India is one of the fastest growing economies of the world and home to a burgeoning middle class that is ready to spend on consumer goods in a big way. The businesses that serve the common people’s need are popularly known as FMCG (Fast Moving Consumer Goods) business. It includes manufacturers, distributors, and retailers. The number of products that the industry represents is almost endless and includes the detergent company and cleaning products manufacturers in India – the two sectors that have seen extraordinary growth.
In the last two decades, the FMCG industry in India has grown by leaps and bounds and the evidence to this is the mushrooming chain stores across the length and breadth of the country. FMCG industry analysis says that the FMCG industry in India is one of the fastest growing business segments and this is proved by facts. It has been observed that many big businesses and groups are already into it or planning to enter the area.
However, the cap on 100% foreign-owned FMCG sector still continues. Chances are that as the industry begins to mature, this restriction might be relaxed or removed completely according to FMCG industry sources.
FMCG Industry Characteristics and Advantages
Though it is not all roses for the FMCG industry, there are a few indicators that forecast a bright future for the sector in India.
- Demand is set to grow on a massive scale with a good patronage from young people in the 20-35 age groups.
- Consumer spending is in India is expected to grow from current levels to $3.6 trillion (by 2020); that is double of current level.
- Brand awareness is taking shape definitely. This means bigger demand for packaged goods that are useful as well as attractive.
- International operators (multinational companies) view the Indian FMCG industry as a plum place for their growth strategy.
FMCG Industry Benefits
The benefits of FMCG industry on the people are enormous and chiefly act as catalysts of a robust distribution system. Though people generally see FMCG industries companies as an efficient distribution system, the fact is it is much more than that.
Here are some undeniable FMCG industry benefits:
- FMCG generates job opportunities on a large scale. It is reputedly the fourth largest business segment in India and also the most preferred by job seekers.
- Promotes opportunities for the development of online distribution industry.
- Provides innovative avenues that benefit the advertising industry and employment for media personnel.
- Contributes extensively to the GDP of the country.
- Promotes Exports and foreign exchange inflow.
FMCG Industry Challenges in India
Although the FMCG industry has grown enormously, it is a fact of life that they also face insurmountable challenges such as:
- Complex distribution system and added to this is the unreliable logistic problem.
- Complex taxation system that increases the cost of product and distribution.
- Competition from the unorganised sectors that bypasses the tax dragnet.
- Lack of proper of cold storages and preservation facilities in rural areas.
- Expensive real estate and high labour cost of administering stores.
- Poor logistics that prevent movement of goods on a timely basis.
- Lack of standards and prescriptions for a level playing field.
- Building relationships and customer loyalty.
Information Technology in the FMCG Industry
In the immediate future information technology is bound to play a major role in meeting challenges. Technology will play a vital role and apps will be widely used to solve many of the immediate problems that FMCG companies face. Automation is a top priority for many operators and these are expected to be met with the introduction of exclusive CRM (customer relationship management) tools and the likes. Another vital areas where FMCG will have to concentrate and direct their investments is the competition and competitors using technology based solutions.
Even though there are drawbacks in FMCG Industry but the benefits are huge. If we address the drawback of this industry in a scientific way there is no way one can stop you from staying ahead of the competition.
Savoncare is a leading detergent company manufacturing home cleaning products which are AZO free and safe to use. Head out to our product section and have the look of our domestic cleaning supplies.