5 Trends in the Global Consumer Goods Market in 2017 to 2021
Published : 01 Jun 2021 Industry: Consumer Goods
With the changing consumer preferences over time, the consumer goods companies are making strategic pivots and investments to cope with the alterations in product demands, shopping behaviours, changing tastes, preferences, channel shifts, supply chain disruptions etc. Leading manufacturers of consumer products and services are launching innovative products to meet the growing array of consumer needs and desires.
Consumer goods industry is currently in a transformation phase due to the emergence of Covid-19 crisis. In 2021, the name of e-commerce tops the list of global trends in consumer products. As covid-19 pandemic is changing the entire scenario in consumer goods market, the sellers are extending their online presence and supply chain to exploit the rising opportunity of online demands and orders from the customers across different parts of the world. The online retailers are entering new product lines to make the customer experiences differentiated and memorable.
The major shifts that have been observed in consumer goods at present includes investments in product experience and innovation, adoption of consumer-centric insights technology, alignment of business capabilities with consumer demand, re-investments in brands, concentrating on new consumer values, implementing digitalization, bringing sustainable solutions etc.
Among all such emerging trends, sustainability and health-related consciousness are also occupying their relevant space. As health and safety are becoming primary considerations for the consumers, retailing companies are now complying with such requirements of customers to achieve a responsible image in the consumer’s eyes globally. The recent study by Deloitte has proved that the companies are formulating maximum part of their product portfolio with health and fitness policies.
The consumer needs and behaviours are changing rapidly, making consumer goods companies rethink their strategy of capturing growth. The CPG companies who bank on low prices and services as their strategy for profit growth are facing challenges in connecting with their target audience. However, to succeed in the global market “one-size-fits-all” approach no longer works. The products and services must be tailored according to the consumer demands.
Increasing emphasis on emerging markets
Companies can accomplish growth by tailoring their products around the needs of the target audience. Maybe the most vital portfolio decision includes the share of business in developing markets. CPG companies have, in fact, focused on consolidating their position in emerging markets.
For example, baby food and facial moisturizers in Indonesia and India respectively. Companies that expanded their share in developing markets normally observed an equivalent rise in portfolio force.
Simple and seamless services
Instead of focusing their efforts on targeting huge, humongous markets, consumer good companies that minimize complexity have a better chance of succeeding in today’s business scenario. In 2017 and beyond, minimizing complexity will gain traction among CPG companies.
Focusing on resource allocation
Resource allocation is witnessing increasing emphasis among consumer good companies. As digital influences consumer decisions at every level, it has become all the more important for consumer goods companies to allocate resources wisely.
Intensification of Mergers & Acquisitions
To capture more market share, the companies have increased their M&A activity, which is categorized into the ones who,
- Renounced from dealing,
- Accompanied only small deals (liable for below 10% of sales)
- Took a balanced approach by pursuing a mix of large and small targets.
Deal-making strategy undoubtedly affects company performance, the companies aiming at large and small deals accomplished more M&A transactions than those aiming at only small deals. Also, the companies pursuing both large & small deals are also expected to be carefully reassessing their portfolios and reallocate resources to high-growth areas whether urban or rural.
The report concluded that as CPG industry growing slow, companies must be more data oriented, focused on best opportunities & reallocate resources rapidly if the market seems to be unstable. This may lead to making major changes at every level of a company’s organizational structure, resulting in revenue growth.
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