The FMCG (Fast-Moving Consumer Goods) industry is the fourth largest sector in India, with a retail market valued at $1.1 trillion, characterized by low-cost products that have quick turnover and high consumer demand. The industry faces intense competition and fluctuates based on consumer trends, with varying purchase behaviors across different income demographics. Key components driving the industry include product life cycles, marketing strategies, packaging considerations, and an extensive distribution network.

1. FMCG Industry
An In-depth Study
Presentation by:
Mintly

2. What is FMCG?
● FMCG: Fast-Moving Consumer Goods
● FMCG Sector: 4th largest sector in India, accounting to 50% of FMCG sales in India.
● Estimated retail market in India is US $ 1.1 trillion.
● FMCG: Products of everyday use.
● Conceptually, FMCG are relatively fast-moving and directly consumed by consumers.
● Low cost products with quick turnover
● Examples: Toiletries, soap, cosmetics, shaving products, glasswares, bilb, batteries,
pharmaceuticals, consumer electronics, etc.
● FMCG Characteristics:
➢ Easily perishable
➢ Small value products
➢ Consumer purchase decisions happen quickly
➢ Frequently sold
➢ Brand switching is common among consumers
➢ Caters necessities, wants, comforta, and luxuries
● Some of the Top FMCG Companies in the world: Unilever, Nestle, Procter & Gamble,
Johnson and Johnson.

3. Major Segments of FMCG

4. Components of FMCG Industry
01
FMCG Product Life
04
Nature of Competition
02
Low-Profit Margin
05
Target Market Sector
03
Purchase Trends

5. Components of FMCG Industry
06
Design and
Manufacturing
09
Distribution
07
Packaging
10
Competitiveness
08
Marketing

6. How it plays role in the success of FMCG industry?
COMPONENTS OF FMCG Industry

7. 1. FMCG Product Life
● Comparatively long product cycle.
● Low Shelf life because it is either perishable or in high
demand.
Credits: Slideshare
● 4 Stages: Introduction, Growth,
Maturity, and Decline
➢ Introduction: Limited Distribution, Huge
advertisement, High marketing and production
cost, Low Profit Margin
➢ Growth: Reduction in product cost, Sales and
profit increase, Competitors entrance
➢ Maturity: Lowest production cost, increased
market share, Declination of sales and profits
➢ Decline: Falling sales and profits, change in
purchase trends

8. 02. Low-Profit Margin
● From marketer’s angle: High
volumes, Low contribution
margins, Extensive distribution
network, High stock turnover
● FMCG: High volume business
with low profit margin
● Cumulative profit on bulk
selling can be substantial

9. 03. Purchase Trends
● Varied purchase trends across the
customer segment.
● Low-income households: Frequent
purchases
● High-income households: Bulk
purchases
● Millennials are opting for online
purchasing trends

10. 04. Nature of Competition
● Old days: nature of competition
among FMCG companies was
measured by productive capacity
and goods’ characteristics.
● Present days: Measurement of
competition is firm’s ability to
establish connection between the
business idea and customer’s
needs, desired, and values

11. 05. Target Market Sector
● Target Market Sectors: Retail
sector and wholesale sector
● Reason: Consistent needs of
the FMC Goods.
● Consistent supply can be
provided by retail and
wholesale sectors

12. 06. Design and Manufacturing
● Minor investments in planning,
machinery, and other fixed assets.
● Basic manufacturing technologies
are also stable for long time.
● Third-party manufacturing is fairly
common

13. 07. Packaging
● Packaging in FMCG sector needs
extra consideration.
● Secondary and tertiary packaging
is needed to maximise the product
efficiency.
● Proper packaging protects the
products and shelf life efficiency.
● Packaging provides information of
the product.

14. 08. Marketing
● Initial capital investment for
manufacturing: Low
● Initial launch of new products: Huge
front-end investments
● Launch investments = Advertisements +
Free samples + Product promotion + …
● For new brand: Launch cost can be as
high as 50-100% of first year revenue.
● For established brands: Launch cost
varies between 5-12%, depending on the
product category.

15. 09. Distribution
● Most common FMCG distribution model:
● Distribution network in India: around 6 million
outlets in India.

16. 10. Competitiveness
● In India, FMCG companies are exempted
or have lower rates of excise duty and
other governmental charges. Hence,
the sector is more competitive.
● Limitations for MNCs:
➢ Poor infrastructure
➢ Versatility of the market

17. CREDITS: This presentation template was created
by Slidesgo, including icons by Flaticon, and
infographics & images by Freepik.
Please keep this slide for attribution.
Resources
● Mintly
● Shodhganga
● Corporate Finance Institute
● Report of McKinsey and
Company
● “FMCG Industry in India” by
India Brand Equity Funding