FMCG & Consumer Durables

The latest Assocham-TechSci research report foresees a shining future for the Indian fast-moving consumer goods market (FMCG) market. It predicts more economic growth with organized retail having a larger market share. This is a great outlook for not just FMCG, the fourth largest sector, but for the Indian economy on the whole because it boosts confidence for global corporations.

Currently, two conjoined forces are shaping the FMCG sector – the evolution of the Indian consumer with greater discretionary spending, broadening outlooks, and preferences as well global companies who are entering the Indian market, understanding the Indian consumer, and tailoring their products to suit the Indian market.

Little wonder then, that Randstad’s 2017 Salary Trends Study recently reported that the FMCG sector pays the highest salaries in India. At an average CTC of US$1.13 million, FMCG is a highly lucrative industry to work in and therefore attracts many hopeful aspirants. It requires outstanding skills and exceptional personality to make it in this fast moving sector. That means higher pressure on the HR industry to identify those bright stars.

In the consumer durables sector, India is set to become the fifth-largest market in the world, led by rapid urbanization and an increase in the number of nuclear families. Growth in this sector is expected to be fuelled by a rise in consumption from rural markets.

Key Stats

• The Assocham-SciTech report forecasts that the domestic FMCG market will touch US$ 104 billion, a two-fold increase from the current US$49 billion and a CAGR growth of 20%
• The Indian FMCG sector provides employment to at least three million people
• Food products is the largest segment of the FMCG sector, leading by about 43%
• Organized retail currently accounts for a mere 2% of the FMCG sector
• The consumer durables sector is expected to grow at a compounded annual growth rate of13% through 2020

Challenges

• Extreme competition leading to widespread poaching and bleeding of talent
• Highly unregulated and fragmented industry with almost 50% being unbranded goods
• Aggressive drive toward digitization creating challenges in finding professionals with appropriate skills
• Anticipated regulatory and financial reforms from the government are expected to lead to operational glitches