India's Fast-Moving Consumer Goods (FMCG) sector is one of the largest and fastest-growing markets globally, driven by rising consumer income, urbanization, and increasing demand for quality products. The sector includes diverse categories such as food and beverages, personal care, and household items. However, intense competition, regulatory challenges, and shifting consumer preferences require companies to stay agile.
Tecnova India helps FMCG companies navigate this dynamic landscape by providing market research, consumer insights, and strategic advisory services. With Tecnova's support, businesses can optimize their market entry, product positioning, and growth strategies to succeed in India's vibrant FMCG sector.
Outlook of one of the World’s largest FMCG Market
According to some of the leading FMCG Consulting Firms in India, steady and sustainable growth of the Indian FMCG market has been evident over the past few years, with market experts projecting the sector to witness manifold development. With modern customers in both rural and urban areas opting for e-commerce portals for purchasing packaged goods and other fast-moving products, digital connectivity has improved significantly.
Furthermore, with the Government easing its regulatory framework to allow and attract enhanced foreign investments, global conglomerates are showing a newfound interest in this sector. With proper assistance from FMCG business consulting firms, this marketplace has the scope for a vast economic expansion.
Exponential Growth of the Indian Market (according to FMCG Consulting Firm in India)
According to market researchers, the Indian FMCG sector can reach US$ 220 billion by 2025. During FY21 itself, this industry had grown by 16% in value. Even after the volatile conditions of the global business sectors over the two years, the Indian FMCG market had managed to register a noticeable growth. As a result, foreign firms have an enticing opportunity here regarding production and retail.
The evolving nature of consumer behavior continues to play a key role in the steady development of this sector. As business organizations opt for unique approaches of value propositions to retain and acquire customers, reinvented market strategies are shaping the future of this industry.
For instance, catering to a rising urban and rural demand via direct sales to consumers has been a forerunner of a strategical overhaul in this field. Companies implementing the direct-to-consumer transaction model via separate websites have reported that the year-on-year customer demand increased by 88% in 2021.
These financial trends have quite naturally attracted the attention of global business giants. With the help of FMCG business consulting firms in India, these companies can avoid the pitfalls of entering a sector in uncharted territory.
Rise of Discretionary Expenses in Rural Indian Households
The Indian middle class contributes around 70% of the total consumer spending in this country. Suffice to say, the consumer behavior shaped by this particular section of the Indian population is quintessential for a business’ overall development.
So naturally, the steady rise of the disposable income of the people under this demographic is bound to result in positive impacts on the FMCG industry. The average annual discretionary expense of Indian households is projected to reach USD 8,300 by 2026. Coupled with the low market penetration level of the rural customer base, this enhanced spending capability allows a company to capitalize on expanding its business. In FY21 alone, the Indian FMCG market had grown at 16%, the fastest in the last nine years. So new investors can rest assured about a strong outlook for this sector.
How can FMCG Consulting Firm in India develop Supply Chain for Domestic as well as Export Sales for Global Players
Production volume remains the cornerstone of turning a profit in the low-margin business of the FMCG sector in India. In order to ensure that they can meet the ever-shifting customer preferences, businesses need to have a proper blueprint of their supply change stratagem. FMCG Consulting firms in India can help foreign investors navigate their way to de-risk a business environment via adequate supply chain management practices. These firms are key to localizing the products offered by these merchant companies. They can also provide a thorough retail roll-out support by establishing their network set-ups. This way, they can stabilize the companies’ financial and operational functionality.
How Partnering with E-Commerce Companies Can Ensure a Sustainable Management for the Indian FMCG Sector
With increasing technology-oriented transaction methods rapidly replacing set standards of business dealings, e-commerce sectors have become the predominant medium of retail and purchasing. The public interest and the push by the Indian Government towards completely digitized monetary proceedings have further accelerated the ordeal.
Proper collaborative solutions from FMCG business consultancy firms can enable global investors to partner with such e-commerce brands for a successful market entry. It is projected that by 2030, 11% of the total FMCG sales will be contributed by the e-commerce sector. Consequently, the business-to-customer [B2C] model empowered by a search engine optimized and mobile-friendly portal leads to an improved user experience. As a result, businesses can witness a massive return on investment [ROI] in the long run.
Enhanced Investment Approval of Foreign Equity Leading to Increasing FDI Inflow
The Indian Union Government has implemented several investment-friendly policies that can be lucrative for global conglomerates. According to the regulations, the Government offers investment approval of up to 100% foreign equity in single-brand retail and 51% foreign equity in multi-brand retail.
Moreover, the Government has also employed a production-linked incentive scheme for the food processing sector, which is expected to boost exports and create 2.5 lakh jobs. As the FMCG products remain in demand all year long, investors would be looking for long-term benefits from this sector. It is no surprise that this sector has seen a steady FDI inflow of USD 18.59 billion from April 2000 to June 2021.
How can an FMCG Consulting Firm in India help?
FMCG Consulting firms in India like Tecnova help foreign investors to become market leaders in the consumer and retail space. They offer assistance in crucial matters like
- Formulating a go-to-market strategy
- Source manufacturing partnerships
- Joint ventures
- Product launch
- Public relations management
- Promotional Activities
- Customized market study
As the movement towards complete digitization continues to gain traction and momentum, foreign firms are finding it equally easier and more profitable to enter the Indian FMCG market. With proper assistance from these consulting firms, the business sector is broadening its horizons at a remarkable pace.
Reference
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