While e-commerce will surpass modern trade in overall sales, it will still remain a very important channel for the urban India. Metros (cities over 1 lakh population) now have almost one fourth of their sales coming from the modern trade stores.
Apart from the growth in digital commerce and relevance of modern trade, there will also be changes in the general trade channel which has stayed quite the same for decades. While some kiranas in urban areas will likely upgrade to look more like modern stores in the future, there would be a large scale adoption of digital payments and direct ordering from the FMCG brands.
Finally, the social commerce channel will see robust growth in the coming years, recording a CAGR of 62.4% during 2022-2028: as the number of internet and social media users surges. Social media will likely become a vital shopping platform as they allow for more customized offers and target-specific ads, thanks to the high volume of user data collected by social media apps.
Trend 5: Millennials and GenZ become the main actors
As Gen Z and Millenials account for a growing part of the population (34% for Millennials and 27% for Gen Zers), their consumption habits and preferences are becoming mainstream. Among them is a liking for quick deliveries and convenience, an increasing digital savviness and a desire for healthier products.
The requirement for quick deliveries is especially true for the convenience of having the product delivered at home or available at your doorstep; after having experienced these new channels during the pandemic, the consumers are more likely to use them than post-pandemic.
Hybrid shopping accounts for 27% of consumer purchases and 36% of purchases made by Gen Z.
Millennials and Gen Z are far more challenging to reach through old-fashioned marketing campaigns: 84% of Millennials don’t trust traditional advertising; they are far more sensitive to experiences than hard sells.
Gen-Z consumers are far more sensitive to money-saving opportunities (as they are less confident about the future and tend to check their bank balance more frequently) and socially and environmentally engaged companies.
61% of Gen Zs believe brands are better positioned than governments to solve social problems. They also prefer buying Indian products: 92% of Indians have reported purchasing local products over imported ones.
More consumers will compare different options before buying, thanks to the increased online information. They will also be more attentive to the information displayed on the packaging (“knowing before buying” behaviour)
Health will remain a concern in the FMCG Market: in F&B, dietary preferences will shift towards organic/vegan products, driving sales of health & nutrition-focus brands.
Consumers will prefer branded products as they are perceived to be associated with better quality, safety and health benefits.
Women will become a new class of consumers online: they represented 44% of online consumers in 2020, up from 34% in 2010.
Trend 6: Consumers to get older and wealthier
By the year 2050, India will have a notably larger mid-age population. They will likely have more purchasing power (being a family and not single households) and will buy according to their life-cycle stages: couples typically buy more durable goods, parents buy children or family-related products, and their expenses in-home care/ personal care increase towards family-sized packs; finally when children leave the nest, the revenue of the parents stabilize, and they can spend more on luxury/health related items.