Small cities & eCommerce will fuel the demand in FMCG Sector: Report

India's smaller towns and cities are expected to continue more in shapping future demand for the fast moving consumer goods sector (FMCG).
FMCG Industry

In a recent report posted jointly by industry chamber CII and Boston Consulting Group (BCG) says that India’s smaller towns and cities are expected to continue more in shapping future demand for the fast moving consumer goods sector (FMCG), while eCommerce companies will contribute increasingly larger share of sales for such companies.
The report named "Re-Imagining FMCG in India", said growth in disposable income, increased urbanisation, and the increase in the number of nuclear households are driving growth of the Indian branded FMCG sector estimated to be currently worth around $65 billion.
Commenting on the release of the report, Abheek Singhi, Director, BCG said, "The growth opportunity is massive, yet, the shape of this opportunity would be very different in the future. We expect greater premiumization, tier 2-4 towns to be the drivers of growth.”
Households with more than Rs.10 lakh annual income would account for 50 percent of the spending in the category, the report added.
As per CII, this would lead to premiumization across categories - from unbranded to branded - and 'luxuriating' of products.
The report also stated that companies will need to focus on tier 2 and 3 cities and rural regions, as their contribution will be an important source of demand for the sector as more and more consumers move from the non-branded to the branded segment.
It estimates that by 2020, more than 150 million consumers would be digitally influenced in FMCG.

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