Internet Data is a Commodity, FMCG Companies suffering Sales Slowdown blaming Smartphones

Do you ever thought that Smartphone sales would affect the FMCG industry? No, you didn’t. You might not realise but consumer commodities companies are suffering from loss as their sales has taken big hits over the time when Smartphones shipments in the country are at their peak.

With Digital India wave driving sales for all kinds of electronics items in the country, using the Internet on smartphones have slowly become the priority of our current generation. It is good news for the countries young minds as they can get access to better education, jobs and entertainment, all in the palm of their hands.

Though there is unusual, but significant change happening in the FMCG as the young adults have started to spend more for their data plans, recharge packs and value-added mobile related services. While their spending on snacks, sodas and shampoo have become less, as the interests shifts to getting connected all the time than spending on the packed goods.

In a report originally posted on WSJ, Venkatesh Kini, President of Coca-Cola in India and Southwest Asia, said, they are competing for consumer’s money not just with beverages and other impulse categories, but rather also with data services on smartphones. As per the current scenario, it is believed that Indians don’t spend heavy amounts on the monthly data plans. They come online when they think they need to. That’s why the telecom operators have tonnes of short term plans with interestingly better benefits than long term plans, i.e. monthly plans.

Anup Kapoor, the owner of a Mom-and-pop shop in New Delhi, says, “There was a time when kids would come and spend their pocket money on chips and chocolates”. The times have certainly changed.

It is implied in the report that most of the Indians battle to meet their basic requirements of food, shelter and clothing. Despite that the poor can be seen with a smartphone utilising the small data packs available in the country for purchase. The FMCG brands like Nestle, NSRGY, Coca-Cola and other leaders in market explains that Poor Customers out of 1.2 Billion people in India would prefer to spend on the Internet Data packs rather than buying the basic commodities that’ll fulfil their daily needs.

For a quick look at their Facebook, Twitter, Instagram and Snapchat stories, people in the country would spend on their Smartphones, rather on Snacks, Shampoo or Sodas. It might be a big concern for the companies, but it can be argued that all fast-moving consumer goods aren’t good for health. In fact, most of them might not be as healthy as we think.

Are smartphones also the Solutions?

The blame game is easy, but standing back from the ground is hard. Instead of blaming smartphone sales and increase in Internet Data Pack purchase. These FMCG brands should try to take advantage of the Smartphone industry and promote their product, instead of feeling like a competitor. Below is one such example where one company utilised the power of smartphone and not only offered free service to the poor people, but as well cleverly marketed their products too.

Godrej Consumer Products Limited, it is the largest home-grown, home & personal care products manufacturer in the country. The company that has brands like Control, Good Knight, etc., has been seen selling from mosquito repellent to body soaps, as well as hair coloration items. They offer hair colouring strategies on pre-recorded media content on your smartphones. Unilever Limited, who has brands like Ben & Jerry Ice cream and Axe Deodorant, also learned to capitalise the smartphones.

The company identified the audience who have smartphones but don’t spend much on cellular data. They established a cost-free mobile radio station, which plays popular Bollywood songs when they dial a dedicated number. During breaks between tracks, the company would advertise their brands such as Lux Soap, Brooke Bond Tea, etc. Dabur India, one of the largest ayurvedic products maker in the country recently expressed their interest launching an e-portal through which users can buy their products. Accessible to purchase items directly from smartphones.

Some brands are complaining about Internet Data being a Commodity that is overpowering Consumer packed goods, while some brands are taking advantage of Mobile Internet revolution in India.