The Fast-moving Consumer Goods (FMCG) sector is India's fourth-largest sector, with personal and home care accounting for 50% of India's consumer goods sales. Increased awareness, accessibility, and lifestyle changes are the main drivers of growth in this sector.
Urban areas (representing a revenue share of approximately 55%) are the largest contributors to the overall revenue generated by India's consumer goods sector.
However, in recent years, the consumer goods market has grown faster in rural India than in India's urban areas. Semi-urban and rural areas are growing rapidly, with consumer mass consumer goods accounting for 50% of total rural spending.
India's retail market is estimated to grow from $ 840 billion in 2017 to $ 1.1 trillion in 2020, with modern commerce expected to grow by 20-25% annually and for mass consumer goods companies. It can boost your income. Revenues in the FMCG sector have reached rupees. It is estimated to reach Rs 34,000 (the US $ 52.75 billion) in 2018 and US $ 103.7 billion in 2020. The consumer goods market is expected to grow by 9% to 10% in 2020.
Increased local consumption will boost the mass consumer goods market. It accounts for about 36% of total spending on mass consumer goods. In the third quarter of 2020 in rural India, various government initiatives (such as packaged goods and category hygiene) recorded a recovery of double-digit growth of 10.6% in the consumer goods sector. High agricultural production, reverse migration, and low unemployment.
Investment / development
The Government permits 100% of foreign direct investment (FDI) in food processing and single-brand retail and 51% in multi-brand retail. This will enhance employment, supply chain, and consumer goods brand awareness in the organized retail market, strengthen consumer spending and drive more product launches. The sector recorded a healthy FDI inflow of US $ 17.8 billion between April 2000 and September 2020.
Here are some of the recent developments in the consumer goods sector:
• In November 2020, in collaboration with Amazon India, NIVEA took a step towards greater sustainability through packaging by launching the first e-commerce ready-to-ship kit, the NIVEA CARE BOX. I did.
• In November 2020, Bahrain's Investcorp announced that it had invested in Indian logistics startup Xpressbees as part of a local and global investors group. Xpressbees has more than 1,000 clients in all sectors, including e-commerce, pharmaceuticals, consumer goods, retail, manufacturing, electronics, and consumer durables, and is located in more than 2,000 cities and towns in India. The amount of investment has not been disclosed.
Types of FMCG products
Home care
Cloth washing (laundry soap and synthetic detergent); household cleaner (plate / cookware)
Cleaners, floor cleaners, toilet bowl cleaners, air fresheners, pesticides, mosquito repellents, metal abrasives, furniture abrasives).
Healthy food and drinks;
• Alcohol-free drinks. Staple food / cereal;
• Beverage bakery products (cookies, bread, cakes). sandwich
• Food; Ice cream chocolate; Tea; Coffee; Gentle
• Beverages; fruits, processed vegetables; dairy products
• Products; Bottled water; Branded flour; Branded
• Rice; branded sugar; juice etc.
Personal care
• Oral care, hair care, skin care, personal washing
• (Soap); Cosmetics and toiletries; Deodorant;
• Perfume; Women's hygiene; Paper products.
Indian Government Initiatives
Some of the significant government initiatives taken to promote India's consumer goods sector are:
• On November 11, 2020, the Federal Council of Ministers held Production Linked Incentives (PLI) in 10 key sectors (including electronics and appliances) to boost India's manufacturing and export capacity and promote the initiative, Atmanirbhar Bharat. ) Approved the scheme.
The development of the packaged food sector will help raise farmers' prices and reduce high waste levels. To provide support through the PLI scheme, a unique product line has been established with high growth potential and the ability to create medium to large jobs.
• India's Government has approved 100% of FDI for cash and carries segments and single-brand retail and 51% FDI for multi-brand retail.
• The Government has drafted a new consumer protection bill focusing on creating a comprehensive mechanism to ensure the simple, fast, accessible, affordable, and timely delivery of justice.
• The Goods and Services Tax (GST) is beneficial to the consumer goods industry as many consumer goods products such as soap, toothpaste, and hair oil are now included in the 18% tax rate over the previous 23 tax rates. Twenty four%. In addition, GST for food and hygiene products has been reduced to 0-5% and 12-18%, respectively.
• GST is expected to transform logistics in the consumer goods sector into a modern and efficient model as all large companies are restructuring their operations into better logistics and warehousing.
The future of FMCG
Rural consumption increased due to a combination of increased income and higher levels of aspiration. Demand for branded products is growing in rural India. The Indian consumer goods local consumer goods market is expected to grow from $ 23.6 billion in 2018 to $ 220 billion in 2025.
Online portals are expected to play an essential role for businesses looking inside. The Internet has contributed significantly, providing a more economical and convenient way to extend a company's reach. It is estimated that 40% of all consumer goods consumption in India will occur online by 2020.
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