Happy days are here again backed by the growing disposable incomes and rising consumerism. "Over the next 10 years, India's per capita income is likely to double, with opportunities to catalyze penetration, increase usage, and upgrade consumers. As a result, the FMCG market is expected to grow to over Rs. 1,00,000 cr from its current base of Rs. 40,000 cr."
The Fast Moving Consumer Goods (FMCG) sector was under tremendous pressure for more than a couple of years due to intense competition and economic downtrend. The sector went through a rough phase with poor monsoons, declining profits, and severe price cuts.
However, now the sector is on the resilient mode, supported by strong economic fundamentals. These include growing urbanization, rising demand, and good monsoons followed by various tax benefits. Other than effective distribution and product innovation, affordability and value of products at the micro level as well as the increasing consumer confidence at the macro level have been some of the key reasons for splendid growth.
In the recent past, the sector has witnessed greater penetration with the introduction of sachets or the low unit price strategy. For the first time in several quarters, the sector is set to register double-digit growth in the quarter ended June 2005. Its majors have recorded a substantial year-on-year growth in terms of sales and profits. |
