The Indian Fast Moving Consumer Goods (FMCG) sector is the fourth largest in the Indian economy and has a market size of $13.1 billion. This industry primarily includes the production, distribution and marketing of consumer packaged goods, that is those categories of products which are consumed at regular intervals, sold quickly and at a relatively low cost. These products can be described as food and beverage, personal care, pharmaceuticals, plastic goods, paper, stationery and household products. This sector is highly competitive between organized and unorganized segments. The established distribution networks encourages the competitive nature of this consumer goods sector and is necessary to keep the supply of the FMCG available in the marketplace.
The FMCG provides a promising growth market for the middle class and the rural segments of the Indian population. By offering the FMCG products to the middle class and rural segments it offers brand makers the opportunity to convert them to branded products.
India is Asia’s third largest economy,as a result of high inflation and low or muted salary hikes urban consumers spent less in the 2012 calendar year. This slowdown in the economy affected the FMCG sector with companies posting deceleration in volume growth in the recent quarterly results. Discretionary spending has been hit severely due to the ongoing slowdown. The prevailing high inflation level is also a cause of concern for the sector. The trends seen in 2012 accelerated in 2013. Growth is expected to come from rural dwellers that are expected to see a rise in disposable incomes due to the direct cash transfer scheme, while urban consumers will continue to be affected by the macroeconomic environment.
IS Advisors offers insight into the economic climate in India providing an understanding of the prevailing affects on FMCG and consumer groups which utilize the products. The report provides useful and comprehensive information about the industry expectations from the budget, proposed measures in the budget and their impact on industry and its players.
SCOPE OF THE REPORT
- List of key Budget expectations
- Analysis of the various budget provisions affecting the industry
- Summarize impact on key players of the industry