Perspectives from India

Aparna Dutt Sharma,Chief Executive Officer, IBEF

FMCG Sector in India Leveraging Brand Extension

Aparna Dutt Sharma, Chief Executive Officer, IBEF

The changing dynamics of the Indian market and the rising aspirations of middle class consumer have led fast moving consumer goods (FMCG) companies to make some changes in their global strategy to succeed in India. According to a recent study, the extensions of existing FMCG brands are five times more successful than launching a new brand in India. The result of the study show that the brand leaders that priced below the parent premium at the entry stage were more successful than those priced above the parent brand, which gives an interesting insight about the Indian consumer. Market experts are of the view that not only do brand extensions leverage the equity of the parent brand but they also lead to faster adoption and deliver higher marketing efficiency in the Indian market.

According to market estimates, India’s retail FMCG market could grow from the present US$ 10 billion valuation to US$ 100 billion by 2024-25. At present, FMCG is the fourth largest sector in the Indian market. Clearly, the strong dynamics of the Indian consumer market have attracted local and international FMCG companies consistently to pump in both, funds and efforts, to further penetrate the Indian market. With a lot of headroom to grow, the industry can be expected to continue to flourish in times to come.

Dec 032012

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