Unlocking Growth in India’s FMCG Industry: Lessons from Open Secret's Supply Chain Success
The FMCG Industry’s Pivotal Role in India’s Economy
The India FMCG Market was valued at USD 164 Billion in 2023 and is expected to reach USD 1093.06 Billion by 2032, at a CAGR of 21.61% during the forecast period 2023 – 2032. This growth is fueled by increasing disposable incomes, rapid urbanization, digital transformation, and evolving consumer behaviors, especially with the drastic rise of the quick commerce industry.
But this growth trajectory comes with challenges, especially for startups navigating a fiercely competitive and price-sensitive market. The backbone of any FMCG business lies in its supply chain - a finely tuned mechanism that determines efficiency, profitability, and scalability.
Through this blog, we’ll explore how FMCG companies can unleash business growth by focusing on optimising and making their supply chain highly robust. The blog also deep dives into how Open Secret, an FMCG startup committed to “unjunking” India’s snacks, optimized its supply chain to achieve growth in the FMCG industry - a roadmap for other businesses to navigate the complexities of the FMCG sector.
Segment Insights: Key Growth Opportunities for Businesses in the FMCG Industry
- The ‘Urban’ Indian Middle Class
- Middle-class households have seen a significant rise in purchasing power due to rising disposable incomes.
- More than 70 per cent of the urban Indian consumers are willing to pay a premium for a product that will last longer before it needs to be replaced, according to NielsenIQ.
- The Hyper-Growth Segment: Rural India
- According to NielsenIQ data, rural volume growth outpaced urban markets for the third straight quarter. During the third quarter of 2024, rural consumption growth reached 6.0%, nearly doubling the urban growth rate of 2.8%.
- Rural consumers are becoming more aspirational and brand-conscious, with over 40% of consumption in major FMCG categories like personal care and beverages occurring in rural areas.
- The Main Actors: Millennials and GenZ
- As Gen Z and Millennials account for a growing part of the population (estimated to comprise 50% of India's population by 2030), their consumption habits and preferences are becoming mainstream.
- Among them is a liking for quick deliveries and convenience, an increasing digital savviness and a desire for healthier products.
- Gen-Z consumers are far more sensitive to money-saving opportunities and socially and environmentally engaged companies.
- The rise and rise of D2C brands
- The Indian D2C market is anticipated to surpass USD 60 billion by 2027, fueled by a projected 40% CAGR.
- D2C brands have reached INR100 Crore revenue in 3-4 years compared to 18+ years taken by the traditional players.
The Startup Revolution: Disrupting India’s FMCG Industry
Over the past five years, startups have redefined the FMCG space with innovation and agility. These disruptors focus on niche categories, health-conscious products, and sustainable practices.
Notable Startups Shaping the Industry
- Open Secret: Pioneered the healthy snacking category with "unjunked" snacks.
- Mamaearth: Created a category for toxin-free personal care for parents and babies. Rode the clean-label wave and connected with millennial parents through high trust channels of marketing like influencer marketing.
- Slurrp Farm: Introduced millet-based products for kids and adults. Focused on educating their consumers about millet as a powerful ingredient to overcome price sensitivity.
- Epigamia: Innovated with Greek yogurt and protein-rich dairy alternatives.
- The Whole Truth Foods: Focused on clean-label snacks with transparent ingredient lists.
Open Secret: A Case Study in FMCG Supply Chain Excellence
Founded in 2019 by Ahana Gautam, Open Secret’s mission is to create ‘unjunked’ versions of India’s favorite snacks. With 250+ products and a consumer base of over 15 lakh families, the brand has quickly become a household name.
Positioned as a challenger to legacy brands like Britannia and ITC, Open Secret's journey is a masterclass in identifying niche markets, innovating with product offerings, and managing operational complexities like cash flow, burn rate, and supply chain challenges.
But establishing yourself as a renowned and known brand in the Indian FMCG Industry is a tough task.
