Fast-growing markets are the future of fast-moving consumer goods (FMCG). These regions already account for nearly half of global consumer spending and drive most of its growth. In 2024 alone, emerging economies achieved an impressive ~11% year-over-year increase in consumer goods retail sale value – more than double the growth rate of developed markets. A modest 3% volume increase in these regions accounted for nearly all global FMCG volume gains last year.
Yet, FMCG brands are failing to capitalize on this potential, trapped in outdated distribution models that limit their reach and stifle growth. For example, despite the staggering costs of stockouts and inventory inefficiencies, over $1.75 billion globally, much of the FMCG trade in emerging markets still relies on pen-and-paper bookkeeping, slow manual processes, and fragmented last-mile logistics. The result? Inventory black holes, underserved communities, and billions of dollars in lost revenue.
Digital transformation, especially powered by AI and Open Commerce is no longer optional for FMCG brands – it’s the key to unlocking the vast opportunities these markets present.
Fast-Growing Markets at a Glance: Latin America and Africa in Focus
Emerging markets, characterized by rapid economic growth and industrialization, are transforming the global landscape. Regions such as Africa and Latin America, driven by expanding middle classes and surging consumer demand, present enormous potential for economic development.
Some of the features that make fast-growing markets indispensable to FMCG brands are:
- Vibrant Economies and Rising Consumers
Emerging countries in Africa and Latin America offer significant growth opportunities for FMCG demand due to strong economic fundamentals, youthful demographics, and rising middle-class incomes. These regions’ GDP is projected to grow 4.0% annually through 2035, far outpacing the ~1.6% growth in developed economies, with consumer spending in Africa expected to reach $2.5 trillion by 2030. Urbanization, improving education, and higher per-capita incomes are driving increased consumption of packaged goods, beverages, and personal care products in these regions.
- Digital Commerce and Mobile Payments Boom
Fast-growing markets are rapidly adopting mobile technology and digital finance, transforming how consumers transact. Sub-Saharan Africa leads in mobile money, with $2.3 billion transacted daily. Latin America’s fintech and e-commerce sectors are growing quickly, with online retail sales jumping by ~35% in 2020 (to $85 billion) and continuing to double-digit growth. These trends, powered by increasing internet access and mobile banking, make consumers in these regions more accessible through digital channels and comfortable with online transactions, presenting significant opportunities for FMCG businesses.
- Rising Consumer Spending and Middle-Class Power
The rise of a middle class with disposable income is transforming consumption in fast-growing economies by driving global consumer spending growth. Between 2010 and 2020, 70% of this growth came from emerging economies. As incomes increase, households shift to branded goods, boosting demand in categories like beverages, snacks, hygiene products and personal care.
The Traditional FMCG Distribution Model in Fast-Growing Markets is Broken
Despite the immense opportunity emerging markets present, FMCG companies face significant hurdles in unlocking growth due to inefficient and outdated traditional distribution models.
Here’s how the traditional distribution model in fast-growing countries restricts FMCG growth:
- Fragmented Traditional Trade Networks
Many African and Latin American FMCG ecosystems rely on thousands of mom-and-pop retailers supplied by multi-layered distribution chains—manufacturers, importers, wholesalers, and distributors. This complexity breeds inefficiencies, from overlapping delivery routes to partially loaded trucks driving up logistics costs.
- Reduced Visibility due to Lack of Real-Time Data
The traditional FMCG distribution model does not have the capacity to capture valuable outlet-level data and, therefore, cannot provide real-time insight and visibility across the supply chain. This means that brands are essentially flying blind, unaware of what sells where, when stockouts occur, or how promotions are performing at the street level.
- Outdated, Manual Processes
The FMCG ecosystem still relies on antiquated systems that slow operations, introduce errors, and limit visibility into inventory and demand. For example, many large distributors still rely on manual methods like pen-and-paper order-taking and bookkeeping.
- Increased Stockouts
Traditional FMCG distribution leads to increased stockouts, with up to 10% of FMCG products being out of stock at any given time. This reduces sales, reduces brand loyalty, and more importantly, puts essential goods out of consumers’ reach, especially in underserved communities.
