Is the FMCG sector, losing its pricing power, because of intense competition?
One of the much-commented sidelights of economic liberalisation in India is the “emergence” of a large middle-class, and its ability to absorb many FMCG items. Such was the hype created about these factors that many players, not even in FMCG business, entered the sector with a variety of products leading to intensified competition at various points, especially at the regional levels. With no entry barriers — in terms of technology or investments — the FMCG business seems an easy sector to get in. There has been many a case of a new product reaching dizzy heights of turnover in a short time, but falling by the wayside once the consumer realises that the value equation is not working out. Although the role of the intermediary is important, especially as the influencer at the point of purchase, the consumer will go for a product that he wants, not necessarily the one the trade pushes. Also, as the supply chain environment has improved with better infrastructure, mere availability of produ
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