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CPG industry revolution in the Philippines

The consumer-packaged goods industry is being forced to undergo a major transformation.  Technology drives this transformation as businesses pivot to meet evolving consumer demands and market dynamics while enhancing operational efficiency. Modern consumers prioritize convenience and instant access to products and services, particularly those aligned with environmental concerns. In the Philippines, the consumer packaged goods (CPG) segment is aligning itself with the digital platforms. This is to ensure that their existence remains competitive in an environment where there are multiple options. This shift is further strengthened by the presence of numerous BPO companies, as they play a key role in ensuring a smooth transition.

The CPG industry in the Philippines witnessed considerable shifts during the Covid-19 crisis, in reaction to the ever-changing consumer behaviors followed by the proliferation of e-retail. The mushrooming of offshoring companies in the Philippines changed the way consumers shopped. Those other conventional channels like the family-owned groceries, ‘sari-sari stores’, and ‘transient shops’ are still dominating the market accounting for a big chunk of retail sales on one hand but stores such as Puregold and SM stores have also earned huge market shares. Economic challenges including inflation have forced consumers to be sensitive about price and as per McKinsey, their spending behavior has been highly affected. However, this sector will continue to thrive, as all customers need to eat, drink, and wear clothes, signifying an element of stability.

Rising trends revolutionizing CPG industry

Technologies leveraged by the CPG industry in the Philippines

  • Automation: Responsible for making the current manufacturing process in CPG companies more efficient and productive, thereby enhancing the quality control of products, increasing workplace safety, and reducing costs. Through the evolution of automation, not only manufacturing vital processes but also packaging and assembly is reconsidered, evidenced by installing robotic arms for packaging and automated guided vehicles for warehouse operations.
  • Artificial Intelligence (AI) and Machine Learning (ML): AI and ML play an important role in driving data for the implementation of effective decision making for operations across the board. By deploying such technologies for demand forecasting which can be done by outsourcing to the Philippines, inventory is managed.
  • Internet of Things (IoT): IoT enables interrelated systems that allow sharing of supply chain data in real time and connect information points. Sensors and RFID tags will monitor the product from the manufacturing process stage to the distribution stage, providing the best possible inventory management, and thus improving the supply chain logistics. The use of smart shelves connected to IoT and traceability systems can be handy as well.

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  • Data Analytics: Analytics with cloud assist help in having very detailed information by analyzing large data sets, which helps the organization to take informed decisions and by making these decisions, operational efficiency can be achieved. For example, Trade Promotion Optimization (TPO) analytics is one of the methods used for improving promotion strategies.
  • Enhanced CX: Technologies like Augmented Reality (AR) and Virtual Reality (VR) are transforming the retail sector through virtual stores. Here customers can experience a more hyper-personalized, engaging and interactive approach to shopping. Customer service in retail is on a massive technology over-drive.

The significance of taking up these technological advancements isn’t overstated. They are key pillars that will facilitate CPG companies to be on par with the rest and to tackle everyday operations challenges, reducing costs and increasing efficiencies along the supply chain. Apart from the Philippines, markets like India, Costa Rica, and Columbia, which house Movate’s delivery centers also contribute to the successful adoption of technology in the CPG industry. Movate has been innovating successfully in CPG industry automation and has helped several companies transform their businesses.

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