Growth and Drivers of FMCG Industry in Indian FMCG Market: An Exploratory Analysis
Abstract
FMCG (fast moving consumer goods) is fourth largest sector and growth driver of Indian economy and accounts for 14% to 15% of GDP. It serves the rural and urban consumers with food and beverages, health care, household and personal care product categories. Present study has analyzed the sales, growth of sales and profit in FMCG industry and reviewed the FDI (foreign direct investment) investment in FMCG sector. Growth is driven by increasing population, demand, income, and FDI in industry. Companies are increasing penetration of brands with small packs, low pricing, awareness, availability, and expansion of distribution network in rural market. Sales of FMCG industry have grown up with the 11.02% CAGR (compound annual growth rate). ITC has made the highest sales in the past decade and Jubilant Food Works has made highest growth rate of 21% CAGR in industry. Companies are partnering to distribute the FMCG products and focused on direct reach through appointing rural distributors to serve the retailers. Technology plays a significant role to get real time information that helps stockiest to get real time order booking and retailers are get optimal delivery. It assists to avoid overstocking and blocking of capital in goods. FMCG companies are making their products available in multiple channels that include traditional, modern, and ecommerce so that consumers can be served through easy availability.
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