News & Analysis

Global Companies Seek India’s Digital Tech

India's experiments with digital technology is witnessing growing interest from global brands operating in the FMCG, fashion and retail sectors


Barely six months ago, Unilever global CEO Alan Jope had raised a toast for India’s digital innovation and waxed eloquent about how his company benefited across various activities such as managing supply chains, route to market innovation, digital innovation and marketing. Today, the world seems to be echoing his sentiments. 

Jope had specifically pointed out the amount of digital innovation happening out of India around Unilever during his speech at the Barclays Global Consumer Staples Conference last September. He had expressed hope that India would be the beacon of digital in addition to being a commercial powerhouse in the future. 

A hub for digital commerce innovations

Meanwhile, a report published by ET quoted Barbara Martin Coppola, CEO of French sporting goods retailer Decathlon as saying that in the world of tech and digital, India was proving to be an amazing innovator. “We are discussing how India can contribute to the world as well,” she was quoted as saying. 

In fact, a recent report from Deloitte in collaboration with FICCI said tech-led transformation of retail had accelerated over the past two years when the industry went phygital to survive the lockdowns. “As we enter the endemic stage of Covid-19 and with the economy gradually recovering, more retailers are expected to fast-track the adoption of digitally enabled omnichannel strategy to operate proficiently and mitigate the supply chain disruptions and increasing competition,” says the report.

It further said, FMCG and retail companies have shown ‘Resilience’ in every business area to rebound from the second wave. From manufacturing to their sales operations, to retail and logistics, to consumer insights and communication, to the way they recruit, train, and develop people. Building resilience will enable businesses to withstand future challenges and continue to create value for consumers and the economy.

HUL’s programs are getting global traction

On its part, Hindustan Unilever had innovated across value chains to provide more agility, flexibility and efficiencies to their internal systems. Their nano factory programs allowed the company to produce in batches of kilograms that helped with faster rollouts, an innovation they pioneered in India and are now expanding to other markets.

The company also set up a series of advanced dispatch centers that helped them reduce the time taken to distribute products by as much as 50%, resulting in savings of up to 8% on its annual turnover. The tightening of the supply chain operations and tweaking of manufacturing resulted in savings of close to $1 billion for the company. 

And there are many more now eyeing the tech

The ET article also quoted Harmit Singh, global CFO and growth officer at Levis Strauss to suggest that the company’s global capability center in Bengaluru helps accelerate omnichannel capabilities globally. The company is using India as a hub for building an engineering base and growing digital operations and artificial intelligence. 

India’s tryst with retail innovation got a further boost with the Open Network for Digital Commerce (ONDC), a government supported initiative, that seeks to unbundle eCommerce activities that allow buyers to choose their sellers, payment gateways and delivery agents separately. In the current scheme, these get rolled up into a single entity like Amazon. 

Post the pandemic, the country has become a talent hub for enterprises globally in the eCommerce and innovation space. The spread of UPI as a payment mechanism that allows instant money transfers irrespective of the application one uses or the banks they are linked to. Currently, Singapore has acquired the technology for domestic use. 

Andre Schulten, the CFO of Procter and Gamble had told investors recently that the company had built up digital infrastructure in India that is contributing to their ability to drive disproportionate growth, both from sales and media capabilities perspective. 

The Deloitte report said in the consumer durables sector, rapid changes enabled companies to identify blind spots across their operations to incorporate flexibile and sustainable initiatives as an integral part of their business models. Innovation in technology, digitalisation in supply chain, and tech-enabled kiranas have opened new growth opportunities for the FMCG sector.

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