FMCG industry has taken a rapid pace among growing industries and transforming local markets. Weather it is eatable or housekeeping stuffs, customer demands are raising looking towards more comfort day by day and it is obvious in a swiftly developing country.

Especially metro cities and urban areas are turning outto be most welcoming new demands and satisfying them as a result small firms, SME can take place in the game promptly. New innovation bringing new opportunity, emerging manufacturing industries, workers are getting skilled on a huge market coverage, skilled are getting more skilled but unfortunately industrialist, distributors, wholesalers have not kept an eye towards distribution channel. When high demand is being focused distribution channels are just required to satisfy the needs but improve the process of distribution.

Current Challenges In Distribution :

There is the impossibility of offering a homogeneous level of services throughout the country. This problem is especially relevant in the case of customers belonging to the organized FMCG distributors, the elevated requirements from a logistics point of view of this type of distribution (urban last-mile, many small deliveries, perishable products, frequent problems in the billing process) and the great volume of resources that are involved, mean that few manufacturers can offer a uniform level of services in all geographical zones.

On the other hand, the other structural problem identified in this type of distribution is the elevated costs associated with the order-delivery-payment cycle. It is estimated that these costs in the distributors channel are four times greater than in large-scale retail. These high costs in comparison with other logistics systems are due to multiple factors (very small orders, very frequent deliveries).

Strategically oriented companies realize that the key element of long-term success is increasing interdependence. These proactive companies understand that strong long-term profitability can be achieved by creating and promoting positive relationships, mutual benefit between members of distribution channel.

1. Major trends that distributors must address :

Flourishing in augmented economy : Starting from e-trading and new retail business trend like multiple e-commerce websites, mobile applications, chatting applications, social media, customers want all of these in order to add the traditional- in – person, mobile and shipping services. E.G: A customer if wants to buy a product using internet in the evening, picks it up at the branch office next morning and can return it to the retail outlet. Distributors can introduce omni channel and van selling techniques, one that supports wide rage of supply channels and mobility devices to cater local areas and small enterprises.

Re-structuring the duty of the distributors : Highlighting themselves is an important strategy in such markets and distributors must have to implement some innovative and easy way to serve customers efficiently. Some distributors may diversify or expand their services like delivery at shop, online ordering , online pricing system, checking inventory in mobile phone to manage traditional break bulk system. For example, a food distributor might develop a mobile app that allows chefs to track inventory and automate the reordering of supplies to meet par levels.

Inspecting & Optimizing : Most distributors must have immediate access to more data than any other player in the value chain. With the right business intelligence, analytics, and reporting tools, distributors can quickly gain new insight into not only their operations but also the impact of customer interactions on business results. For example, distributors can use data to understand the true costs and profitability of each customer. With this insight, companies can adjust their processes to increase profitability.

Hold on to the new developed trends : Distributors must be prepared to quickly adopt effective new technologies. Some distributors want to use the technology to automate warehouse for instant out scan and delivery. Modern distributors are likely to implement augmented reality to have a knowledge of single inch information in the warehouse. Van selling- instant order taking, one hour delivery and instant invoicing is a great change in distribution industry.

2. Challenging factors :

Few visible challenging factors, customer relation system, awaking customers, being far from market, organizational culture, being more responsive for customers, achieving brand promise and also recognizing various life style, understanding customers needs, these information acquisition and local brands existing in the market also could be a good threat and wasting time.

3. Technology is driving the trends in the distribution market :

E-commerce is piling up : Distributors have growing interest in building a stronger e-commerce platform for their businesses. Almost 96 % of distributors have upgraded their website. E-commerce functionality is one of the top line up distributors want to step into. The interest is widespread among both small and large distributors.

Mobile is a game-changer : Mobile has changed how salespeople do their jobs and how they access information. Distributors are taking advantage of this trend not only to provide another channel for purchasing but also to grow mind share with customers. Mostly manufacturers are likely to deliver goods as early as possible and mobile has become revolutionary in this aspect.

Analytics is a step ahead : Advancing technology is allowing distributors to process data faster than ever before, resulting in the ability to track trends and be more strategic in applying sales resources. There’s a reality gap in what distributors want to do and what they are doing when it comes to the Big Data trend.

Logistics companies are always found to be un-organized and splintered slot of trading in the history of economy. Logistics industry require change in the services and operation like no other industries for which stability and growth of this industry become stagnant.

New age logistics technology enables inter-city as well as intra city freight and cargo management for which logistics connection and network become stronger and wide. Logistics network now seem easy to operate and stand on the line to offer better customer experience. Technology is successful to streamline the entire segment.

