The APAC region presents a tantalizing prospect to Consumer Packaged Goods (CPG) businesses worldwide.
APAC will be biggest market for CPG companies accounting for >30 percent of global industry share by 2022. The distribution landscape in APAC bears little resemblance to the familiar environments of western markets. Small "Mom & Pop" retail outlets dominate, with 75 percent CPG sales taking place through these outlets (vs. ~20 percent in North America).
The cost to serve Mom & Pop retail outlets is very high. The cost does not always match-up to the benefit, i.e. the resultant revenues from these outlets. Digital will bring these costs down. Our research reveals that these mom and pop retailers are already digitally proficient in their personal lives and are embracing technology to enhance their day-to-day business dealings.
CPG companies must act now, else they will lose this window of opportunity. They need to holistically re-invent their Route to Market strategy. CPG companies need to amp up the digital strategy to enhance the trade penetration, outlet coverage, and quality of interactions with the retailers.