In India, the FMCG sector is India’s biggest sector with household and personal care accounting for 50% of FMCG sales. The key driving factors for the sectors are growing awareness, easier access, and changing lifestyles. The urban sector that accounts for a revenue share of almost 55% is the biggest contributor to the overall revenue produced by the FMCG sector in India. Moreover, in a rural area the FMCG sector has grown at a faster pace. The semi-urban and rural segments are increasing at a fast pace and products of FMCG hold 50% of the total rural spending.
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Rural and Urban Trends of the FMCG Industry
The market of FMCG in India is distributed into the demographics of rural and urban India. The urban market shares 60% of the consumption revenue of the FMCG market in India. In India, FMCG companies have seen higher growth in rural areas in comparison to urban areas. And as 12.2% of India’s population lives in villages in India, the Indian market of rural FMCG cannot be ignored by investors. Dabur, which is known as one of the top FMCG companies in India, creates over 45% of its domestic revenue by the sales of packaged consumer goods in rural India.
Due to improved incomes and higher aspirations the rural consumption has increased. There is a high demand for branded products in India. The market of rural FMCG is anticipated to reach US 20$ billion by the year 2025 from US$ 23.6 billion in the year 2018.
Moreover, the major factor that is driving the demand for food services in India is due to the youth population, majorly in urban regions.
Related Project:- Fast Moving Consumer Goods (FMCG) Projects
Online portals are anticipated to drive a key role for companies that are trying to enter the hinterlands. The Internet has also contributed in a big way by smoothing a cheaper and more convenient mode to increase a company’s reach. It is anticipated that 40% of all FMCG consumption in India will be done online by the year 2022. The online market of FMCG is anticipated to reach US $ 45 billion in the year 2020 from the US $ 20 billion in the year 2017.
Market Growth of the Industry
- The retail market in India is anticipated to reach the US $1.1 trillion by the year 2022 from the US $480 billion in the year 2017, along with modern trade is anticipated to rise at 20-25 %per annum that is likely to push the revenue of FMCG companies. Profits of the FMCG sector reached Rs3.4 lakh crore in the year 2018 and is expected to reach US $ 103.7 billion in the year 2022. The FMCG market is projected to grow at 9-10% in the year 2022.
- An increase in rural consumption will be driving the FMCG market. It contributes to almost 36% of the overall FMCG spending. FMCG urban segment anticipated a growth rate of 8%, moreover, the rural segment reached 5% in the quarter ended September 2019.
- It is expected that India will get the US $15 billion in a year due to the implementation of GST. GST and demonetization are anticipated to drive demand both in urban and rural areas, and economic growth in a structured manner in the long term and improve the performance of companies within the sector.
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Conclusion
The project report by NPCS on “Fast Moving Consumer Goods (FMCG) Projects, Non-Durable Items, Consumer Packaged Goods (CPG), Packaged Foods, Beverages, Toiletries, Over-the-Counter Drugs, and many other Consumables” gives detailed information about these sectors. The report by NPCS covers the Indian market along with the present scenarios of the market and forecasted growth too. The report has helped many project consultants and industrial consultants in India and worldwide as it provides accurate data that is being evaluated and cross-validated by the industry players.
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