Why Ignoring Retailers Will Kill Your FMCG Brand

Do you know about the stories of when Dr Oetker or Kellogg’s Original corn flakes first launched in India? When Dr Oetker, a $4 billion German FMCG giant entered the Indian market in 2007 with cake mixes, dessert mixes, muesli and frozen pizza, they were confident the products would fly off the shelves in India. 6-12 months down the line, the realization sunk in that this assortment was never going to scale up to become a viable business.

Similarly, when Kellogg’s launched its cornflakes way back in 1994, it thought that even if it captures just 2% of the massive Indian market, it would be able to generate more revenue than the entire US market. But just a year later,  it had captured less than 0.01% of a potential 95 crore Indian customers.

Did they do enough research or speak to enough consumers before coming into the country Of course they did. But was that enough to draft a fail-proof product launch? In hindsight, clearly not. Focus group discussions with consumers in an AC environment under artificial conditions will not generate 100% reliable, real-life answers. 

The Great Market Delusion

That’s the brutal truth about India's kirana retail – that sales strategies and GTMs cannot disregard the role that retailers play in their general trade success. Brands that overlook the hyperlocal expertise of Indian kirana retailers risk completely missing the market pulse. “Kiranas, perhaps, have the best customer relationship management (CRM) system through these informal networks which even outclasses the advanced data analytics of large retail and online stores, " says Sapna Popli, Professor at IMT Ghaziabad. 

A retailer captures the pulse of his market every single month, finely tuned to the specific demographics of his area. So in our opinion, he understands ground realities far better than the company’s sales team and the market research agency combined.

Multiply this ‘market pulse’ by the millions of kirana stores in India, and what brands get is a goldmine of authenticated, hyperlocal intelligence .From the perspective of gaining retail intelligence, kirana retailers  offer brands the most unfiltered and actionable advice, because they have skin in the game. This inherent buy-in ensures their feedback is honest and deeply aligned with market realities.

In the case of Dr Oetker and Kellogg’s, had the companies spoken extensively with retailers in different parts of the country, they might have realized that Indians do not like cold breakfasts (like cornflakes and cold milk) or at that time ( 20 years ago) the Indian consumers were not ready for ‘foreign’ categories like muesli and microwave dinners (like frozen pizza). 

How Can Retailers be the Lighthouses in your retail journey?

Local Market Dynamics for New Brand Entry

If there’s one thing we have learned from working with thousands of retailers across India, it’s this: retailers know which brands dominate their shelves and what price points their customers are willing to pay. For brands trying to enter kirana retail or expand in untapped territories, this kind of insight is invaluable. 

Like what happened with a new brand of multivitamin gummies that wanted to enter the kirana market after finding success in e-commerce. They were planning for a pre- Diwali launch to capitalize on the festive season. One thing they were sure of is their products would sell more near posh high-rise settlements or offices. To ensure proper assortment and placement, they reached out to retailers through a survey via the Badho app. The results were quite interesting. 

The first was that retailers who expressed interest in stocking their large combo packs were the ones close to hospitals and gyms rather than high-rise localities (which preferred smaller SKUs because of limited storage area). The other big insight was that retailers wanted higher initial margins (12% ) vs what the brand had planned (8%) to justify shelf space allocation being taken away from established brands. The brand was able to make insights-led decisions to prune the territories they would launch and ensure a much more effective product assortment. 

One brand found a unique way to build visibility and identify interested retailers. Instead of traditional brand introduction methods, Gulpin, a new entrant in the beverages category  tried something different via a survey on the Badho app. They created an interactive retailer survey, offering instant monetary incentives for completing the survey. Each question subtly educated retailers about their product benefits. E.g. Did you know that our 4 flavours are available in 2 sizes. 

As a result, retailers who completed the survey were 3x more likely to stock the product compared to those who didn't take the survey. When the ‘brand aware’ retailers received restock notifications, their click-through rates jumped from the industry standard of 1.5% to an impressive 5.2%.

Inputs on Product Development & Innovation

A big Indian FMCG brand was planning to enter the Atta segment. Their packaging team had designed sleek, modern bags in 2kg, 5kg, and 10kg variants. Standard market research suggested consumers loved the design. But the brand wanted to engage with the retailers to understand if they would stock the same. A retailer marketplace app like Badho was the perfect tool for getting authenticated insights from thousands of retailers across India within days. 

They conducted a quick survey using the Badho app and uncovered something fascinating: "Your packs look great," said one retailer from Lucknow, "but how are they going to carry the 5kg and 10kg packs home? Most of my customers live nearby so they come walking. To get customers to buy your brand, give them something that competition doesn’t offer.” 

This simple insight from thousands of retailers led to a fundamental design change , adding sturdy handles to all Atta variants. Today, the brand is ready to launch their new product with the confidence that they will be able to give an advantage not just on flavour, freshness and price, but also on value.

Insights on Effectiveness of Promotion & Trade Marketing

A leading chips and dips manufacturer planned to launch a "Buy 2 Get 1 Free" promotion during Diwali, confident that it would drive sales. But feedback from retailers received on the Badho app told a different story. During festivals, customers don’t look for bulk deals, they want something festive and presentable. The retailers suggested creating special gift packs with the same value proposition, and the brand took their advice.

The festive packs delivered 2x better performance than their regular promotions. But it didn’t stop there. Retailers also highlighted that the morning hours were prime for festival shopping, which led the brand to time their in-store sampling during peak footfall. The combination of tailored packaging and smarter sampling turned an unremarkable promotion into a festival-winning strategy.

Stock Keeping Unit (SKU) Rationalization

Retailers also keep a sharp eye on which sizes fly off the shelves and which don’t, because it directly impacts the space they have for storing inventory or the ROI they get from their display shelves. A personal care brand has 8 variants of shampoo across different sizes. They were already running many attractive promotions on the Badho app, but the frequency of repeat orders was low. They wanted to capture retail intelligence from the 10,000 retailers they were present in and understand the cause. 

Insights from the Badho app revealed that 80% of their sales came from just 3 variants and 2 sizes. More importantly, they shared that stocking slow-moving variants was hurting their working capital and shelf space efficiency. This insight helped the brand streamline their portfolio and activate special promotions to get better offtake on the long-tail SKUs, which led to better retailer relationships and more focused marketing investments.

Kirana Retailers : The OG of Indian Retail

The future belongs to brands that grasp a fundamental truth: whether it is a pull economy (demand-led new products) or a push economy (manufactured demand), retailers will always be the most authentic and reliable source of retail intelligence. Ignore them, and you risk losing touch with the very consumers you aim to serve. Partner with them, and you get not just access to shelves, you get to tap into the heartbeat of the Indian traditional retail ecosystem.

Amid the loud buzz around quick commerce, Indian kirana retailers are quietly fighting back, and maintaining their dominance by blending technology with their deep-rooted strengths. For example, they use WhatsApp to take orders from local customers and send ‘chottu,’ the delivery boy, to fulfil them. They use platforms like Badho to get access to better deals, expand their inventory, and show the FMCG industry that the kirana network is not going anywhere. 

Badho, on its part is helping democratize this retail intelligence and enable FMCG brands to take incisive actions in the field.  So let’s get your ‘Happy New Year’ started with handpicked retailers who have the potential to light up your sales effectiveness through strategic retail partnerships, targeted channel marketing and long-lasting relationships.