FMCG Sector


FMCG Products Overview

The regular day-to -day needs of goods that do not take much time for consumption or are perishable, so that they can't be stored for long, varying from bread, butter, milk, tooth-paste, vegetable oil, flour, biscuits, razors, chocolates, soft-drinks, beverages like tea
and coffee, shampoo, hair oil, detergents, medicines, toiletries to clothing, furniture and electronics items, et al are known as FMCGs. FMCGs is an acronym for Fast Moving Consumer Goods, which are packaged stuffs, other than grocery sold in super markets and retail shops.
FMCG Products and Categories

- Foods and Beverages
Food stuffs include bread, dairy products like butter, milk, cheese etc., vegetable oil, cooking oil, flour, chocolates, candies, ice-creams, biscuits, jam, ready-to-eat items, chips and so on. While beverages include tea, coffee, soft drinks, packaged juices, energy drinks, packaged drinking water etc.

Personal Care, Oral Care, Hair Care and Skin Care
Such products include sanitary napkins, tissues, razors, shaving creams, shave-gel, anti-ageing products, shampoos, conditioners, lotions, cosmetics, deodorants, perfumes, hair oil, tooth-paste, tooth-brush, moisturizers, cleansers, bathing soaps, body-wash and other toiletries.

Household care
Household care products consist of laundry soaps, synthetic detergents, dish washing liquid/ gel, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish, furniture polish and so on.

Electronic goods
Cell phones, laptops, computers, digital cameras, refrigerators, washing machines and other electronic gadgets are classified as Fast Moving Consumer Electronics or FMCEs.

Sector Outlook
Currently, Indian FMCG sector is worth Rs. 1300 billion and expected to be around a whopping value of Rs. 4000 to Rs. 6000 billion by 2020. ITC, HUL, Nestle and Britannia are leading this year and believed to perform well in the fourth quarter of the year also. As a result, FMCG
growth rate is registered above 15% for the present year. FMCG and Retail sector, both are likely to create jobs in India this year as well, in functions like marketing, sales, advertising, supply chain, logistics, human resources, product packaging and development, finance, operations, general management, supervising and so on.

Analysis of FMCG Sector

Low cost of production owing to labour-intensive techniques of production.
Intense network of distribution in both urban and rural areas.
Innovative brand promotion strategies that help to create a larger market share.

FMCG companies do not invest much in technology and hence fail to enjoy lower costs in long-run or economies of scale.
Inflationary pressures hit the production costs.
Imitated products in market hurt the brands.

Unexplored rural markets.
Increasing disposable income of consumers.
Large and expending domestic market.
Changing tastes and preferences of consumers- preference to packaged goods.

Last Updated: 15-October-2012