Answer to Question #194664 in Economics for Tanmayee

Question

If you compare the FMCG supply chain in India and the United Kingdom, you will observe that they are fundamentally different from each other. As a result of this difference, FMCG supply chain in India has far more distributors in India than in the United Kingdom.

What differences in the retail environment may justify the above facts

Answer 1

Indian companies tend to have lesser connect with the customer (though things are changing). Therefore the dependence on distributors is far higher. Companies relay on the local knowledge of the distributors. In recent times, companies are reducing the number of the distributions, but still the sheer volume of small store owners in India requires a large number of distributors to service them.