LOOTA
The Right Fit: Distribution and Collections
Models for FMCG Companies in Asia
Insights | Corporate Clients
Asia Pacific has a rapidly growing and highly competitive Fast Moving
Consumer Goods (FMCG) sector, with strong domestic and regional players, as well as multinational companies. A significant differentiator for companies operating in this sector is the efficiency of their distribution chains. Put simply, not having the right products available, in the right place, at the right price, means that a company is unable to win market share.
FMCG companies in Asia Pacific use four broad types of distribution models: company-owned and managed; distributor driven; sole distributor; and modern retail. For FMCG companies seeking to standardize and streamline their order-to-cash processes, the model used necessarily determines their collections requirements and the type of solution employed.
However, all distribution models used by FMCG companies in Asia Pacific face a number of collections challenges.
Historically, the order-to-cash process
– with the exception of a handful of companies – has been managed by local teams, which makes standardization difficult. In addition, countries in the region have dramatically different clearing environments while buyer behavior also varies within the region, resulting in a diverse mix of receivables management processes.
Company-Owned and Managed
In smaller, more developed markets such as Singapore and Hong Kong,
FMCG companies frequently rely solely on their own sales teams and distribution networks. Companies invest in a complete sales team on the ground, as well as the infrastructure to stock goods and distribute them.
The increased control of the sales and distribution channel means that companies are able to maintain direct contact with the final seller. There is an increased ability to align the sales and
distribution channel with broader marketing strategy. For
Models for FMCG Companies in Asia
Insights | Corporate Clients
Asia Pacific has a rapidly growing and highly competitive Fast Moving
Consumer Goods (FMCG) sector, with strong domestic and regional players, as well as multinational companies. A significant differentiator for companies operating in this sector is the efficiency of their distribution chains. Put simply, not having the right products available, in the right place, at the right price, means that a company is unable to win market share.
FMCG companies in Asia Pacific use four broad types of distribution models: company-owned and managed; distributor driven; sole distributor; and modern retail. For FMCG companies seeking to standardize and streamline their order-to-cash processes, the model used necessarily determines their collections requirements and the type of solution employed.
However, all distribution models used by FMCG companies in Asia Pacific face a number of collections challenges.
Historically, the order-to-cash process
– with the exception of a handful of companies – has been managed by local teams, which makes standardization difficult. In addition, countries in the region have dramatically different clearing environments while buyer behavior also varies within the region, resulting in a diverse mix of receivables management processes.
Company-Owned and Managed
In smaller, more developed markets such as Singapore and Hong Kong,
FMCG companies frequently rely solely on their own sales teams and distribution networks. Companies invest in a complete sales team on the ground, as well as the infrastructure to stock goods and distribute them.
The increased control of the sales and distribution channel means that companies are able to maintain direct contact with the final seller. There is an increased ability to align the sales and
distribution channel with broader marketing strategy. For