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FMCG
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INDUSTRY PROFILE
FMCG industry,
alternatively called as CPG (Consumer packaged goods)industry primarily deals with the production, distribution and marketing of consumer packaged goods. The Fast Moving Consumer Goods (FMCG) arethose consumables which are normally consumed by the consumers at aregular interval. Some of the prime activities of FMCG industry are selling,marketing, financing, purchasing, etc. The industry also engaged inoperations, supply chain, production and general management.
The Indian FMCG sector with a market size of US$13.1 billion is the fourth largestsector in the economy. A well-established distribution network, intense competitionbetween the organized and unorganized segments characterize the sector. FMCGSector is expected to grow by over 60% by 2010. That will translate into an annualgrowth of 10% over a 5-year period. It has been estimated that FMCG sector will risefrom around Rs 56,500 crores in 2005 to Rs 92,100 crores in 2010. Hair care,household care, male grooming, female hygiene, and the chocolates andconfectionery categories are estimated to be the fastest growing segments, says anHSBC report. Though the sector witnessed a slower growth in 2002-2004, it hasbeen able to make a fine recovery since then.
For example, Hindustan Levers Limited (HLL) has shown a healthy growth inthe last quarter. An estimated double-digit growth over the next few yearsshows that the good times are likely to continue.
FMCG industry economy
FMCG industry
provides a wide range of consumables and accordingly theamount of money circulated against FMCG products is also very high. Thecompetition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in India,where FMCG industry is regarded as the fourth largest sector with totalmarket size of US$13.1 billion. FMCG Sector in India is estimated to grow60% by 2010. FMCG industry is regarded as the largest sector in NewZealand which accounts for 5% of Gross Domestic Product (GDP).
Common FMCG products
Some common FMCG product categories include food and dairy products,glassware, paper products, pharmaceuticals, consumer electronics, packagedfood products, plastic goods, printing and stationery, household products,photography, drinks etc. and some of the examples of FMCG products arecoffee, tea, dry cells, greeting cards, gifts, detergents, tobacco andcigarettes, watches, soaps etc.
Market potentiality of FMCG industry
Some of the merits of FMCG industry, which made this industry as apotential one are low operational cost, strong distribution networks,presence of renowned FMCG companies. Population growth is another factorwhich is responsible behind the success of this industry.
Leading FMCG companies
Some of the well known FMCG companies are Sara Lee, Nestlé, ReckittBenckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex,General Mills, Pepsi and Mars etc.
Job opportunities in FMCG industry
FMCG industry
creates a wide range of job opportunities. This industry is astable, diverse, challenging and high profile industry providing a wide rangeof job categories like sales, supply chain, finance, marketing, operations,purchasing, human resources, product development, general management.
The Indian FMCG industry is expected to grow 16% during 2008-09 with rising disposable income, changing lifestyle and rapid urbanization.
The Federation of Indian Chambers of Commerce and Industry (FICCI) predicted that the Indian FMCGindustry sales would grow 16% during 2008-09, reportedThaindian News.FICCI also revealed that during 2007-08, the Indian FMCG industry sales are estimated to grow 14.5% toreach RS 854.7 Billion. Within the Indian FMCG industry, there are few sectors that will grow more than20% during 2008-2009, like shaving cream at 23%, skin/fairness cream at 22%, shampoos at 21.3%, skincare & cosmetics at 20%, tooth powder at 22% and other care products.The prediction of higher sales growth of FMCG products is based on strong economic fundamentals suchas rising disposable income of people. Now people can afford to spend on quality FMCG products.
Moreover, increasing salaries, along with rising trend of perks in the corporate sector at regular intervals,have increased people’s spending power on lifestyle products. Even government employees too areexpending on lifestyle products helping FMCG sector to grow rapidly.Apart from this, India is rapidly changing into an urban country and with that, people’s preference for lifestyle products is growing. Hence, the Indian FMCG industry is experiencing strong growth in somecategories such as skin care, anti-aging solution, deodorants, fairness products and men’s products. Inaddition, the emergence of organized retail such as supermarkets, and shopping malls is also playing animportant role in bringing boom in the Indian FMCG market.The young generation of consumers is driving the demand for lifestyle products. Consumers are at thefront seat changing and redefining the branding and marketing strategy and marketplace for the retailproducts that are ultimately boosting the retail sales in the country.However, the fear of dissociation with earlier consumers still persists as they embrace and prefer to stick toestablished brands only. The main reason for this dissociation is weak distribution channels and marketingstrategy in the country.According to a Research Analyst atRNCOS, “The demand for lifestyle products is boosted by the risingaspiration and modern facilities. As the spending power of consumers is going up, the sales of FMCGproducts in India will rise too. Therefore, companies need to improve the quality of products and employright marketing mix by implementing new technologies such as Customer Relationship Management.”
FMCG is the acronym of Fast Moving Consumer Goods which is also knownas Consumer Packaged Goods (CPG). Fast moving consumer goods areproducts that have a quick turnover, and relatively low cost. FMCG generallyinclude a wide range of often purchased consumer products such astoiletries, soap, cosmetics, teeth cleaning products, shaving products anddetergents, as well as other non-durables such as glassware, bulbs,condoms, batteries, paper products and plastic goods. The purchasersusually put less thought into the purchase of FMCG than they do for otherdurable products such as electronic items. In comparison with otherindustries such as automobiles, computers, and airlines, FMCG business hasa steady rate of growth, for it does not suffer from huge recession andlayoffs every time the economy starts to dip. In FMCG business absoluteprofit made on the products is relatively small. Since they generally sell inlarge numbers, the overall profit on such products can be huge.
SCOPE OF FMCG SECTOR
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