Fast Moving Consumer Goods or Fmcg in short, is a sector that contributes significantly to the revenue generated by the Indian government. Personal care and household items account for 50% of the FMCG sales in India. Over the years, the growth in the sector has been possible, thanks to the changing Indian lifestyles and easy accessibility. However, with the onset of the global COVID-19 pandemic, the Indian Fmcg Sector is sailing through troubled waters. Let’s analyze what holds for the Indian FMCG sector in the coming future.
Pandemic-Induced Lockdown Effect on FMCG Sector
Taking a cue from the “most affected” countries that announced lockdowns to curb the menace of the Coronavirus pandemic, the Indian government too announced a lockdown beginning March 2020 onwards. The lockdown announcement was in the midst of an already slowing Indian economy. The announcement was taken in the right spirit by the people. After all, lives do matter, right? But, the lockdown induced many factories to shut down or cut down their production. It crippled the supply chain. Also, millions of square meters of space were rendered redundant.
The crippling of the supply chain, stockpiling, and stock-outs impacted a lot of FMCG companies who dealt in selling essential products like fresh food, packaged food, or bottled water. The Covid-19 pandemic suddenly catapulted hygiene products into the essential category. Travel, apparel, footwear, consumer electronics, alcoholic drinks, and tobacco were rendered irrelevant and had to take a back seat. As a result, the related FMCG companies had to take a massive hit. However, the smarter ones amongst these FMCG companies who diversified flexibly by supporting the fight against the pandemic and converted their facilities to produce essential products like masks, hand sanitizers, or ventilators kept themselves floating around!
Are Consumers getting more into Online Shopping Habits?
Grocery retailers account for more than sixty percent of store-based retailing sales. During the lockdown, the Indian government permitted retailers to sell essential items and consumer healthcare products. This resulted in the e-commerce companies who focussed on grocery sales to record an increase in their sales since people were strictly confined to their homes. With many households now understanding the ease and benefits of buying their groceries online, there’s all the possibility of e-commerce companies benefiting in the longer run.
On the other hand, non-grocery companies who deal in apparel or footwear or consumer electronics have already been popular amongst youngsters who prefer to shop online. This section of the FMCG sector which was severely affected by the complete shutdown will take a while for their retailing operations to normalize. But, it’s quite certain to pick up in a big way soon.
The trend as seen with the evidence all are a pointer to that the shift to online buying is here to stay. The unlocking of the lockdown is begun to see the acceleration – consumers today are buying more health and home products than ever!
Top Indian FMCG Companies
India is a country vast country whose population depends on the various FMCG companies for their daily needs. So, it’s no wonder that India is also a big market for FMCG companies! Hindustan Unilever, ITC, Nestle, Dabur, Asian Paints, Cadbury, Britannia, Procter and Gamble, Marico, Colgate-Palmolive, Gillette, Godfrey Phillips, Henkel Spic, Johnson and Johnson, Modi Revlon, Wipro, Nirma, Amul, Godrej to name a few have today all become household names in India. Let’s discuss a few of the prominent “Indian” FMCG companies. For an annual report of any Indian FMCG company, you may visit the site https://www.reportjunction.com/Sector/FMCG.htm
Hindustan Unilever Ltd
A presence in India of over 80 years now, Hindustan Unilever Limited is the largest Indian FMCG company – it comes in the top-five bracket. The company caters to categories in fabric wash and household care, purifiers, skin and hair care, oral care, deodorants, beverages, frozen foods, and ice-cream, etc. Some of its highly popular brands that immediately come to mind include Surf Excel, Rin, Vim, Pepsodent, Closeup, Axe, Brooke Bond, Knorr, and Kissan.
ITC Ltd
ITC was established in 1910. It is diversified into businesses that include FMCG items comprising of foods, personal care, cigarettes, apparel, stationery products, safety matches and incense sticks, paperboards, packaging, agro products, etc. Famous ITC food brands that come to mind include Aashirvaad, Sunrise Foods, Sunfeast, and Bingo.
Dabur India Ltd
Having a strong presence across the globe, Dabur India Limited is the world’s largest and leading ayurvedic and natural healthcare FMCG companies. Dabur India’s business mainly caters to consumer care, and foods. It enjoys a good market share in hair oils, hair creams, shampoos, dental care, and skincare. Some of its brands that immediately come to mind include Vatika, Hajmola, Real, Fem, and Chyawanprash.
Godrej Consumer Products Ltd
One of the largest household insecticide and hair care players, Godrej Consumer Products is ranked number two in soaps in India. It is mainly in the manufacturing and marketing of household personal care products that include soaps, hair colorants, and liquid detergents. Some of its brands that immediately come to mind include Cinthol, Godrej Expert, Hit, Good Knight, Ezee, Protekt, and Godrej Fair Glow.
Britannia Industries Ltd
A leading Indian FMCG company, Britannia Industries Limited is among the most trusted food brands. Its product portfolio includes bread, biscuits, cakes, rusk, and dairy products. Dairy products include cheese, beverages, milk, and curds. The famous brands under its belt that come to mind include Good Day, Tiger, NutriChoice, Milk Bikis, and Marie Gold. They are all today’s household names in India.
Current Indian FMCG Sector Scenario
According to data analytics firm Nielsen, the Indian FMCG sector will witness a flat growth in the current year 2020 due to the longish and extended lockdowns, restrictions on the manufacturing sector, and closure of stores. While the July-September quarter is likely to see stability and some growth, the latter part of the second half of 2020 is likely to usher in some hope. There could be demand picking up due to the festive seasons wherein food categories will see higher growth.
During the lockdown, many products were a part of the essentials that were permitted to be sold. And, many FMCG companies were into the production of these products! But, due to the consumers being confined to their homes and compounded by the logistic issues, the direct sales remained subdued. To overcome this barrier, smarter players in the FMCG industry found innovative ways to reach people using internet technology.
Forecasting Indian FMCG Sector Scenario Beyond 2020
As per Crisil Ratings, the Indian FMCG sector could see around 3% drops in revenue in the upcoming financial year FY21. This is predicted mainly because of disruption in the supply chain that is yet to come to terms with itself, demand shock, and uncertain income issues for consumers due to the lockdown induced by the pandemic. All this will result in restrained sales of packaged foods, personal care goods, and other FMCG products well beyond 2020.
But one can always remain optimistic from the fact that essential products such as packaged food and beverages have seen a steady increase in the demand. This could mainly because consumers being stuck in their homes stocked up their packaged foods.
The high essentials quotient and the rising awareness about hygiene, the home care segment is likely to be the least affected. Not forgetting this segment forms an estimated 20% of the FMCG sector’s revenue. So, that’s another reason for the sector to remain optimistic!
Smart Use of Data and Technology can You
Over the past few years, until the downtrend in the Indian economy started, the FMCG sector was among the top few revenue-generating sectors in India.
But the slow-down in the economy followed by the onset of the global pandemic has cast a lot of uncertainty clouds going forward. When the going gets tough, the tough get going.
Companies that embrace technology and make smart use of their databases are likely to overcome many of their obstacles. Data Analytics can play a key role and implementing Artificial Intelligence (AI) and robotics can bring down labor costs. Leveraging digital marketing along with personalization can take you a long way in improving your sales and revenues.
If you are unsure about your sales and marketing strategies and the road map ahead and bothered about the uncertainty that lies ahead, you should always take expert advice or hire professional consultancy services. Best Data Provider is always there to help you!
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