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Research report::Indian FMCG Industry
July 30, 2013
OVERVIEW
.
With a population of over one billion, India is one of the largest economies in the world in terms of purchasing power and increasing consumer spending, next to
China. The Indian FMCG industry, with an estimated market size of ~`2 trillion, accounts for the fourth largest sector in India. In the last decade, the FMCG sector has grown at an average of 11% a year; in the last five years, annual growth accelerated at compounded rate of ~17.3%. The sector is characterized by strong presence of global businesses, intense competition between organized and unorganized players, well established distribution network and low operational cost.
Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage. During 2012, the country witnessed high inflation, muted salary hikes and slowing economic growth, which affected the
FMCG sector with companies posting deceleration in volume growth in their quarterly results. However, the trend seen in 2012 is likely to accelerate in 2013 as growth will come from rural dwellers that are expected to see a rise in their disposable incomes.
Fast Facts: Indian FMCG Industry
The Indian FMCG industry represents nearly 2.5% of the country’s GDP.
The industry has tripled in size in past 10 years and has grown at ~17%CAGR in the last 5 years driven by rising income levels, increasing urbanisation, strong rural demand and favourable demographic trends.
The sector accounted for 1.9% of the nation’s total FDI inflows in April 2000- September 2012. Cumulative FDI inflows into
India from April 2000 to April 2013 in the food processing sector stood at `9,000.3 crore, accounting for 0.96% of overall FDI inflows while the soaps, cosmetics and toiletries, accounting for 0.32% of overall FDI at `3,115.5 crore.
Food products and personal care together make up two-third of the sector’s
July 30, 2013
OVERVIEW
.
With a population of over one billion, India is one of the largest economies in the world in terms of purchasing power and increasing consumer spending, next to
China. The Indian FMCG industry, with an estimated market size of ~`2 trillion, accounts for the fourth largest sector in India. In the last decade, the FMCG sector has grown at an average of 11% a year; in the last five years, annual growth accelerated at compounded rate of ~17.3%. The sector is characterized by strong presence of global businesses, intense competition between organized and unorganized players, well established distribution network and low operational cost.
Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage. During 2012, the country witnessed high inflation, muted salary hikes and slowing economic growth, which affected the
FMCG sector with companies posting deceleration in volume growth in their quarterly results. However, the trend seen in 2012 is likely to accelerate in 2013 as growth will come from rural dwellers that are expected to see a rise in their disposable incomes.
Fast Facts: Indian FMCG Industry
The Indian FMCG industry represents nearly 2.5% of the country’s GDP.
The industry has tripled in size in past 10 years and has grown at ~17%CAGR in the last 5 years driven by rising income levels, increasing urbanisation, strong rural demand and favourable demographic trends.
The sector accounted for 1.9% of the nation’s total FDI inflows in April 2000- September 2012. Cumulative FDI inflows into
India from April 2000 to April 2013 in the food processing sector stood at `9,000.3 crore, accounting for 0.96% of overall FDI inflows while the soaps, cosmetics and toiletries, accounting for 0.32% of overall FDI at `3,115.5 crore.
Food products and personal care together make up two-third of the sector’s