FMCG (Fast-moving Consumer Goods)
Sector Analysis
• FMCG sector is the 4th largest sector in India, contributing nearly 20% to the GDP (Gross Domestic Product).
• FMCG sector is the single largest employer in the country, with more than a 7.3 Mn workforce.
• According to CII (Confederation of Indian Industry) and BCG (Boston Consulting Group), the industry is expected to grow at a 14% CAGR to reach USD 220-240 Bn by 2025 from USD 110 Bn in 2020, growth would be driven by 70% increase in income levels, 100 Mn youth entering the workforce & 35% of Indians living in urban centers.
• Rising digital connectivity in cities and rural areas is driving the demand for FMCG through e-commerce portals. The E-commerce segment is expected to contribute 11% to the overall FMCG sales by 2030.
• In October FY22, P&G (Procter & Gamble) announced an investment of USD 66.8 Mn in rural India.
• FMCG sector recorded an FDI of USD 18.59 Bn between April 2020 and June 2021.
• Initiatives undertaken by the government of India to increase the disposable income of the commoner, especially from rural areas, will be beneficial for the sector.
• The Indian processed food market is projected to expand to USD 470 Bn by 2025, up from USD 263 Bn in 2019-20.
• FMCG sector grew by 36.9% in Q1FY22 despite lockdowns in various parts of the country.
• The domestic FMCG market increased 36.9% YoY in Q1FY22.
• Companies with dedicated websites recorded an 88% YoY rise in consumer demand in 2020. Since then, more businesses have begun to adopt the D2C model, and India is now home to more than 800 D2C brands looking at a USD 101 Bn opportunity by 2025.
• Online portals are expected to play a vital role in the growth of the FMCG sector. The Internet has contributed in a big way, facilitating a cheaper and more convenient mode to increase a company’s reach. India’s number of internet users will likely reach 1 Bn by 2025.