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FMCG Firms to Help Traditional Sellers

Packaged grocery and consumer goods firms are introducing online-only sets with different prices and new terms of trade with better margins for traditional sellers as new wholesalers disturb conventional distribution models.
The progress comes amid a dispute with traditional distributors who have made allegations on grocery and fast-moving consumer goods (FMCG) firms for selling their products at lower rates to wholesalers like Reliance, JioMart, Metro Cash & Carry and Udaan.

“The traditional way of providing consumer goods will be disturbed as Kirana stores are going digital and ordering from apps of wholesalers like our competitors and us as they are getting everything under one roof,” said Arvind Mediratta, managing director of Metro Cash & Carry.

The Covid-19 pandemic and lockdowns accelerated the transition to digitisation and technology in the retail sector, which led to increasing trade channels and many consumers switching to online shopping websites for groceries, even for small items. However, the contribution of e-commerce is expanding, but it remains 10 per cent less than the overall FMCG sales.

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