Let’s just travel back in the days of barter economy; it was the time when every human being was a product. We were offering services and in return, we were getting services. When we have a look at the current trade practices then we find that currently, this industry is moving in scattered streams. It is a boom time for small producers to cut down the big chains and compete with the big players in the market.
Concepts like the economy of the scale and others were the order of the day in the past. However, the arrival of the knowledge economy changed this marketplace quite considerably. Now it has become a battleground for the technologies and the new ideas. It is a favourite sector for the regular investors because the profit margins in the field of FMCG are high and they keep the balance sheets of the companies’ heavy all the time. This heavy balance sheet always mitigates the impacts of the losses because it is a shared loss among a chain of distribution. They were holding the goods in a given season when it was in the big supply and then releasing it when the supply gets over and new demand seeps into the next season.
In the past, the retail chains were doing great business because they were able to control the price factor with the help of bulk buying and other solutions. However, in the current scenario, things have changed, now online trading companies are penetrating this industry segment with great force. They are changing the ecosystem of this market quite considerably and this is why as an investor, one has to look at the latest and the best reports that can serve his interests well. Every healthy investment portfolio should ideally have a few stocks from this sector to keep the ball rolling in their favour during the tough times of the market.