India’s retail conglomerate Future Group is looking to form a strategic partnership with the world’s largest consumer goods company Procter & Gamble (P&G).
Closer tie between the retailer and manufacturer
The partnership between the two companies involves joint sales forecasting and planning, exclusive product releases, embedding senior executives at each other’s headquarters and even supply-chain initiatives. This is similar to the relationship P&G has established with Walmart in the US, which proves to be mutually beneficial for both parties.
Future Group has the widest network in the country with around 13 million square feet of retail space in 221 cities through a 700-odd store network of supermarket brands such as Big Bazaar, EasyDay and Nilgiris.
Great potential for P&G to grow in India
P&G has invested more than Rs2,000 crore (US$299m) in India in the past three years, mainly to set up manufacturing units to reduce dependence on pricier imports. At present, it has seven manufacturing facilities in six states, accounting for more than 90% of its products sold in the subcontinent.
“As modern trade grows, P&G would want a significant share similar to what it has in developed markets. So, rather than just a distributor-led model, it is a smart step to align its needs with that of a retailer. Critical issues such as lower product availability on shelves could also be addressed,” said Devangshu Dutta, CEO at Third Eyesight, a retail and consumer goods consulting company.
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