Fast-moving consumer goods (FMCG) sell quickly and for a low price. They are also called consumer packaged goods (CPG). Some examples are packaged foods, drinks, toiletries, candies, cosmetics, over-the-counter drugs, dry goods, and other things that can be used up quickly.
Consumer goods that sell quickly have a high inventory turnover rate. This is different from specialty items, which sell less and have higher carrying costs. Many stores, like hypermarkets, big box stores, and warehouse club stores, only sell FMCGs. Small convenience stores also sell things that sell quickly because they only have a few shelves and need to fill them with things that move quickly.
From the point of view of the customer
- Frequent purchases made
- Low engagement (hardly requires any effort to choose the item)
- Cheap prices
- Short time to use
- Rapid consumption
From a marketer’s point of view
- A lot of them
- Low margins of profit
- Extensive distribution
- The high number of items sold
- Rural consumers
Most of the goods that people in rural areas buy come from nearby towns and villages. Recent changes in the way people buy have made them more likely to buy locally. This means that small towns need better local marketing to make people aware of brands. FMCGs are important to the economy because they are hard to change and affect every part of a person’s life.
Businesses that sell fast-moving consumer goods (FMCGs) to rural areas can help create jobs and bring down the prices of these goods in rural areas. For example, FMCGs are the fourth-largest sector of the Indian economy and provide jobs for more than three million people in activities that happen further down the supply chain.
In India, the FMCG industry’s income has grown at a rate of 21.4% per year over the past 10 years. There was a significant change in the FMCG sector’s income, which went from US$ 31.6 billion in 2011 to US$ 52.8 billion in 2017-2018. The FMCG industry in India is likely to grow by 27.9% CAGR and reach US$103.7 billion by 2020. Also, the rural FMCG market is expected to grow at a compound annual growth rate (CAGR) of 14.6% and reach $100 billion by 2020 and $220 billion by 2025.
The rural setting brings in 45 per cent of the total revenue of the FMCG industry, while the urban environment brings in 55 per cent of the total revenue. More than 65% of people in India live in rural areas, and these people spend about 50% of their total income on fast-moving consumer goods (FMCG). By 2025, it is expected that 850 million people in India will buy consumer goods online.
People have used the research online, buy offline (ROPO) method ever since the internet became popular. Because of this, FMCG companies have put in better machines to make better products and cut their profit margins to be on par with their competitors.
The push for marketing and research
Indian customers are less likely to stay loyal to a brand because they want to get the best deals possible. So, FMCG companies are always trying to get customers to buy their products with discounts and promotions. Many companies offer combo deals to get people to buy their products.
Low use of capital
Most companies in the FMCG industry don’t need a lot of money to invest in factories, machinery, equipment, and other fixed assets.
At a fully upgraded manufacturing plant, the amount of money made is usually five to eight times what was put in. Companies have low capital intensity because most business transactions are still done with credit or cash.
High cost to start up
In the US, a few big companies control the FMCG industry, but in India, the industry is made up of many small businesses. As competition increases, it’s getting harder for companies to get a more significant share of the market. Promotions and ads, cost of product development, testing market compatibility, market research, and most of all, the launch of the product to get people to know about it, all require a lot of money upfront.
Natural goods are becoming more popular.
The high-end of the market is moving toward natural products, which are made from ingredients that come from nature.
Evolution
From 1950 to 1980, there wasn’t a lot of money put into the FMCG sector. People in the area had less money to spend, so they bought things they needed instead of things they wanted. The Indian government tended to favor shops and retailers in their own country. From 1980 to 1990, people wanted a more comprehensive range of products, which led FMCG companies to make more products available.
The FMCG industry started to grow, and more companies joined it. During the same time, there was a boom in the media industry in India, which gave new businesses even more reason to make their businesses profitable. Before globalization and liberalization happened in India in 1991, local people couldn’t buy western clothes or food from other countries. People, in general, didn’t know much about brand recognition. After 1991, the FMCG industry was influenced by international companies. The government also stepped in to give FMCG companies from other countries reasons to work in India.
There are a lot of jobs in the Indian FMCG industry, which currently employs more than 3 million people.
People buy the things they need to get through the day at department stores, grocery stores, and supermarkets. don’t want to go to different stores to get everyday household items in the 21st century. So, the opening of supermarkets in the area, where customers can choose from a wide range of household goods, is proving to be very convenient for the customers. Reliance Retail, Big Bazaar, D-Mart, Easy day, MORE, Spencer’s, Spar, HyperCity, and Star Bazaar are some of the most common stores in India.
