FMCG majors like P&G and Unilever are looking at organised retail to give an impetus to their new products by not only launching their products exclusively at retail chains as is done internationally but also ensuring their exclusivity on these stores vis-?-vis the unorganised segment.
Hindustan Unilever (HUL) launched Dove lotions through retail chains this Diwali, exclusively through the retail chains, while P&G earlier launched its world famous olay skin care product though retail chains including Big Bazaar, Spencers’ and pharmacy chains like Guardian in the six metros.
With retail chains boom, they present an immense opportunity for FMCG giants to pilot launch their products exactly at a store which has a customer profile suited to their product, pointed out by an industry expert, since it results in fast response generation, else routing the product through the entire distribution chain could actually take a much longer time.
Given the predominance of the unorganised retail trade in the country, till now organised trade channel has not been treated separately, given its miniscule size, however, with organised retail now promising to grow at such fast pace and the advent of the big players, both domestic and international, is definitely changing the scenario. The equations are changing, retail chains are demanding exclusivity and definitely better margins, said an, industry expert.
While some like Unilever have already started to provide exclusivity others which follow a no differentiation policy between unorganised and organised retail chains do agree that concessions will have to be made to the latter. “Internationally, large suppliers like these launch their new products through organized retail and definitely keep a couple of variants exclusive to these stores, and though similar cycle have begun in India, we will have to wait and see how it develops”, said Samar Shekhawat, vice-president (Marketing), Spencers’ Retail.