FMCG is an acronym for Fast Moving Consumer Goods, which refer to things that we buy from local supermarkets on daily basis, the things that have high turnover and are relatively cheaper like butter, potato chips, toothpastes, razors, household care products, packaged food and beverages, etc. FMCG may also include pharmaceuticals, consumer electronics, packaged food products and drinks, although these are often categorized separately.
FMCG Products and categories
- Personal care, Oral care, Hair Care, skin Care, personal wash (Soaps); - Cosmetics and toiletries, deodorants, perfumes, Feminine Hygiene’s, Pencil Products; - Household care fabric wash including laundry soaps and synthetic detergents, household cleaners such as dish /utensils cleaners, floor cleaners, toilet cleaners, air fresheners, Insecticides, mosquito repellents, metal polish, and furniture polish; - Food and health beverages, branded flour, branded sugarcane, bakery product such as bread, biscuits etc. milk and dairy products, beverages such as tea, coffee, juices, bottled water etc, snack food, chocolate etc. - Frequently replaced electronics products such as audio equipments, digital cameras, laptops, CTVs, other electronic items such as Refrigerator, washing machine etc. coming under the categories of white goods in FMCG.
FMCG Sector Outlook
The Fast Moving Consumer Goods (FMCG) Sector is the fourth largest sector in the Indian economy with a total market size of Rs.60,000 Crores. A well-established distribution network, intense competition between the organized and unorganized segments characterizes the sector. FMCG Sector is expected to grow by over 60% by 2010. That will translate into an annual growth of 10% over a 5-year period. It has been estimated by HSBC Report that FMCG sector will rise from around Rs.56,500crores in 2005 to Rs.92,100crores in 2010. Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery categories are estimated to be the fastest growing segments.
FMCG Sector generates 5% of the total factory employment in the country and is creating employment for three million people, especially in small towns and rural India.
This industry essentially comprises Consumer Non Durable (CND) products and caters to the everyday need of the population. The business is characterized by two pillars – Strong Brand Equity and a wide Distribution Network. Brand Equities are built over a period of time by technological innovations, consistent high qualities, aggressive advertisements and marketing. Another crucial success factor is the availability near the consumer through a wide distribution network as the products involved are of lesser value but bought as daily items.
Products belonging to the category of FMCG category have the following characteristics:
➢ They are used at least once a month.
➢ They are used directly by the end-consumer.
➢ They are non – durable.
➢ They are sold in packaged form.
With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income will rise, boosting purchasing power in the countryside. However, the demand in urban...