In the last few years, a key trend has been noticed towards miniaturization of products. This was very visible in rural areas of India, where people preferred to buy smaller units. It is like buying a sachet of shampoo or washing powder, instead of buying a 1 KG packet. When there was rural stress, many of the rural customers had shifted to such smaller units and FMCG companies had quickly modelled their last mile products to the new need. Now that trend towards tiny units is being seen in urban India too.

Partially yes, but entirely no! There is no doubt that consumer buying has come under pressure. This is not only visible in urban demand for FMCG products, but also for cars, 2-wheelers, consumer durables etc. Ironically, the demand for premium products has continued to rise implying that among better endowed buyers, the pressure was not high. The stress is more on the thinning middle-class population. However, scratch the surface and Sachetization is only part of the story. The real story, perhaps, lies in the way Indian households are starting to manage inventories on a JIT basis. 

There has been a subtle shift in the way Indian households shopped. About 25-30 years back, typical shopping was all about going to the city business district. Things changed about 25 years ago with the proliferation of malls that underlined the retail experience. In the last 5 years, even the trend of going to a nearby mall for all your household needs is on the wane. First came digital home needs delivery about 5 years back, but then the entire process flow was still clumsy. All that has changed with the arrival of quick commerce. The big names like Blinkit, Zepto, and Swiggy Instamart have brought a revolution in the way goods are delivered. Also, the onus of inventory management has shifted from the household to the digital platform. 

Sachetization is not just a new worrying trend about liquidity tightness. It is also reflective of the way households have changed how they manage inventory of goods. Thanks to 10-minute delivery, any household can afford to opt for a just-in-time (JIT) model of inventory management. The days of stacking up for weeks and months is history. Quick commerce has used dark stores to fine tune inventory handling to such a level that small frequent orders are possible. India does not have to fret about some sort of spending crisis. It is just handling the inventories a lot more efficiently!