CONSUMER PRODUCT AND RETAIL MARKET ANALYSIS

Market Challenges And Opportunities

Global Consumer Product and Retail Market Drivers:

• Fast-Changing Consumer Preferences and Buying Behavior: Consumer preferences and buying behavior have undergone major shifts in recent years, driven by demographic changes, digital disruption, and evolving lifestyles. Millennials and Gen Z now make up a significant portion of consumers, and they tend to value experiences over material goods, shop across channels, and expect hyper-personalization. The pandemic has also led many consumers to re-evaluate their values and priorities. There has been a rise in ethically and environmentally conscious shopping, with growing demand for sustainably produced, healthy products. Consumers increasingly expect brands to take stands on social issues. Rapid growth of e-commerce and social commerce is also changing how people research and buy products. Consumer demands and expectations have fundamentally transformed, forcing retailers and brands across categories to adapt quickly to new preferences around convenience, value, experience, and purpose. Retailers must cater to these trends through curated omnichannel experiences that reflect consumers' evolving values. Those that quickly adapt their strategies, offerings and messaging are best positioned to gain market share.
• Blurring of Retail Channels and Emergence of New Competition: Traditional retail channels and competitive landscapes are shifting dramatically with the rise of e-commerce, diversification of store formats, and emergence of non-traditional competitors. E-commerce giants like Amazon (American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence) have conditioned consumers to expect ultra-convenience, speed, choice, and value. Retailers across categories are competing to offer the most seamless omnichannel experience through options like BOPIS and curbside pickup. Physical stores remain important, but their roles are changing; stores are becoming showrooms, fulfillment centers, and experiential destinations. Meanwhile, new competitors, from direct-to-consumer brands to tech companies, are disrupting markets through innovative platforms, products, and distribution models. Social media has become a popular selling channel. Retailers must rethink their operations and partnerships to compete in this new omni-channel landscape against both existing and emerging competitors. They must blend physical and digital capabilities into a unified commerce strategy. Those that successfully adapt their business models are poised to unlock new opportunities for growth and market share.

Global Consumer Product and Retail Market Opportunities:

• Growth in Emerging Economies: Emerging economies such as China, India, and Southeast Asia are expected to emerge as new economic destinations, inviting businesses across the globe for different industrial verticals. Initiatives from stable governments across these countries ensure smooth economic development that favors a peaceful investing environment. For instance, the Government of India has launched a novel program called “Make in India”, which aims to facilitate investments in technology, resources, and scientific applications that are being commissioned to achieve this goal. The program will lead to employment generation as well as the setting up of more small and mid-sized formal enterprises supporting large corporations across different industry verticals, allowing private investments in previously.
• Rapid growth of micro, small, and medium enterprises (MSMEs): The rapid growth of micro, small, and medium enterprises (MSMEs) can provide major business opportunities in the global consumer product and retail market. According to Coherent Market Insights’ analysis, there are over 120 million operating globally with over 89 million operating in emerging economies such as India, China, and Southeast Asia. Formal MSMEs are more common in high-income economies such as the OECD (Organisation for Economic Co-operation and Development) and non-OECD groups, and the EU (European Union). Around 40% of these formal MSMEs are engaged in the FMCG (Fast Moving Consumer Goods) and consumer goods sectors. However, in low and middle-income economies, MSME density is rising at a faster pace, especially in the Middle East, Latin America and the Caribbean, South Asia and East Asia, and the Pacific. MSMEs play an important role in employment generation and the GDP (Gross Domestic Product) of an economy. They still employ more than one-third of the world’s labor force. With a focus on continuity of operations and processes, MSMEs seek low-cost PLM (product lifecycle management) solutions.

Global Consumer Product and Retail Market Restraints:

• Intense competition among key market players : The consumer product and retail market is facing intense competition, which is limiting its growth potential. Large retailers are engaged in intense price wars and promotional activities to maintain and grow market share. For example, Walmart (multinational retail corporation) and Target (American retail corporation) regularly roll out promotions, coupons, and price-matching guarantees to attract customers away from competitors. This focus on lowering prices, and spending heavily on promotions cuts into retailers' profit margins and restricts their ability to expand. Additionally, the rise of e-commerce giants like Amazon is disrupting traditional retail models. Amazon's wide selection, low prices and fast shipping have raised consumer expectations, forcing other retailers to invest heavily in their online and delivery capabilities just to keep up. However, most players lack the scale and infrastructure to compete with Amazon over the long-term. Overall, intense competition is creating an incredibly challenging operating environment for consumer retail companies. It has reduced profitability, led to bankruptcies and consolidation, and hindered the sector's growth potential. More collaboration and differentiation among key players, rather than destructive competition, may be needed going forward.