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FMCG Sector's GDP Impact in India

The fast moving consumer goods (FMCG) sector is the fourth largest sector in the Indian economy. It includes consumable items that are regularly purchased like detergents, toothpaste, shampoo, and packaged food. The FMCG sector contributed $52.75 billion to the economy in 2018 and is estimated to reach $103.7 billion by 2020. Food products account for 43% of the FMCG market, with personal care at 22% and fabric care at 12%. The market size of FMCG in India grew from $30 billion in 2011 to $74 billion in 2018 and is forecasted to further expand to $100 billion by 2025.

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85 views2 pages

FMCG Sector's GDP Impact in India

The fast moving consumer goods (FMCG) sector is the fourth largest sector in the Indian economy. It includes consumable items that are regularly purchased like detergents, toothpaste, shampoo, and packaged food. The FMCG sector contributed $52.75 billion to the economy in 2018 and is estimated to reach $103.7 billion by 2020. Food products account for 43% of the FMCG market, with personal care at 22% and fabric care at 12%. The market size of FMCG in India grew from $30 billion in 2011 to $74 billion in 2018 and is forecasted to further expand to $100 billion by 2025.

Uploaded by

Shilpi Sah
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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A.

SECTOR INFORMATION

1. INTRODUCTION
The fast moving consumer goods, which are popularly known as consumer packaged
goods, is the fourth largest sector in the Indian economy.

Items in this category includes all consumables people buy at regular intervals.
The most common examples of FMCG goods are detergents, toothpastes, shampoos,
packaged foodstuff, household accessories e.t.c.
Growing awareness, easier access, and changing lifestyles have been the key growth
drivers for the sector.

2. INDUSTRY SIZE/ CONTRIBUTION TO GDP


The FMCG sector is one of the largest sectors of the Indian economy. According to
an FMCG industry overview, revenues of the FMCG sector reached $ 52.75 bn in
FY18, and are estimated to reach $ 103.7 bn in 2020.
In FY18, FMCG's rural segment contributed an estimated 10 per cent of the total
income and it is forecasted to contribute 15-16 per cent in FY 19. As consumption in
India grows at an unprecedented rate, the FMCG industry remains a key sector for
investors.
FMCG sector is forecasted to grow at 12-13 per cent between April–June 2019. It is
estimated that 40 per cent of all FMCG consumption in India will be online by 2020.
While top FMCG companies are expanding their capacity to feed the growing
domestic demand, homegrown brands have ventured into international markets. Some
of these include:
a. Patanjali- Their success has encouraged the brand to look at the international
stage, with plans to set up a 100% export-oriented manufacturing unit in Milan
SEZ, Nagpur
b. RP-Sanjiv Goenka Group- They have created a venture capital fund of $ 14.74 mn
to invest in FMCG startups. This move was made taking into account the capital
appreciation in the FMCG sector

3. MARKET SIZE
The market size of FMCG in India is estimated to grow from US$ 30 billion in
2011 to US$ 74 billion in 2018. Food products is the leading segment, accounting for
43 per cent of the overall market. Personal care (22 per cent) and fabric care (12 per
cent) come next in terms of market share.

The Indian Fast Moving Consumer Goods (FMCG) industry began to shape during
the last fifty odd years. The growth of FMCG industry was not significant between
1950’s to the 80’s. The FMCG industry previously was not attractive from investor’s
point of view due to low purchasing power and the government’s favoring of the
small-scale sector. FMCG’s growth story further continued following the
deregulation of Indian economy in early 1990s. With relatively lesser capital and
technological requirements, a number of new brands emerged domestically as well,
while the relaxed FDI conditions led to entry of many global players in this segment.
These factors made FMCG market in India highly competitive and one of the
important contributor in the Indian economy. In the mid - nineties, the growth of the
sector was very fast where as it declined rapidly at the end of the decade.
The initial growth was due to increase in product penetration and consumption levels.
Riding on a rapidly growing economy, increasing per-capita incomes, and rising trend
of urbanization, the FMCG market in India is expected to further expand to $100
billion by 2025.

4.

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