Frugal Innovations

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Frugal Innovations

By Albert Guffanti - 12/11/2015
Lack of infrastructure, unfriendly environmental conditions and a shortage of access to accurate data, are just some of the obstacles consumer packaged goods companies face when expanding into new geographies. However, companies can take advantage of these expansion opportunities by leveraging innovative technology solutions. Here, Suresh P. Bharadwaj, senior director and product head — TradeEdge, EdgeVerve, explains how to address these challenges to achieve profitable growth in new markets.

What are some of the challenges that consumer packaged goods companies face while doing business in emerging markets, particularly when collaborating with their channel partners?
Doing business in emerging markets is significantly different from operating in developed markets, as there are several factors to be considered. Unlike developed markets, customers in emerging markets continue to shop at traditional outlets such as small or high frequency stores. To reach their consumers, these innumerable stores must be serviced. This is a significant challenge as companies need to onboard thousands of distributors to service these stores, which can be a daunting task. Further, various channel partners use different technologies that are often not integrated. This makes information management a challenging process and raises questions on the reliability of information captured from channel partners. Thus, in today’s emerging markets consumer packaged goods companies are unable to access accurate information on what was sold in the market and where. Additionally, there is a lack of visibility into inventory and sales from the channel partners and retailers. This is a pressing issue since consumer packaged goods companies conduct several promotional campaigns regularly. To ensure profitable growth, consumer packaged goods companies need better visibility into promotion effectiveness with accurate data from all channel partners as well as retailers.

How are consumer packaged goods companies addressing these challenges today?
Currently, consumer packaged goods companies in emerging markets use various manual methods to collect data from their channel partners. For instance, sales personnel may be asked to gather information from distributors — a time-consuming activity for the salesperson. Some consumer packaged goods companies have implemented systems that enable their channel partners to carry out a few daily operations such as order management. Typically, such systems are in silos and cannot be easily integrated with a common platform. There are only a few companies that leverage enterprise-level solutions to collect data from external partners for their data warehouses. In emerging markets, it is rare for consumer packaged goods companies to use fully automated enterprise-level solutions to get the right data at the right time from all the stakeholders.

What does the future look like in terms of technology innovations in this space?
Frugal innovations are going to be the way forward. Frugal innovative technologies can be easily adopted by retailers, and bridge the gap between channel partners and consumer packaged goods companies. Further, emerging markets are increasingly witnessing the adoption of mobile technology and the Internet of Things. With these two trends growing at a rapid pace, consumer packaged goods companies must look to mobile and cloud-based technologies to enable accurate data capture and smooth operations. A well-integrated cloud and mobile solution can offer quick adoption and increased visibility; thereby helping consumer packaged goods companies to achieve profitable growth in emerging markets.

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