Consumer Goods (FMCG) in India

The fast-moving consumer goods (FMCG) sector is the fourth largest sector in India and has been growing at a healthy pace over the years due to rising disposable income, a growing young population and increasing consumer brand awareness. With household and personal care accounting for 50% of FMCG sales in India, the sector is a major contributor to India's GDP.

India is a country that no FMCG player can ignore due to its rapidly growing middle class, which is larger than the total population of the US. With an average age of just 27, India's population is increasingly focusing on convenience products, both in food and beverage and consumer electronics. Young Indians are highly interested in European brands, smart tech gadgets and international food trends.

Growing awareness, higher income and changing lifestyles are therefore the key growth drivers for the sector. The urban segment (accounting for a revenue share of about 55%) is the largest contributor to the total revenue of the FMCG sector in India. However, in recent years, the FMCG market in rural India has been growing faster than in urban areas. The semi-urban and rural segments are growing at a rapid pace and FMCG products account for 50% of total spending in rural areas.

Market statistics on India's consumer goods sector

The fast-moving consumer goods (FMCG) sector is the fourth largest sector of the Indian economy.
FMCG products dominating the Indian market are detergents, toiletries, dental cleaners, cosmetics, etc.
The FMCG sector in India also includes pharmaceuticals, consumer electronics, packaged foods, soft drinks and chocolate.

India's fast-moving consumer goods (FMCG) market is expected to grow in value from $23.6 billion in 2018 to $220 billion by 2025.
E-commerce purchases are expected to contribute 11% of total FMCG sales by 2030.
India's consumer electronics manufacturing sector is expected to be worth about $300 billion by 2024/2025.
India's packaged food market is expected to double to $70 billion by 2025.
The toy industry in India has the potential to reach $2 billion to $3 billion by 2024.

Covid-19 impact

The long lockdowns in India dropped consumer confidence in India in 2020 and the sector initially took a hard hit as a result. But this sentiment quickly turned around and has created lasting change. For example, the number of Indian consumers who enjoy shopping online has increased exponentially and an omni-channel approach is essential for businesses. At the same time, the demand for foods with organic and natural ingredients has continued to grow.

Growth drivers of India's consumer goods sector

The government is allowing 100% foreign direct investment (FDI) in food processing and retail. This should boost consumer spending and ensure that more FMCG products are launched.
The rapid expansion of the number of internet users in rural areas and the access this provides to e-commerce platforms will boost demand and growth in consumer goods.
Currently, there is already an increased demand for branded products in rural India.
The sector has a huge untapped market for appliances like air conditioners (AC), washing machines, refrigerators.
A major factor driving the demand for convenience foods and dishes in India is the growing young population, especially in urban areas, who hardly have time to cook due to lack of time.