Even though supermarkets make money, local grocery stores are struggling because they don’t have enough products. In India, the FMCG industry is still pretty traditional, which is different from other places where the industry is growing. Even though street markets are one of the most popular places to shop in both cities and small towns, the best way to buy FMCG products is through online platforms.
India is most likely the biggest market for FMCG business in the world. More than 100 million people depend on FMCG companies to meet their daily needs. Let’s talk about India’s top 10 FMCG companies, based on how valuable their brands are and how much money they make.
What Are 3 Types of Consumer Goods?
The three main consumer goods categories include both goods that last a long time and ones that don’t. Three years is how long things like furniture and cars last. Economists often look at how much money people spend on durable goods to see how healthy the economy is. Goods that don’t last long have a shelf life of less than a year and are used up quickly. This group includes goods that people buy and use quickly. Lastly, services can include things that can’t be seen or touched, like haircuts or car washes.
What are some of the biggest consumer goods companies that move quickly?
Nestlé, Procter & Gamble, and Coca-Cola are three of the world’s biggest companies that make and sell goods that people use every day. Nestlé, based in Switzerland, has over 2,000 brands that range from vitamins to frozen foods. Importantly, there is a lot of competition for market share in the fast-moving consumer goods business. As a result, companies put a lot of effort into the packaging to attract customers and keep the product safe and extend its shelf life.
What are FMCG companies?
FMCG stands for goods that sell quickly. Most people use these kinds of products every day, and they are usually sold at prices that are easy for most people to pay. The most popular FMCG products are processed food, personal hygiene products, home care products, grocery items, beverages, and over-the-counter medicines like aspirin, fruits, vegetables, electronic gadgets, etc.
List of India’s top 10 FMCG companies.
1. Hindustan Unilever (HUL)
On the list of Indian FMCG brands, we put Hindustan Unilever Limited at the top. The products of this company are used by more than 2 billion people every day.
The company has a wide variety of products like food and drinks, personal care, home care, and water purification. The company has more than 35 well-known brands, such as Dove, Knorr, Lifebuoy, Ponds, Lakme, Surf Excel, Elle18, Broke Bond, Kwality, Sunlight, etc.
The main office is in Mumbai, Maharashtra.
Turnover: 4.0 Billion Dollar
16000 or more workers.
2. Colgate-Palmolive
This is an American company that sells consumer goods all over the world. Colgate toothpaste is the most popular and successful product made by the company. In addition, the company sells soap, detergent, and things to clean your mouth.
The company has been around for a very long time and has a good name in the global FMCG industry. The business has done everything it needs to do to be a great and successful business in its field.
The main office is in New York, USA.
Turnover: 17,08 billion dollars
Workers: 37,000 or more.
3. ITC Limited
India Tobacco Company is what ITC stands for. In addition to selling fast-moving consumer goods, the company also works in the hospitality, paper, packaging, agribusiness, and information technology (IT) industries.
The company has a wide range of products in the FMCG market. Food, personal care, cigarettes and cigars, branded clothing, education and stationery products, incense sticks, and safety matches are all on the list. Ashirvaad atta, Bingo chips, Savlon, Mangaldeep Agarbatti, Wills, Fiama, Vivel, and other brands are some of the most well-known.
Office: Kolkata, West Bengal. Seven billion dollars in sales
Turnover: 7.0 Billion Dollar
Workers: 29,000 and up.
4. Nestle
Nestle is a Swiss company since it is based in Switzerland. Nestle is now one of the biggest food companies in the world. The company has been around in the business of making and selling food for more than 140 years.
The company sells many different kinds of products in other markets. The company’s main business areas are milk products and nutrition, beverages, ready-made meals and cooking aids, chocolate and confectionery, vending, and food services.
The most well-known brands from the company are every day, Nescafe, KitKat, Maggi, Milkmaid, Nestea, and Munch.
The office is in Vevey, Switzerland.
Turnover: 87.0 Billion Dollar
Workers: 328,000 or more
5. Parle Agro
The company Parle Agro is from India. The company’s main business is in the food and drink industry. The company has several well-known brands in the beverage and candy markets. Frooti, Appy Fizz, Hippo, Parle G, Bailey, and other products are the most popular.
