The global FMCG market is projected to reach $15,361.8 billion by 2025, registering a CAGR of 5.4% from 2018 to 2025. Fast Moving Consumer Goods (FMCG) otherwise known as consumer packaged goods are generally items that are purchased with ease due to low cost.These products are commonly accessible in varied outlets including grocery store,supermarkets and warehouses. The FMCG market has encountered sound development in the course of the most recent decade as a result of experience retailing alongside reflecting buyers want to improve their physical shopping knowledge with a social or relaxation experience.
The future for FMCG market is amazingly favorable because of its inherent capacity and promising advancements in the environment.
The global FMCG market is segmented based on distribution channel,product type and region.
Based on product type it is classified as food and beverages, personal care (skincare, cosmetics, hair care, others), healthcare care (over-the-counter drugs, vitamins & dietary supplements, oral care, feminine care, others), and home care.
The distribution channel segment comprises of supermarkets and hypermarkets, grocery stores, specialty stores, e-commerce and others.
By region, it is examined through North America, Europe, Asia-Pacific, and LAMEA.
Some of the major players of the global FMCG market are Unilever Group, The Coca-Cola Company, Pepsico, Inc., Kimberly-Clark Corporation, Patanjali Ayurved Ltd., Dr Pepper Snapple Group, Inc., Revlon, Inc., Johnson & Johnson (J&J), and Nestle S.A,Procter and Gamble.
Top 8 Factors Responsible To Drive The Growth Of Global FMCG Market
- Increase in population is directly proportional to the increase in consumption of the consumer goods.
- Frequent launches of new products drives the growth of the global FMCG market at an accelerating rate. For instance, Japan’s Kirin Brewery has launched products with regional provenance in their product portfolio by offering 47 varieties of its Ichiban Shibori beer, one for each of Japan’s 47 prefectures.
- Growing awareness in the consumers about FMCG products also plays a major role to drive the growth of the global FMCG market.
- Increase in the disposable income of middle-class population significantly drives the growth of the global FMCG market. Rising income increases the purchasing power thus increasing the purchasing of FMCG products.
- Making accessibility of consumer goods easier for common people through Business Process Outsourcing and Digital Marketing Platforms is also contributing in the growth of global FMCG market.
- Change in the lifestyle of the consumers in developed and developing countries is also predicted to drive the growth of the global FMCG market.
- In addition, effective advertisement of the brands to establish brand credibility is also responsible for the growth of the global FMCG market.
- A strong distribution channel of the FMCG industry is highly responsible to drive the growth of the global FMCG market
Four Major Growth Drivers For India’s FMCG Sector
The growth momentum in FMCG sector largely depends on its strong structural drivers like high population and rising affluence level, which are key factors contributing to growth of the sector.Here are the four major growth drivers.
Low penetration level of branded products in categories like instant food indicates a scope for volume growth.The Fast Moving Consumer Goods (FMCG) sector in rural and semi- urban India is estimated to cross US$ 100 billion by 2025 .Rural India accounts for more than 40% of consumption in major FMCG categories such as personal care, fabric care, and hot beverages. Growing penetration of smartphones and better internet connectivity in India has led to a burgeoning E-Commerce sector, which has, in turn, helped formalize large sections of the unorganized retail sector. The E-Commerce segment is forecasted to contribute 11% of overall Indian FMCG companies’ sales in 2030. The online FMCG market is projected to reach $ 45 bn in 2020.Online retail stores and online grocery stores like Flipkart, Amazon, Grofers have paved a well structured path towards making FMCG products readily available.Post GST and demonetization, modern trade share grew to 10% of the overall FMCG revenue as of August 2018.
Urban Vs Rural: Who Is The Major FMCG Player?
The FMCG industry in India is divided into the demographics of rural and urban India. The urban market contributes 55% of the consumption revenue of the FMCG market in India. In 2017, the urban sector recorded a market size of $ 29.4 billion. While urban areas have spearheaded the growth of the FMCG industry in India, semi-urban and rural segments are growing at a rate that cannot be ignored. Semi-urban and rural segments contribute over 45% of the overall revenues of the FMCG sector in India. FMCG companies in India have witnessed higher growth in rural areas compared to urban ones. And with 12.2% of the world’s population living in the villages of India, the Indian rural FMCG market cannot be ignored by investors. Dabur, one of the top FMCG companies in India, generates over 45% of its domestic revenue by the sale of packaged consumer goods in rural India. Hindustan Unilever, another name that has consistently dominated the list of top FMCG companies in India, earns over 35% of its revenue from rural areas. Rural India accounts for more than 40% of consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category- including skin care, household care, and feminine hygiene- will continue to grow at attractive rates. Within the food segment, it is projected that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas.
Online users who were 90 million in 2017 are estimated to rise to 200 million in 2020.Thus, the Online FMCG Market is forecasted to reach US$ 45 billion in 2020 from US$ 20 billion in 2017.
Favourable demand drivers such as rising income levels and growing urbanization, among others, have recently encouraged major and diverse investments in the FMCG sector. While top FMCG companies are expanding their capacity to feed the growing domestic demand, homegrown brands have ventured into international markets.