Fraud Risks in the consumer products and retail sector
The consumer products business is among the fastest growing businesses in India. Fraud can be a pressing challenge for the consumer products industry, with the potential to impact finances, erode customer trust and impact brand value.
The consumer opportunity in India rests on the changed business dynamics observed today - a large and growing youth population that is digitally savvy and knowledgeable, rising incomes and purchasing power that place importance on superior product quality, growing urbanization with emphasis on a ‘convenient’ shopping experience, emergence of organized retail that provides consistent quality in products and shopping experience, and relatively easy availability of credit to pay for purchases.
Changes in business models and consumer preferences can expose consumer products and retail companies to the risk of fraud. In addition, the pressure to report consistent sales results amidst intense competition, and the need to comply with regulatory requirements, can push companies towards adopting unethical business practices to survive in the market.