Indian consumers to spend more on FMCGs in a decade
Updated: Jun 12, 2013 02:54:15pm
New Delhi, Jun 12 (KNN) Indian consumers will be spending more while purchasing fast-moving consumer goods (FMCG) in a decade’s time according to a report by CII and Boston Consulting Group.
“Consumption in India is expected to rise from USD 900 billion to USD 3600 billion in the coming decade presenting an unparalleled opportunity for FMCG and retail companies,” said the report.
Having grown at a rate of 25 per cent annually since 2008, the retail sector has shown huge growth potential for growth.
The report has been quick to point out that both FMCG and retail are suffering owing to poor supply chain structure, changing consumer preferences, challenging macro-economic outlook and increasing competition in order to see sustained growth. With the future uncertain, both sector needs to prepare for a volatile operating environment.
Further, the increasing choice of products in both the sectors have made consumers more demanding, especially as they have speedy access to information.
“Volatility in commodity prices and emergence of new competitors have squeezed margins forcing most players to cut cost in order to protect earnings,” said the report.
CII and BCG also conducted a survey according to which 54 per cent of respondents believe volatility of prices in raw materials will remain a challenge for the industry while 50 per cent polled expect challenges due to rising competition over the next five years.
The report touched upon Indian economy, saying that achieving growth rate of seven per cent remains uncertain. At the same time investment rating agencies like S&P and Moody have downgraded the investment prospect of the country raising heightened concern which could be unfounded.
Further it said that global outlook was very uncertain. The geopolitical situation remains in a tight spot with change of guard in China and post Arab spring.
The global economy is still recovering from post Lehman crisis but Euro zone remains stable.
While food items, personal care items, cleaning and laundry products and medicines make up a large bulk of the goods in the FMCG arena, paper, printing, stationery and plastic products, consumer electronics, alcoholic drinks, tobacco and cigarettes can also be considered fast moving consumer goods. (KNN)
“Consumption in India is expected to rise from USD 900 billion to USD 3600 billion in the coming decade presenting an unparalleled opportunity for FMCG and retail companies,” said the report.
Having grown at a rate of 25 per cent annually since 2008, the retail sector has shown huge growth potential for growth.
The report has been quick to point out that both FMCG and retail are suffering owing to poor supply chain structure, changing consumer preferences, challenging macro-economic outlook and increasing competition in order to see sustained growth. With the future uncertain, both sector needs to prepare for a volatile operating environment.
Further, the increasing choice of products in both the sectors have made consumers more demanding, especially as they have speedy access to information.
“Volatility in commodity prices and emergence of new competitors have squeezed margins forcing most players to cut cost in order to protect earnings,” said the report.
CII and BCG also conducted a survey according to which 54 per cent of respondents believe volatility of prices in raw materials will remain a challenge for the industry while 50 per cent polled expect challenges due to rising competition over the next five years.
The report touched upon Indian economy, saying that achieving growth rate of seven per cent remains uncertain. At the same time investment rating agencies like S&P and Moody have downgraded the investment prospect of the country raising heightened concern which could be unfounded.
Further it said that global outlook was very uncertain. The geopolitical situation remains in a tight spot with change of guard in China and post Arab spring.
The global economy is still recovering from post Lehman crisis but Euro zone remains stable.
While food items, personal care items, cleaning and laundry products and medicines make up a large bulk of the goods in the FMCG arena, paper, printing, stationery and plastic products, consumer electronics, alcoholic drinks, tobacco and cigarettes can also be considered fast moving consumer goods. (KNN)
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