FMCG Industry in India.

Fast moving consumer goods (FMCG), also known as consumer packaged goods (CPG) are the products that have a quick turnover and relatively low cost. Consumers generally put less thought into the purchase of FMCG than they do for any other products.

The Indian FMCG industry witnessed significant changes through through 1990's. Many players had been facing severe problems on account of increased competition from small and regional players and from slow growth across its various product categories. As a result, most of the companies were forced to revamp their product, marketing, distribution and customer service strategies to strengthen their position in the market.

By the turn of 20th century, the face of Indian FMCG industry had changed significantly. With the liberalization and growth of economy, the Indian customer witnessed an increasing exposure to new domestic and foreign products through different media, such as television and the Internet. Apart from this, social changes such as an increase in the number of nuclear families and the growing number of working couples resulting in increased spending power also contributed to the increase in the Indian consumer's Personal consumption. The realization of the customer's growing awareness and the need to meet changing requirements and preferences on account of changing lifestyles required the FMCG producing companies to formulate customer-centric strategies. These changes have a positive impact, leading to the rapid growth in the FMCG industry. Increased availability of retail space, rapid urbanization and qualified manpower also boosted the growth of the organized retailing sector.

HUL led the way in revolutionizing the product, market, distribution and service formats of the FMCG industry by focusing on rural markets, direct distribution, creating new product, distribution and service formats. The FMCG sector also received a boost by the government led initiatives in the 2003 budget such as setting up of excise free zones in various parts of the country that witnessed firms moving away from outsourcing to manufacturing by investing in the zones.

Though the absolute profit made on FMCG products is relatively small, they generally sell in large numbers and so the cumulative profit on such products can be large. Unlike some industries, such as automobiles, computers and airlines FMCG doesn't suffer from mass layoffs ever time the economy starts to dip. A person may put off buying a car but he Will not put off having his dinner.

Unlike other economy sectors, FMCG share float in a steady manner irrespective of global market dip, because they generally satisfy rather fundamental, as opposed to luxurious needs. The FMCG sector which is growing at a rate of 9% is the fourth largest sector in the Indian economy and is a worth of Rs. 93000 crores. The main contributor, making up 32% of the sector, is the south Indian region. It is predicted that in the year 2010, the FMCG sector will be worth Rs.143000 crores. The sector being one of the biggest sectors of the Indian economy provides upto 4 million jobs.

The FMCG sector consists of the following categories:

Personal care - Oral care, Hair care, Wash (soaps), Cosmetics and Toiletries, Deodorants and perfumes, Paper products (Tissues, Diapers, Sanitary products) and Shoe care; the major players being Hindustan Uni-liver Limited, Godrej Soaps, Colgate, Marico, Dabur and Procter & Gamble.

Household Care - Fabric wash (laundry soaps and detergents), Household cleaners (Dish/utensil/floor/toilet cleaners), Air fresheners, Inseticides and Mosquito repallants, Metal polish and Furniture polish; the major players being Hinduatn Uni-liver Limited, Nirma and Ricket Colman.

Branded and Packaged Foods and Beverages - Health beverages, Soft drinks, Staples/Cereals, Bakery products (Biscuits, Breads, cakes), Snack foods, Chocolates, Ice-creams, Tea, Coffee, Processed fruits, Processed vegetables, Processed Meat, Branded flour, Bottled water, Branded rice, Branded sugar, Juices; the major players being Hindustan Uni-liver Limited, Nestle, Coca-Cola, Cadbury, Pepsi and Dabur.

Spirits and Tobacco - The major players being ITC, Godfrey, Philips and UB.

Source : http://www.economywatch.com/world-industries/fmcg.html