The Indian FMCG story

When I was in college, studying advertising, ad making for FMCG brands was such a big deal. It was separate subject in itself and client servicing for these brands was a big deal. But recently, when I was doing my MBA, I came to know that the whole game has changed. Today, FMCG's are looking out for survival tricks and so are the ad agencies, who serviced them long back. The new FMCG trends we saw in India are:

Brands like Himalaya and Dabur setting up their own retail outlets
This move has been due to shortage of shelf space in Supermarkets. Whether it would be a smart will be decided by time, because this move involves investing in infrastructure and store manpower.

Giants like HUL, ITC and P&G going rural
The whole jazz about reaching out to rural India was done so well that it gained a CSR sympathy for these companies. But the reason behind this move for completely different. Our professor explained to us that these giants used to bully local kirana shop owners, decades ago for pricing and delivery. The influx of malls and supermarkets changed the story for these brands. When FMCG players used their muscle power with supermarkets, they retaliated by bringing their own store brands. Alas, the FMCG profits came down big time in India in the early 2000s. Remember HUL doing a revamp for its product lines some years back. So, the only option these brands had was to go rural and show their muscle power to small store owners in the rural India. Well, luckily it has been a success for them till now. We will have to wait and watch till supermarkets enter rural India!

Now coming back to our ad agencies, where many of my classmates might be working... Today ad agencies are looking for different opportunities like social networking, Public relations, corporate communications and consumer analytics. This is because billboards are history, magazines are becoming paperless, TV is also going to be history and radio is just for emergency entertainment. These were the bread and butter for ad agencies a few while ago. But now, due to recent changes in consumer habits, everything is gone for a toss.
I remember my group discussion for getting a B.M.M seat in SIES college, my topic was "Is Advertising important for the industry?" and  I debated for NO, its not important!