BlogJune 2, 2021by route2market0FMCG Industry

Fast moving consumer goods(FMCG) is the fourth largest industry in India. Household and personal care amounts to 50% of the whole FMCG sales. FMCG is a huge industry and divided into three categories, they are, food & beverages, healthcare products, and household and personal care products.

Urban sector is the largest contributor in this industry with 55% revenue share but in recent years semi-urban and rural sector is growing at a rapid rate. Packaged food industry is poised to reach US$70 billion by 2025. The revenue collected by FMCG in 2018 was at US$ 52.75 billion and in last quarter of 2020, the market grew by 7.1% mainly due to food products, hygiene, health, and rural areas.

Rural India saw double-digit growth at 10.6% in FMCG in the same period. Rural households spend almost 50% of their income on FMCG products providing a huge market to tap for the companies.

FMCG companies innovate regularly and quickly to meet the current trends and consumer preferences. FMCG companies in total launched more than 1800 products to suit the consumer’s preferences of healthy alternatives in the wake of COVID pandemic in first six months.

Growth Factors:

  • Rural household spending
  • Growing awareness of health,
  • Easier access,
  • Urbanization
  • Changing lifestyle
  • Young population
  • Online sales
  • Internet penetration
  • Increase in disposable income

Government Initiatives:

  • Government introduced PLI (Production-Linked Incentive) in 2020 to encourage manufacturing abilities, exports
  • FDI allowed- 51% in multi-retail brand and100% in single retail brand under automatic route
  • GST brought many items in lower tax slabs

 

From the above points, we can say that the FMCG industry is expanding at a high rate and has vast potential and firms are investing huge to tap the potential.

At Route2Market, we understand our client’s needs and requirements and provide custom clearance services, logistics management services, storage, warehousing, and distribution support. We help companies register their products in the food safety and standards authority of India (FSSAI), food packaging, and labelling guidelines. We provide a one-stop solution to all your requirements to enter the Indian market. We are optimizing the business resources with our expert knowledge.

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