Amazon Wants FMCG Brands To Sell Online, Bypassing Retailers Chains Such As WalMart And Costco: Report

Amazon Inc. has started making a strong move toward the fast-moving consumer goods (FMCG) sector. The company previously unveiled its AmazonGo and AmazonFresh Pickup ventures and Thursday, it has invited brands such as Mondelez and General Mills, which produce popular foods such as Oreos and Cheerios for a three-day gathering at its Seattle headquarters in May, according a Bloomberg report published Thursday.

"Times are changing. Amazon strongly believes that supply chains designed to serve the direct-to-consumer business have the power to bring improved customer experiences and global efficiency. To achieve this requires a major shift in thinking," Amazon said in an invitation obtained by Bloomberg.

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The aim of the gathering is to persuade FMCG brands to sell online directly to customers and bypass retail chains such as Wal-Mart, Target and Costco, the report added. The gathering will include a tour of the Amazon fulfillment center and a presentation from the company’s worldwide consumer chief, Jeff Wilke.

The company wants to change the existing FMCG sale model as retail chains currently determine how food stuffs are designed, packaged and shipped. It wants the products to be designed in such a way that they can be easily and quickly shipped to customers, once they order them online. For example, laundry detergent could come in sturdier containers and cereal could be packed in more durable boxes.

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The FMCG industry is currently worth $800 million and currently dominated by retail giants such as Wal-Mart. Amazon wants this to change — it wants FMCG brands to produce for online retail by promising them increased sales, something chains such as Wal-Mart did 20 years ago while convincing the same brands for bulk production.

Amazon’s pitch is not unique as many retail chains are moving toward the online model, but their way of doing things is that the customer orders online but picks up products from the store, while Amazon wants to provide customers doorstep deliveries for products.

According to Ken Cassar, an analyst at Slice Intelligence, in case Amazon’s pitch is unsuccessful, it can also make its own products to cater to its 300 million shoppers globally.