Consumers are primarily interested in the company because of its cookies and canned fruit juice.
The main office is in Mumbai, Maharashtra.
Turnover: 1 Billion dollars (Approx)
Staff: more than 2500.
6. Britannia Industries Ltd.
Britannia is a company based in India. And the company has won over millions of people with its tasty and healthy baked goods. “Eat healthily, think better” is the company’s well-known slogan.
The company has won the Golden Peacock National Quality Award and the Ramakrishna Bajaj National Quality Award for its excellent work in the field. In addition, several well-known surveys have shown that Britannia is one of the most trusted, valuable, and popular brands among Indian consumers.
The main office is located in Kolkata, West Bengal.
730 million dollars in sales
Staff: over 2,000.
7. Marico Limited
Marico is mainly in the business of beauty and health. At the moment, the company is doing well in 25 countries worldwide. Marico sells many different haircare brands, skin care, edible oils, health foods, male grooming products, and fabric care products.
Marico is best known for its Parachute brand. Other well-known and successful brands from the same company are Saffola, Hair & Care, Nihar, Nihar Naturals, Livon, Set Wet, and Mediker.
Bandra, Maharashtra, is the location of the company’s main office.
61 billion dollars in sales
Staff: 1000 or more.
8. Procter & Gamble
In the Indian FMCG industry, Procter & Gamble (P&G) has a long and well-known history. It’s mostly an American company that makes consumer goods. William Procter and James Gamble set up the company in 1837.
The company makes and sells goods in more than 25 countries worldwide. Ambi Pur, Ariel, Duracell, Gillette, Olay, Pampers, Head & Shoulders, Vicks, Tide, etc., are some of the most popular brands.
Corporate Office: Cincinnati, USA
Turnover: 83 Billion Dollar
125,000 or more workers.
9. Godrej Group
The Godrej Group is a large business group in India. The company works in four main areas: chemicals, consumer goods, agriculture, and services. The company is also well known in the building and real estate industries.
Companies’ most popular consumer brands are Good Night, Ezee, Godrej Nupur, Cinthol, Hit, Godrej Expert, etc. The company is the second-largest player in Indonesia, not India, and is now growing in Africa.
The main office is in Mumbai, Maharashtra.
Turnover: 4 Billion Dollar
More than 25,000 people work there.
10. Amul
Amul is one of the most well-known and respected Indian food and drinks consumer goods brands. This company has also been a leader in milk and milk products. Almost every Indian knows the company by its most famous slogan, “The Taste of India.”
How to Start a Business with an Amul Franchise
The company sells a wide range of food items under the brand name Amul. This list has milk, butter, cheese, ice cream, Dahi, ghee, milk powder, chocolates, etc., that come in a package.
The main office is in Anand, Gujarat.
Turnover: 2.15 Billion Dollar
700 or more workers.
Conclusion:
Fast-moving consumer goods (FMCGs) are products that sell quickly and for a low price. FMCGs are essential to the economy because they are hard to change and affect every part of a person’s life. The FMCG industry in India is expected to grow by 27.9% CAGR and reach US$103.7 billion by 2020. By 2025, it is likely that 850 million people in India will buy consumer goods online. The high-end of the market is moving toward natural products, which are made from ingredients that come from nature.
A few big companies control the FMCG industry in the US, but in India, the industry is made up of many small businesses. After 1991, the FMCG industry was influenced by international companies. India’s street markets are one of the most popular places to shop in cities and small towns. Reliance Retail, Big Bazaar, D-Mart, Easy day, MORE, Spencer’s, Spar, HyperCity, and Star Bazaar are ordinary stores in India. Colgate toothpaste is the most popular and successful product made by the company. Nestle is one of the biggest food companies in the world.
ITC has been around in the business of making and selling fast-moving consumer goods. The products of this company are used by more than two billion people every day. The company has a wide range of products in the FMCG market. Britannia Industries Ltd. is a company based in India. The company has won the Golden Peacock National Quality Award and the Ramakrishna Bajaj National Quality Awards for its excellent food and drink industry work.
Marico Limited is mainly in the business of beauty and health. In the Indian FMCG industry, Proctor & Gamble has a long and well-known history. Godrej Group is a large business group that works in four main areas: chemicals, consumer goods, agriculture, and services. Amul is one of the most well known and respected Indian food and drinks brands.