Major Challenges Faced by Open Secret in the FMCG Space
1. Navigating a Dynamic Market
The FMCG landscape is highly volatile, with market trends evolving faster than ever. Open Secret had to stay agile, constantly monitoring industry shifts and adapting its strategy to remain competitive.
2. Keeping Pace with Rapidly Changing Consumer Preferences
Consumer behavior in the snacking segment is notoriously unpredictable. Balancing health-conscious trends with taste preferences required ongoing innovation and a deep understanding of what families genuinely valued in their snacks.
3. Balancing Burn Rate with Aggressive Growth Goals
Accelerating growth while keeping the burn rate under control felt like walking a tightrope. The FMCG industry requires heavy investment to ensure growth and sustainability
4. Generating Net Positive Cash Flow to Unlock Business Growth Opportunities
For a new-age startup in a hyper-competitive market, generating net positive cash flow unlocks growth opportunities like product line expansion, channel expansion etc. This ensures that they meet operational needs while scaling production
How Open Secret Cracked the FMCG Code
Over the years, Open Secret had already mastered two critical challenges - adapting to the dynamic nature of the market and rapidly shifting consumer preferences. However, achieving net zero burn rate and positive cash flow required a different domain expertise.
They had a crystal clear problem statement: a strategic financing solution tailored to their unique needs and a partner capable of executing it to perfection. And for this, they chose Bizongo.
They found in Bizongo, a worthy supply chain finance partner, for 2 critical reasons:
1. Fast, Agile Partner for Startups
Open Secret sought a partner who could match their pace and understand the fast-moving world of startups. Bizongo was quick, adaptive, and laser-focused on solving the immediate challenge: unlocking working capital through Purchase Invoice Discounting (PID). By ensuring speedy execution and seamless onboarding, Bizongo provided the agility Open Secret needed to thrive in a competitive landscape.
2. Deep Understanding and Seamless Execution
Open Secret wanted a partner who truly understood their business and industry - someone with expertise and strong market connections in the finance domain, and the ability to execute seamlessly through digital platforms. Bizongo delivered all this and more, ensuring tailored solutions aligned with their goals.
If you are looking for similar financing solutions to unlock business growth, connect with our BizongoFin Team today!
Tangible Results
With PID in place, Open Secret eliminated their burn rate within 4-5 months, achieving financial stability. This allowed them to expand their product line and gear up for the festive quarter with confidence.
“For me, businesses are not just about numbers. They are about human trust and relationships. Open Secret was built on that foundation and for me, I see Bizongo carrying that value system too. From the founders to the account managers, everyone is genuinely invested in our journey. The personal connection, the dedication, and the empathy they bring to the table is rare.
And that’s what makes Bizongo a great company to partner with! I would recommend Bizongo to any growth-focussed enterprise without question!”
- Ahana Gautam (Founder, Open Secret)
Key Learnings for FMCG Entrepreneurs
- Optimize Cash Flow: Prioritize supply chain financing solutions like SCF to bridge liquidity gaps.
- Invest in Technology: Tools like ERP systems and predictive analytics enhance supply chain efficiency.
- Focus on Strategic Partnerships: Collaborate with industry veterans who understand your challenges to find the right suppliers, manufacturers, business partners, etc.
- Adopt Agile Practices: Stay flexible to adapt to market shifts and consumer preferences.
How Bizongo Can Help
Bizongo offers tailored supply chain financing solutions for FMCG businesses and other industries. With a focused B2B Finance vertical, BizongoFin, we provide:
- End-to-End Supply Chain Financing: Addressing challenges like working capital management and vendor payments.
- Expert Guidance: Industry insights to optimize operations and scale effectively.
- Personalised Solutions: Financing that is tailored to your industry and business challenges.
Conclusion: A Blueprint for Success
The FMCG industry’s dynamic nature demands innovation, agility, and financial acumen. Startups like Open Secret demonstrate that with the right strategy and partners, even the most challenging markets can be conquered.
To achieve similar success, streamline your operations with robust supply chain solutions and leverage financing tools that align with your growth goals.
Ready to take the leap in FMCG? Contact BizongoFin Experts today and unlock new growth opportunities.
