FMCG companies are facing profitability challenges due to the rise of e-commerce platforms, leading them to tighten supplies to kirana stores. Traditional retailers in India are struggling with declining profits and increased competition from online sales.

In response, major players like Dabur, Marico, Hindustan Unilever, and Godrej Consumer Products are streamlining their inventories to support their general trade partners. Dabur has implemented a one-time strategic initiative to rationalize inventories, resulting in a 5.5% dip in sales for the quarter ending September 30. CEO Mohit Malhotra emphasized that this proactive measure is essential for enhancing the profitability of their distributors and ensuring the long-term sustainability of the business.

The FMCG sector is navigating a complex landscape as it balances loyalty to traditional distribution channels with the need to adapt to the growing demand for technology-driven solutions.