The FMCG sector in India includes household care, personal care, and food and beverages. It has a market size of $25 billion and constitutes 2.15% of India's GDP, growing at 10-12% annually. The sector is the fourth largest in India and employs over 3 million people. It is expected to reach $47 billion by 2013 and $95 billion by 2018 through proposed GST implementation and increased FDI.

1. FMCG SECTOR IN INDIA
• Its principle constituents are household care, personal care , food & beverages.
• The Indian FMCG sector, with a market size of $ 25 billion (2007–08 retail sales), constitutes 2.15 per
cent of India’s GDP.
• The industry is poised to grow at CAGR between 10 to 12 per cent annually.
• Annual profit of FMCG sector is $14.74 billion.
• Market growth rate – Rural -40%, Urban -25%
• Average Indian spending on groceries and personal care is 48% (Groceries 40% & personal care 8%).
• Implementation of the proposed GST and opening of FDI are expected to fuel growth of industry’s
size to $47 billion (Rs 225,000 crore) by 2013 and $95 billion (Rs 456,000 crore) by 2018, according
to a new Ficci-Technopak report.
Products which have a quick turnover, and relatively low cost are known
as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced
within a year. Examples of FMCG generally include a wide range of frequently
purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning
products, shaving products and detergents, as well as other non-durables such as
glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include
pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue
paper, and chocolate bars.
Indiaʹs FMCG sector is the fourth largest sector in the economy and creates
employment for more than three million people in downstream activities. Its
principal constituents are Household Care, Personal Care and Food & Beverages.
The total FMCG market is in excess of Rs. 85,000 Crores. It is currently growing at
double digit growth rate and is expected to maintain a high growth rate. FMCG
Industry is characterized by a well established distribution network, low
penetration levels, low operating cost, lower per capita consumption and intense
competition between the organized and unorganized segments.
As it is meeting the every-day demands of consumers, it will continue to grow…

2. Growth Prospect
Large Market
India has a population of more than 1.150 Billions which is just behind China.
According to the estimates, by 2030 India population will be around 1.450 Billion
and will surpass China to become the World largest in terms of population.
FMCG Industry which is directly related to the population is expected to maintain
a robust growth rate.
The structure
The Indian FMCG sector is the fourth largest sector in the economy and creates employment for three million people in
downstream activities. Within the FMCG sector, the Indian food processing
industry represented 6.3 per cent of GDP and accounted for 13 per cent of the country's exports in 2003-04.
A distinct feature of the FMCG industry is the presence of most
global players through their subsidiaries (HLL, P&G, Nestle), which ensures new product launches in the Indian market from the
parent's portfolio.
Critical operating rules in Indian FMCG sector
• Heavy launch costs on new products on launch
advertisements, free samples and product promotions.
• Majority of the product classes require very low investment
in fixed assets
• Existence of contract manufacturing
• Marketing assumes a significant place in the brand building
process
• Extensive distribution networks and logistics are key to
achieving a high level of penetration in both the urban
and rural markets
• Factors like low entry barriers in terms of low capital
investment, fiscal incentives from government and low brand awareness in rural areas have led to the mushrooming of the
unorganised sector
• Providing good price points is the key to success