Logistics job require high security and responsibility to move shipment from one place to another and for its globalization it require highly robust technologically advanced platform.

Recently many logistics companies who run business using cloud technology have introduced commission based model in the market, online logistics management market place. This is a new revolution in logistics industry. Now whoever it is vendor or customer can enhance their service line and provide improved customer experience.

Again concept of out-door advertising has been successful to promote and explore the new ways of Logistics business like trading events, talks shows, inviting manufacturing industries to associate with.

New business model with an objective to address the issues like utilization, length turnaround time, driver shortage and pilferage.

Logistics start-ups have tremendously presented a light to today’s logistics industry. They are implementing innovative marketing strategies such as –

• Offering cashback and discounts deals.
• Offering gold and silver coins at festive season for business to business and business to consumer customers.
• Different discount for specific services like packers and movers as like certain amount of discounts, for courier or express certain percentage.
• Cash loyalty scheme – Increasing stickiness and high chance of earning customers.
• Offering bonus amount to drivers – Who complete more than certain hours of log-in in the particular month.

Choose the Best Cloud Logistics System and Mobility Solution to Boost Your Business.

Despite of being in uncertain economic positions and having lower oil prices than before government policies and investment to develop infrastructure and grow other sources are highly expected to economic breakthrough in UAE.

Logistics activities and GCC custom support together can lead to a good co-ordination and integrated regional logistics network across middle east Asia.

Airports and other coastal area of UAE have become one of the most important logistics hub in the world. Western and Eastern globe region connect through UAE ports mostly and resulting Euro- Asia trade take place in a greater scale across the region.

UAE government seem to be highly concerned about investing on EXPO 2020 and this should be worth investing which can be a key opportunity for the growth of logistics industry.

Since oil price has gone down relatively, government is reinforcing infrastructure and expecting revenue to be driven by expanding construction activities, modernizing the logistics system and other non-oil economic sectors.

Being a member of Gulf Cooperation Council (GCC), regional trade policy and transportation corridors in the region can benefit UAE. Apart from international logistics, domestic transportation is also expected to drive.

Few of the key drifts monitored across UAE logistics industry :

• Economic diversification
• Modern construction
• Increase export level
• Increased regional trading
• Multi model logistics
• Airport and railway network expansion
• Co-ordination of custom regulations
• Augmenting service sector

Other than oil UAE GDP has been composed by several sectors such as retails, logistics, tourism, real estate, and energy as 12%, 8%, 9%, 22%, 31% respectively.

As oil price has fallen down globally near around 60-70% at the end of 2014, oil companies across globe have felt the impact on trading and individual capita income, UAE remained one of these but UAE government enforced positive policies for country’s economic overview and helped to neutralize the impact of declined oil price thorough other sectors.

In recent few years, construction industry in UAE has rapidly grown to a certain state that small companies which started with tiles, marbles, building blocks now same companies have been engaged in manufacture and large construction operation. Gradually export level of construction materials has enhanced and all neighbouring countries are associated in the same regards for which tourism and corporate presence also tremendously climbed in the global vision.

Regional trade policy and government relations between UAE and KSA closely resulted an increasing economic rate and commercial bonding. Countries having membership of GCC are continuously showing interest to enhance domestic demands and strengthen bilateral trading policies.

UAE invested more than 25billion $ to build its railway infrastructure which has risen multiple sources of multiplies countries revenue and one among them is logistics. Logistics industry’s contribution is around 8% which is expected to grow around 23% by 2020.

Railways structure is designed in such a way that all the parts of emirates can be connected with each other and boost the internal communication. 11 billion $ already allocated to Etihad rail where as Abu Dhabi Department has sanctioned a budget of 8 billion $ for metro and DUBAI approved around 2billlion $ for its tram and metro communication project.

The planned regional trading position in DUBAI and increasing modern construction surely will capture a new picture of spontaneous growth of logistics business.

Growth of logistics carry out the growth of technology implementation, new formed logistics companies and government approach to modernize the technology in UAE towards multiple countries has been bringing a rapid successful growth.

In Shanghai 2010 international visitors were around 6% and in 2015 Italy it was projected to attract more than 30% and in 2020 it is clearly a challenge for UAE to meet at least 40%.

After government’s sincere contribution, greater range of preparation and huge multi billion investment by industries, it shows that UAE is an emerging spot for logistics in near future and for small to medium business it is like a golden opportunity to invest in logistics sector.

Cloud based platform integrated with augmented reality and world’s most advanced multi-model logistics system “LogixERP” and mobility platforms are highly requisite for upcoming UAE logistic industry.

Recommendation: LogixERP cloud logistics system for international logistics business.