributed to its relentless focus on quality &  innovation offering new flavors & variants and adaptability to evolving market trends & consumer preferences. One example includes cashing on the recent rise in demand for millets, Britannia launched several millet products from biscuits to breads.  Their long standing presence has created a strong distribution network ensuring product availability all across the country.

Godrej Consumer Products Limited(GCPL)

Part of the Godrej Groups, GCPL, has made significant strides in FMCG sector

With its market presence spanning across soaps, hair colorants, household insecticides, it has established a loyal customer base.

Key brands are Godrej no.1 soaps, Cinthol ,Good Knight, Hit.

Its success is underpinned by the trust and reliability it has gained over the years and its focus on expanding its presence internationally. It deeply understands and caters to the local needs and leverages successful global marketing strategies and practices learned from its international markets.

Dabur India Limited

Dabur India Limited, founded in 1884, is synonymous with Ayurveda & natural health care. Dabur’s portfolio spans health supplements, personal care & food products.

Key brands like Dabur Chyawanprash, Vatika, Real, Hajmola appeal to health-conscious customers.

With an increasing awareness and demand for natural and traditional remedy products no doubt Dabur products are doing great in the Indian market. Its commitment to deliver high quality herbal products and extensive rural distribution network which enhances their market reach are the key drivers of its success.

Marico

Founded in 1987 and operating in around 25 countries, Marico is an Indian MNC, known for its range of hair care, skin care, wellness & edible oil segment.

Saffola is India’s most consumed & trusted edible oil brand. Marico with its health conscious creative ads, deep consumer insights and focus on innovation has become a success among the FMCG sector. Its market share has been expanded by its strategic innovations and premium positioning brands.

Aren’t these giants commendable? These are some of the top notch players in the FMCG sector in India. Other notable mentions with their amazing marketing strategies are :

Tata Consumer Product Limited with brands like Tata Tea,Tetley,Tata Sampann.

Varun Beverages, rising exponentially with its strategic alliance with PepsiCo.

Patanjali, offering innovative Ayurvedic products.

Colgate Palmolive, a household name in toothpastes, toothbrushes and personal care.

USL, a well known alcoholic beverage brand with iconic brands like McDowell’s No.1, Royal Challenge and Signature.

P&G, a global leader in health care and hygiene products with leading brands like Whisper, Vicks, Gillette.

Wrapping Up:

bility, customer-centric strategies, and a robust distribution network.

Have questions? Contact us today.

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It’s no surprise that businesses are increasingly turning to automation software to streamline their processes and save time. But what exactly is Salesforce Automation Software, and why should your business take advantage of it? Find out in this article what Salesforce Automation Software does and how it can help your business reach its goals!

 Introduction

Salesforce automation software is a cloud-based tool that helps sales teams manage their customer relationships. It gives users the ability to track customer interactions, automate sales processes, and generate reports. This type of software can be beneficial for businesses of all sizes but is especially helpful for small businesses or businesses with limited resources. Salesforce automation software can help businesses save time and money, and improve their customer relationships.

What is Salesforce Automation Software?

Salesforce automation software is a cloud-based customer relationship management (CRM) platform that helps businesses automate their sales and marketing processes. The software includes a wide range of features, including lead and opportunity management, contact management, account management, and reporting.

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Benefits of Using Salesforce Automation Software

Salesforce automation software can help your business in a number of ways. Perhaps the most obvious benefit is that it can help you to automate your sales process. This means that you can set up rules and triggers that will automatically take care of tasks like sending out follow-up emails or scheduling appointments. This can free up a lot of time for you and your sales team, which can be used to focus on more important tasks.

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Finally, salesforce automation software can help you to close more deals. By automating repetitive tasks, you can spend more time focusing on actually selling to potential customers. This can lead to more closed deals and a higher conversion rate for your business.

Types of Salesforce Automation Software

Salesforce automation software comes in many different shapes and sizes, but there are three main types: lead management software, opportunity management software, and account management software.

Lead management software helps sales teams keep track of their leads and potential customers. It can automate tasks like lead capture, lead assignment, and lead nurturing.

Opportunity management software helps sales teams manage their opportunities and pipeline. It can automate tasks like opportunity tracking, opportunity analysis, and opportunity conversion.

Account management software helps sales teams manage their accounts and customers. It can automate tasks like account creation, account assignment, and account maintenance.

How to Choose the Best Solution for Your Business

Salesforce  software is a must-have for any business that wants to streamline its sales process and improve its bottom line. But with so many options on the market, how do you choose the best solution for your business?

Here are a few things to keep in mind when shopping for salesforce automation software:

• Ease of use: The salesforce  software you choose should be easy to use and implement. It should also be user-friendly so that your sales team can hit the ground running with it.
• Features: Make sure the salesforce  software you choose has all the features you need to streamline your sales process. There should be a tool for everything from lead management to quoting and invoicing.
• Integration: The best salesforce  software will seamlessly integrate with your existing CRM or ERP system. This will make it easier to track data and manage your sales pipeline.
• Support: Look for a vendor that offers excellent customer support in case you run into any issues using the software.

Considerations When Selecting a Vendor

Salesforce  software is a powerful tool that can help businesses streamline their sales processes. However, there are a few things to consider before selecting a vendor.

First, it’s important to understand what features and functionality are most important to your business.  can vary greatly in features and price, so you’ll want to ensure you’re getting the most bang for your buck.

Additionally, it’s important to read reviews and compare vendor’s side-by-side. See what others are saying about each vendor’s customer service, pricing, and overall satisfaction levels.

Finally, be sure to get a demo of the software from each vendor you’re considering. This will give you a first-hand look at how easy or difficult the software is to use, and whether it has all the features you need.

Conclusion:-

In conclusion, is a powerful tool that can help businesses streamline their sales processes. With Salesforce automation, businesses can save time and money while improving customer service by automating mundane tasks, tracking customer data more effectively, and providing personalized experiences to customers. For any business looking to optimize its operations and increase efficiency in the sales process, investing in is a smart move.