Fast-Moving Consumer Goods (FMCG): A Complete Guide!

. 9 min read
Fast-Moving Consumer Goods (FMCG): A Complete Guide!

Table of Contents:

FMCG Full Form

FMCG Meaning

What is FMCG and India’s FMCG sector?

Types of FMCG

Top FMCG Companies in India

FMCG Products

FMCG Examples

FMCG Industry In India

What Is An FMCG Company And More.

  • The Indian economy is split into numerous branches across various sectors that ultimately contribute to generating capital.
  • In this article, the focus will remain upon a specific section of Consumer Goods.
  • That is, the FMCG or the Fast-moving Consumer Goods.

FMCG Full Form

  1. The full form of FMCG is Fast-moving Consumer Goods.
  2. Let us understand more about FMCG meaning and other FMCG Companies in India.

FMCG Meaning

  1. When one talks about the economy, the question of revenue and income appears before anything else.
  2. The economic standing of any country is linked to its revenue generation, and since we’re talking about the overarching economy, the sub-sectors under it all work towards generating capital.
  3. FMCG Products is one such sub-sector under the economic front.
  4. There are many other such sectors like:

Sectors In Indian Economy

Out of all these, the FMCG sector, also known as, the consumer-packaged goods (CPG) industry is the 4th largest sector in the Indian economy following-

  1. The Service Sector
  2. The Industrial Sector
  3. The Agricultural Sector

What is FMCG and India’s FMCG sector?

  • A consumer good, simplistically, is a final product that is purchased by the consumer.
  • How giant and widespread the consumer goods industry is, is realised when one absorbs common facts like 94% of people around the world recognise Coca-Cola's classic red
  • And the white coloured logo, or when one processes the fact that the DMart hypermarkets across India generated total revenue of Rs 19,916 Crores in the year 2019 with a staggering market value of 39,988 Crores.
  • FMCG or Fast-moving consumer goods, as the name itself suggests, are those types of goods that are consumed on a day to day basis and hence have a large supply and demand chain.
  • This FMCG sector has the responsibility of producing, distributing, and marketing goods so that their continuous consumption by the public takes place smoothly.
  • In the last 10 years, the revenue of FMCG in India has been growing at an impressive rate of 21.4%.
  • In 2018, India’s FMCG market growth was 14.8%, which was the fastest market growth recorded in the entirety of the Asia Pacific.
  • The chart depicting the Asia-Pacific FMCG market average growth had India on 1st place followed by:
    1. Vietnam
    2. Malaysia
    3. China
    4. New Zealand
    5. Thailand
    6. Japan
    7. Philippines, and other countries.

Types of FMCG

FMCG are those categories of industrial or non-industrial products that are heavily consumed and often sold at a lower retail price. These are often further categorised into three different sections:

  1. Durable goods,
  2. Non-durable goods, and services.
  • As is understood from the names, durable goods are those that have a shelf life of more than three years, for example, electronic goods, leisure appliances, etc.
  • While non-durable goods have a shelf life of less than one year from their date of manufacture, for example, food and beverages, over-the-counter drugs, etc.
  • Goods like detergents, toiletries, cosmetics, personal and overall hygiene products, are some of the FMCGs that dominate the Indian consumer markets today.

Top FMCG Companies in India

  1. Hindustan Unilever Limited (Rs 40,511 Cr),
  2. ITC Limited (Rs 51, 321 Cr),
  3. Dabur (Rs 8813 Cr),
  4. Nestle (Rs 12,117 Cr),
  5. Marico Limited (Rs 7465 Cr),
  6. Britannia Industry (Rs 11, 211 Cr),
  7. Godrej Consumer Products Limited (Rs 10,156 Cr),
  8. Procter & Gamble (P&G),
  9. Pepsico, &
  10. Coca-Cola

FMCG Products

  • Food products
  • Stationery
  • Personal Care Products
  • Naturally Concocted
  • Ayurvedic Consumer Products
  • Beauty Products
  • Mineral and Herbal Products
  • Baked food like- biscuits, bread, rusk, cakes, etc.
  • Dairy Products
  • Home Appliances
  • Security Products
  • Hair Care Products
  • Toiletries
  • Electrical Products

World’s Largest FMCG Companies

The top 10 most popular FMCG Companies in the world are-

  1. Nestlé
  2. Procter & Gamble
  3. PepsiCo
  4. Unilever
  5. AB InBev
  6. JBS
  7. Tyson Foods
  8. Coca-Cola
  9. L’Oréal
  10. Philip Morris

FMCG Marketing

In the Indian market, household and personal care products accounted for 50% of the sales in the FMCG industry followed by healthcare accounting for 31-32%, and finally, food and beverage accounting for the remaining 18-19%.

