Prospects for the FMCG industry in India

The FMCG sector has been identified as India's fourth largest revenue-generating sector, with
home goods and personal care products accounting for up to 50% of total FMCG sales. The
increase in income generated by the FMCG sector in India has been largely due to the
emergence of Indian lifestyles in slower urban areas and rural areas. Although India's urban
industry accounts for about 55% of FMCG sales, the rural industry has grown rapidly and
broadly. As a result, almost half of all expenditure in rural India goes to fast consumer goods
(FMCG) production.

The FMCG sector is expected to grow to a market size of nearly 220 billion by 2025, with a
growth rate of 14.7 percent. In addition, the FMCG sector is undergoing change due to the
rapid changes in the corporate world, where working from home has become a reality for
many.

 Digital marketing
The sudden explosion of the digital market on all social media platforms, as well as the
sudden increase in online shopping, now accounts for about 10.7% of all retail sales, up from
4.7 percent in 2019.

The state-owned e-marketplace site has processed 6.87 billion orders totalling $ 15.67 billion
from 2.0 million registered stores and service providers. Small businesses adapt to reach
larger audiences.

The FMCG sector is no longer dominated by the same old companies as the existing
products. The public has become more aware of the importance and power of having a
business in the past year. Over the past year, there has been an increase in domestic FMCG
products promising non-chemical, all natural products. Consumers who have been educated
about COVID and are aware of the environment are shifting their focus from brand names to
smaller, newer brands and brands.

 Using Communities for Marketing

The FMCG industry, like other industries, thrives on recommendations and word marketing.
According to market research and studies, about 57 percent of consumers buy a product
based on a recommendation from someone they know and trust. Over the past year, building
a community with brand ambassadors and targeting sales for the channel has helped FMCG
private and reputable private companies sell.
 Departmental action and direct delivery
Profit rates on direct sales to consumers have enticed even the largest brands to open a direct
sales channel in many digital markets, as well as websites and private stores. To improve the
online marketplace, many brands have begun to bring their products directly to customers'
homes. Consumer demand has grown by 88 percent year on year with products with websites
dedicated to consumer sales over the past year.

 Natural and Community-Based Products

Climate change and the company's environmental impact have been controversial, but since
the outbreak, most people in the country have changed their purchasing habits and decisions
based on how much the company spends on socializing and how environmentally friendly it
can be. As a result, well-known brands like Dabur and Amul have emphasized their
community-based development and earned nearly billions in FDI over the past year.

 Increased Investment
The sector has seen a sudden increase in revenue due to a new government policy on
investing in FMCG companies and accepting foreign direct investment. As a result, the
FMCG sector attracted $ 18.19 billion to FDI last year alone. Government compensation and
FDI funding have assisted the FMCG sector in strengthening operations, establishing a
sustainable supply chain, and achieving high visibility of FMCG products in all established
retail markets, enhancing consumer spending and promoting the introduction of additional
products.

Demand for FMCG-branded products in rural areas has increased due to rising revenue and
social media platforms that highlight other people's lifestyles. Companies looking to enter the
FMCG market rely heavily on online markets. The internet has played an important role,
promoting an inexpensive and affordable way to increase access to the company's market. By
2025, Indian internet users are expected to reach $ 1 billion. By 2025, it is expected that 40%
of all FMCG use in India will be done online. From US $ 20 billion in 2017, the online
market for FMCG is expected to grow to US $ 65 billion by 2022.
References:
https://www.fieldcircle.com/fmcg-management-challenges/
https://www.ideapoke.com/growthleader/biggest-challenges-in-fmcg/