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Fast Moving Consumer Goods: Jul 2010

July, 2010

The Indian fast moving consumer goods (FMCG) sector, with a market size of US$ 25 billion (2007–08 retail sales), constitutes 2.15 per cent of India's gross domestic product (GDP). India is recognised as a cost-effective quality manufacturing base in the world market. Food products is the largest consumption category in India, accounting for nearly 21 per cent of the country’s GDP.

The industry is poised to grow between 10 to 12 per cent annually. The Indian retail market size is estimated at US$ 350.2 billion and is projected to grow at 13 per cent per annum to reach US$ 590 billion by 2011–12. The current share of organised retail is estimated to be 4 to 5 per cent and is expected to increase by 14 to18 per cent by 2015.

A well-established distribution network spread across six million retail outlets (including two million in 5,160 towns and four million in 627,000 villages) low penetration levels, low operating costs and intense competition between the organised and unorganised segments are key characteristics of this sector. PepsiCo India's beverage business, Hindustan Unilever Limited, ITC and Dabur India are key players in India.

Rural India accounts for close to one-third of the total consumption pie. Robust consumption in the rural economy is one of the key drivers of India's sustained growth. FMCG companies such as—ITC with e-Choupal services—are devising exclusive rural marketing strategies to tap the rural consumer base.

Sectoral Presentation (April 2010)

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