Indian fmcg industry overview

Urban development initiatives by the government, as well as the increasing middle class of India, has led to an increase in the number of attractive markets in the country.

Rising incomes and growing youth population have been key growth drivers of the sector.

indian fmcg sector analysis 2018

In past 5 years FMCG market witnessed a growth of Tobacco consumption is more or less a habit, and thus the bargaining power of consumers is only to the extent of choice of the brand. The rate then dropped to Growing awareness, easier access and changing lifestyles have been the key growth drivers for the sector.

The key macroeconomic indicators have weakened; GDP slowed from 7.

market share of fmcg companies in india 2017

Tobacco demand being habit-forming is largely inelastic. Nielsen used a three step approach to forecast FMCG sales value.

Market share of fmcg companies in india 2018

Demand for quality goods and services have been going up in rural areas of India, on the back of improved distribution channels of manufacturing and FMCG companies. There are three main segments in the sector — food and beverages which accounts for 19 per cent of the sector, healthcare which accounts for 31 per cent and household and personal care which accounts for the remaining 50 per cent. Growing awareness, easier access and changing lifestyles have been the key growth drivers for the sector. Nielsen used a three step approach to forecast FMCG sales value. While top FMCG companies are expanding their capacity to feed the growing domestic demand, homegrown brands have ventured into international markets. Growing youth segment and working women population, rising incomes and rising purchasing power, higher brand consciousness, changing consumer preference, growing urbanization, Increase in number of upper middle class and rising internet penetration are the biggest drivers in the growth of FMCG industry of India. The good news is marketers can directly influence more than half of the drivers of sales. We have classified these drivers of sales into two categories: those that marketers can control and those they cannot. The primary factors expected to drive a spurt in sales are a stronger GDP and rise in employment. Urban trends With rise in disposable incomes, mid- and high-income consumers in urban areas have shifted their purchasing trend from essential to premium products. Indian and multinational FMCG players are leveraging India as a strategic sourcing hub for cost-competitive product development and manufacturing to cater to international markets. Nielsen expects a steady recovery over the next few years. GST and demonetisation are expected to drive demand, both in the rural and urban areas, and economic growth in a structured manner in the long term and improve performance of companies within the sector. Low penetration levels in rural market offers room for growth.

This has allowed international brands to flourish. These trends will further lead the development of the FMCG industry profile.

History of fmcg industry

There are three main segments in the sector — food and beverages which accounts for 19 per cent of the sector, healthcare which accounts for 31 per cent and household and personal care which accounts for the remaining 50 per cent. Key Findings of The Study 4. Urban development initiatives by the government, as well as the increasing middle class of India, has led to an increase in the number of attractive markets in the country. Distribution networks are being strengthened in the rural areas. Online portals are expected to play a key role for companies trying to enter the hinterlands. Most companies rushed to capitalise on this, as they quickly went about increasing direct distribution and providing better infrastructure. The good news is marketers can directly influence more than half of the drivers of sales. Sachet packs also play a strong role in recruiting new buyers and in inducing trials.
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FMCG growth to slow down at % in Nielsen