Even though FMCG are classified into three basic types of goods based on their shelf life, from a marketing approach, these fast-moving goods are of four types which are:
1. Convenience Products,
2. Shopping Products,
3. Specialty Products, and
4. Unsought Products.

The table below will help in understanding the characteristics of each type.

How Can I Join The FMCG Industry?

  • If you've ever wondered Is FMCG a good career, then below are some of the job roles you'll see in FMCG companies in India-
  1. Sales Manager
  2. Stock Control Manager
  3. Procurement Analyst

FMCG Examples

1. Convenience Products

  1. Since these products are bifurcated in terms of their marketing abilities, the consumption of these goods displays varied consumer purchasing behaviour.
  2. For example, the convenience products that are easily available at all retail spaces are bought more frequently and do not require the consumer to make an informed, well-thought decision before buying it.
  3. Examples of the same are listed above.

2. Specialty Products

  1. On the other hand, Specialty products are those kinds that are not consumed regularly.
  2. Rather, they cannot be purchased regularly because of their brand and characteristics.
  3. This category comprises products like cars and other motor vehicles, designer clothes, expensive jewellery, and the like.
  4. The purchasing behaviour is observed when it is noticed that for obvious reasons, the Convenience products will have a much larger selling and demand index than the Specialty category of products.

FMCG India

  • The majority of India’s population makes up for the middle-class section of society.
  • Understandably, the demand for Convenience products will be exponentially more significant than the demand asserted for Specialty products.
  • This is dependent on various factors like low price, extensive and widespread distribution, availability, accessibility, requirement, etc.

FMCG Marketing Strategy

In India, some of the best marketing strategies that are adopted by leading brands for sale of products are-
1. Multi-branding, Flanking, i.e. selling the same product with different packaging,
2. Extension of the brand,
3. Developing new products, &
4. Evolution and adaptation.

Challenges faced and overcome/yet to overcome for the FMCG Industry in India:

  • India’s financial year starts in April and ends in March.
  • The above graph is the indication of the value growth of the FMCG sector in India from the 1st quarter financial year 2019 (Q1 FY 2019) to the 3rd quarter financial year 2020 (Q3 FY 2020).
  • As is visible from the details in the graph, the 3rd quarter of the financial year 2020 recorded the lowest growth of the FMCG sector compared to the last six quarters.
  • After the value growth of FMCG skyrocketed in Q2 FY 2019 to 16.2, a steady decline was observed, which resulted in the growth being valued at a mere 6.6% in Q3 FY 2020.

FMCG India After COVID-19

  • Whether one likes it or not, it is very much evident that the slope of decline is very steep.
  • The factors that led to this are multiple.
  • Reasons like the falling GDP of the country, the rising inflation, insufficient rural demand, are some of the many reasons that have contributed to the decline in the percentage of the growth of the Indian FMCG sector.
  • With the ongoing pandemic taking its toll on the economies all over the world, no less India, the growth rate can be expected to plummet even further.
  • Given the current scenario of the world, such a turn of events is bound to happen sooner or later.
  • In this case, the FMCG sector in India will suffer a huge loss of revenue.

FMCG Industry In India

  • The presence of the FMCG products is across all areas of the countries.
  • The distribution of FMCG is not only limited to urban spaces.
  • Even though the urban market contributes about 55% of the consumption revenue of the Indian FMCG sector, the rural area's standing is not far behind.
  • With a growth rate of 14.6%, the semi-urban and the rural FMCG markets gain about 45% of the overall revenues.
  • As 12.2% of the Indian population occupies rural areas, the investors are keenly observing the rise in rural consumption.
  • It is predicted that rural markets will grow slightly more than urban markets this year and will experience a growth rate of 4-5%.

FMCG Business Scope

  1. The FMCG market is expected to grow by 9-10% in the financial year 2020.
  2. It is also estimated that by 2020, 40% of the FMCG market will be operated online.
  3. The consumption habits, especially of the young demographic situated in the urban spaces, will have a massive impact on the FMCG sector of the economy.
  4. With shifting habits and changing lifestyle, it is predicted that there will emerge new product categories even within the FMCG sector, which shall satisfy the demand of the new consumer living in the new world.

