Several FMCG companies like Godrej Consumer, Britannia and ITC are now using stock-ready vans or mini-trucks to reduce stock replenishment time with rural retailers, according to people in the know.
This is different from the usual strategy where a person goes from one shop to another, taking orders, and then another goes to deliver them later during the day or the next day.
“By leveraging cost-efficient and agile logistical innovations, including the use of stock-ready mobile vans, we are ensuring seamless FMCG product delivery to the remotest corners of rural India,” said B Sumant, executive director at ITC.
Under the new model, a stock distribution vendor is empaneled by the company that connects a stockist with a van driver. The stockist loads the products of a company in the van, and the driver goes to around 4-5 villages per day with the vendor to take orders and deliver the products at the same time.
“The main idea is to reduce the time of stock replenishment to less than a day from one to two days, currently. This can minimise loss of revenue due to stockout,” a person aware of the developments said.
“Most companies have started this in the last few months only,” another said.
The first person said that these drivers have a wider role than just driving these vans. “They need to be updated with the company’s portfolio and also sometimes market the products of the company,” he said.
The development comes at a time when rural areas have been outpacing urban regions in demand growth. Several FMCG companies have identified the large potential of demand coming from rural areas due to rising disposable incomes and increasing internet penetration.
Britannia and Godrej Consumer did not respond to FE’s queries. However, Godrej has a programme called Project Vistaar 2.0 to drive rural sales through vans, people said.
“A pioneer of the van-led distribution model in FMCG, ITC leverages its extensive distributor network in villages, using vans for extending direct reach to a wider radius of area from each WD point,” Sumant added.
He said that they appoint stockists who run vans, expanding distribution in a progressive model. The company also uses AI tools to identify the highest potential markets for each route using geospatial mapping to decide the most optimal route for the vans.