- Limited Market Reach
Most FMCG brands in emerging countries are only able to serve a fraction of the available retail outlets, (about 30–35%) due to the fragmented “last-mile”. Often, multiple small distributors cover the same areas, with delivery trucks running partially loaded and delivery costs per unit skyrocketing. This leaves vast areas — both in the cities and rural areas — without access to FMCG products, despite strong demand.
These inefficiencies drive up costs, reduce profit margins, and—to put it bluntly—leave money on the table in markets that should be thriving.
Open Commerce Can Unlock Billion Dollar Opportunities in Fast-Growing Countries
To fix the problems with the traditional FMCG model, brands must embrace digital transformation and completely overhaul how they operate in these markets. Advanced technologies, such as AI-powered Open Commerce, can eliminate inefficiencies, modernize distribution, and generate live insights across the entire supply chain, unlocking billions in revenue potential.
RedCloud has built the world’s first AI-powered Open Commerce platform, designed for FMCG brands, wholesalers, distributors, and retailers across fast-growing economies. Here’s how it works – and why it’s a game-changer for FMCG brands in emerging markets:
- Eliminate artificial barriers to trade
Open Commerce connects FMCG manufacturers directly with distributors and small retailers in real time, cutting out unnecessary intermediaries that add costs and inefficiencies. By bypassing unnecessary layers, brands can penetrate regions previously out of reach without the need for costly physical infrastructure.
- Provide real-time data & visibility across the supply chain
Our Open Commerce platform can generate live market data from thousands of data points across the supply chain. The platform leverages AI to transform the raw data captured into valuable insights into sales patterns, stock levels, and demand trends, all available at the click of a button. FMCG brands are now empowered to make data-driven decisions, and apply these insights to tailor product mixes, allocate inventory effectively, and target hyper-local marketing campaigns.
- Enhance supply chain efficiency
Open Commerce technology provides a centralized digital platform for FMCG brands and distributors to manage their supply chains. It allows delivery route optimization, ensures full truckloads and significantly cuts down logistics expenses. The result? Lower costs for brands, competitive pricing for consumers, and higher margins for everyone involved. Cerveza Goyeneche, a beverage brand in Argentina, has recorded reduced costs and better logistics management with Open Commerce.
- Solving stockouts and ensuring product availability
With AI-powered Open Commerce, brands can reduce stockouts, improve product availability on shelves, and keep consumers loyal to their favorite brands. A recent study shows that adopting AI-driven demand sensing can reduce inventory forecasting errors by up to 50%.
- Penetrate new geolocations and increase market reach
Open Commerce allows brands to increase market reach and expand into entirely new regions to capture demand. Every single distributor and retailer across the supply chain becomes a new node in an ever-growing network. This allows manufacturers to reach even rural villages that were once accessible, unlocking new revenue streams in those hard-to-reach areas.
For example, Gunniess Nigeria has seen their products successfully break into previously untapped areas by partnering with RedCloud’s Open Commerce Platform. BOGO beverages, another beverage brand in Nigeria, reports that partnering with RedCloud’s Open Commerce platforms would help increase their market reach to more parts of the country.
- Solve the cash problems for brands and distributors
Cash still remains a major mode of payment in many emerging markets. However, this constitutes a problem for FMCG brands and large distributors, as cash is difficult to store, transport and reconcile. RedPay, RedCloud’s Open Commerce powered digital payment solution, incentivizes retailers to accept and make digital payments, which shortens the fulfilment cycle for suppliers, and ensures continued access to capital.
Fast-growing markets are where the future of FMCG will be won or lost. The traditional models that sufficed in developed economies simply won’t cut it here. Digital transformation is a necessity for brands seeking to grow.
Open Commerce is the bold solution these markets demand. By dismantling outdated distribution systems and replacing them with transparent, tech-enabled platforms, FMCG companies can unlock massive growth opportunities while revolutionizing how trade operates globally.
Are you ready to transform your FMCG business and capitalize on the untapped billions in fast-growing markets? Contact us today to see how Open Commerce can help your brand unlock growth across Africa and Latin America.