Key Takeaways

  • FMCG profits margins and FMCG stocks vary according to the season and market deployments.
  • FMCG meaning doesn't conclude with Indian consumer products but also includes the import-export market.
  • FMCG products are generally non-durable and hence, sold at relatively lower costs.
  • Over-the-counter drugs are also considered a part of FMDB.
  • FMCG sales in India comprises over 50% market.

Also read:

  1. Digitalisation in Business – How it Changed the Buyer-Seller Equation?
  2. How to Research About Local Markets?
  3. Non-Biodegradable Waste: A Looming Problem For All Of Us
  4. The impact of Covid-19 on Small Businesses. How bad this has been
  5. Food Business in India: Types of Food Business You Can Do & More

FAQs

Q. What is the full form of FMCG?

A. The full form of FMCG is Fast-Moving Consumer Goods.

Q. What is a FMCG company?

  • The FMCG full form is fast-moving consumer goods.
  • While an FMCG Company is an organisation that produces or manufactures these goods.
  • These are generally non-durable and priced affordably.

Q. Is McDonald's FMCG?

  1. Yes, McDonald's is a globally recognised FMCG brand.
  2. It has served over 70 million customers worldwide.
  3. It's spread across 119 countries and holds over 35,000 outlets.

Q. What are the 4 types of consumer goods?

Ans- Consumer goods can be categorised into 4 types namely-

  • Specialty
  • Shopping
  • Convenience
  • Unsought goods

Q. Which is the biggest FMCG company in the world?

Ans- Nestle (Switzerland) is the biggest FMCG company in the world with turnover in billions.

Q. Why FMCG sector is growing?

Ans- Some the reasons for the growth of the FMCG sector are-

  1. Increase in awareness
  2. Consumption need increment
  3. Raise in demand
  4. Easy Accessibility
  5. Lifestyle changes

Q. How big is the FMCG industry?

  • The estimated value of India's FMCG market was calculated at a whopping amount of 52.75 billion American Dollars.
  • The major reason being an increase in consumption of the rural crowds of the country.

Q. Is FMCG sales a good career?

  1. Yes, it is one of the fastest-growing industries in India, hence, providing incredible opportunities.
  2. It will also give you a chance to be associated with billion-dollar brands that would enhance your resume.
  3. Exposure on a global level could open doors for professionals interested in traveling cross-country.
  4. Job security is higher than other basic or generic corporations.

Q. What comes under FMCG products?

Ans- These are some of the mandatory FMCG products available widely across the country-

  • Beverages
  • Processed Foods
  • Dry Goods
  • Prepared Foods/Meals
  • Toiletries
  • Cosmetics
  • Over-the-counter medications
  • Chocolates/Candy
  • Fruits and Vegetables
  • Frozen or Processed foods
  • Electronics
  • Baked Goods
  • Stationery & Office Supplies
  • Cleaning products
  • Clothing items

Q. What are the 4 channels of distribution?

A. There are 4 types of distribution channels in India which are-

  1. Direct Sale
  2. Sale Through Retailer
  3. Wholesalers
  4. Sale via Agents

Q. What is FMCG Industry in India?

A. The Fast Moving Consumer Goods Industry in India is the 4th largest sector of the country’s economy. Read the article to understand its components.

Q. Things to know before exploring a career in the Consumer Goods industry/FMCG industry?

  • The consumer goods sector is an exciting avenue if you’re looking for challenges.
  • While it is a prerequisite, please note that your degree is not the only thing that will guarantee you a job in this sector.
  • Other skills that one ought to possess are being a good listener, having managerial qualities, willingness to learn, etc.
  • Jobs in the FMCG require you to be a graduate.
  • This may get you a job either in the product processing department or the retail and marketing department.
  • It will be helpful if you’re an engineer with a background in product design, merchandising, management, etc.
  • Besides, Business graduates are mostly sought by the leading FMCG companies like Cadbury India, Hindustan Unilever Limited, Britannia Industries, and others.

Q. Which Fast-moving Consumer Goods in India are safe and secure to purchase and consume during the pandemic?

A. Based on the desirability scores, any and all products from the following companies are safe for consumption:

1. Unilever

2. Procter & Gamble

3. Nestle

4. ITC

5. Amul

Q. Should I invest in the Indian FMCG sector?

  • Absolutely.
  • Research has also suggested that investment in this sector proves to be extremely profitable as FMCG products have a steady demand throughout the year.
  • The FMCG sector witnessed a massive FDI influx of US 16.28 billion Dollars during April 2000-March 2020.