|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
Exploring emerging trends shaping the future of FMCG sector
|
|
Saturday, 05 August, 2023, 15 : 00 PM [IST]
|
|
Suchita Gupta
|
Fast-moving consumer goods (FMCG), also referred to as consumer-packaged goods (CPG) are bought frequently, are consumed rapidly, are priced low, and are also sold in large quantities, which means a higher turnover. Nearly everyone in the world uses fast-moving consumer goods (FMCG) every day.
It is the largest group of consumer products because of high consumer demand. They have a short shelf life as they are in high demand. They account for more than half of all consumer spending, but they tend to be low-involvement purchases.
FMCG products are divided into four categories depending on the industry they are sold in. These include food and beverages, healthcare, personal care, and home care.
• Food and beverages products are further categorised into processed food (pasta, bread, and potato chips), ready to eat food (packets of nuts or crisps), and beverages (water bottles, coffee cups, and cans of soda). These products have a short life span and high turnover rates.
• Healthcare products such as bandages, plasters, syringes, condoms, are generally in high demand, not built to last and very distributed.
• Next comes personal care products, such as soap, shampoo, toothpaste, lotions, deodorants. These can also be classed as FMCGs because they are also required by most consumers on a daily basis, usually bought at a low cost and not built to last.
• Home care products include stuff used for household purposes such as kitchen towels, dusters, bleach, toilet rolls. These are standardized goods with low durability that are highly distributed and sold at a usually low unit price.
With a significant change in habits and lifestyles in the next few years, it is expected that new product categories will arise within the FMCG sector with an aim to meet the demands of the new consumer living in the new world.
According to a report published by Allied Market Research, the global FMCG market size is anticipated to reach $18,939.4 billion with a considerable CAGR from 2022 to 2031. Rapid increase in the global population is leading to the rise in consumption of consumer goods, thereby boosting the growth of the market.
Numerous other factors such as changes in the lifestyle of consumers in developed and the developing countries, the growth in trend of online shopping, R&D for the new brands and products, the growth in urbanisation of FMCG products, rise in income of customers high adoption of premium products by consumers, expansion of FMCG network in rural areas of emerging economies, and the introduction of new products with attractive pricing are also driving the growth of the market to a great extent.
In addition, the Asia-Pacific region is currently dominating the market with the highest market share and is also expected to witness the fastest growth rate during the forecasted period, owing to the large population base. Consumption of processed and packaged goods has increased considerably with an increase in the working population. With the economic development in nations such as China and India, new business industries will emerge even more in the region. As per recent projections from the World Bank, India would have exceeded Japan and Germany to become the world's third largest market in terms of total consumer expenditure by 2030.
However, the outbreak of Covid-19 pandemic created several challenges for the FMCG industry, owing to implementation of the global lockdown which led to temporary closure of manufacturing facilities, ban on import & export activities, disruptions in the supply chain, and shortage of labor force. The industry witnessed significant ups and downs in 2020 and is currently striving to survive the deep waters of new demands and restrictions. In order to balance the business growth, FMCG corporates have presided over an increase in average indebtedness driven by steady investment and debt funded acquisitions.
The FMCG industry also witnessed a robust transition during the pandemic, due to the rising demand for more convenience and the changing dynamics of customer behavior. The pandemic has instilled the importance of health and wellness in the minds of people. Products like vegan protein, plant-based milk alternatives like almond milk, coconut milk, soya milk, grass-fed meat, and alcohol-free mocktails are gaining a lot of traction and availability. People around the globe have started preferring gluten-free products, due to the perceived health benefits of a gluten-free diet.
Furthermore, the pandemic has driven the trend of online shopping in the FMCG industry. Even in the post-pandemic, consumers are finding it easier, safer, and more convenient to shop online. Owing to this factor, brands are focusing on building and enhancing their online presence to boost their engagement with consumers for e-commerce shopping. In large metropolitan regions, the majority of consumer purchases are conducted through e-commerce, and this trend is quickly extending to non-metropolitan areas as well. Almost every FMCG brand has partnered with big e-commerce websites like Flipkart, Amazon, Blinkit, Big Basket, and others. Shopping online via apps is becoming a current trend in the FMCG business as a consequence of the massive increase in internet access across metros and non-metros.
In addition, digitisation has emerged as a trend shaping the future of retailing consumer goods. Technological advancements like face recognition, AI and data analytics, IoT, algorithm analysis, predictive analysis, and blockchain are revamping the landscape of the FMCG industry.
(The author is a content writer)
|
|
|
|
|
|
|
|
|
|