The fourth largest sector in the Indian economy is all set for 16% growth during 2008-09, from a base of Rs. 85470 crores, as predicted by FICCI. Going forward, as anticipated by CRISIL, FMCG sector will touch around Rs. 140000 crores by 2015 (33.4B$). This post will through some pointers for growth in FMCG Sector and update with the contemporary category trends. Growth Drivers: FMCG Sector 1. Disposable Income: There is increase in disposable income, observed in both rural and urban consumers, which is giving opportunity to many rural consumers to shift from traditional unorganized unbranded products to branded FMCG products and urban fraternity to splurge on value added and lifestyle products. The increasing salaries, along with rising trend of perks in the corporate sector at regular intervals, have increased people’s spending power. As per some research, there is a high correlation between Disposable per capita and HPC per capita. 2. Organized Retail: The emergence of organized retail have lead to more variety with ease in browsing, opportunity to compare with different products in a category, one stop destination (entertainment, food and shopping) etc, which is playing an important role in bringing boom in the Indian FMCG market. Currently the modern trade is capturing 5% of the total retail space, which will increase to 10% and 25% in 2010 and 2025 respectively. Also, as the credit card and organized retail trend picks up, people won’t think much while buying and buy more. 3. Distribution Depth - Rural Penetration: There are 5500 towns and 6.38 Lacs villages with 2.5Mln and 5Mln outlets respectively. Due to saturation and cut throat competition in urban India, many FMCG companies are devising strategies for targeting rural consumers in a big way. Many FMCG companies are focusing on increasing their distribution network to penetrate with a step by step plan. This is the reason that FMCG urban market size has dropped from 50% to 29% in last 5 years. The FMCG market size for semi-urban and rural segment was 19% and 52% respectively for the year 2006-07. As per FICCI, the FMCG market size for urban, semi-urban and rural for year 2007-08 was expected to be 57%, 21% and 22%, which clearly shows that rural market is the growth engine for FMCG growth. Though the urban markets are growing too, the incremental addition in consumer’s households is much more in rural space as compared to urban markets. The planned development of roads, ports, railways and airports, will increase FMCG penetration in the long term.
The concept of Supermarkets is not new to Indian consumers. In the past few years there has been a significant rise in the number of supermarkets, especially in the metropolitans. Supermarkets in India, houses varied shops selling different types of essential commodities along with luxury items. These Supermarkets are mainly concentrated in urban areas or semi-urban areas. Supermarkets operating in India typically have a heterogeneous mixture of large and small individual retailers. Most of these Supermarkets sell branded products of both, domestic and international manufacturers. Supermarkets of India offer products with different price bands for each and every sections of urban society. All these supermarkets claim to work on the principle that “the consumers must have the freedom of choice”. The customer is supposed to feel daunted-bewildered, at the large number of choices that he is offered. It is no wonder that most of these supermarkets look the same. Breathtaking amount of research have gone into designing these places. A customer is forced to go past thousands of other products in order to search for what he needs. The concern of the supermarkets in to increase their sales and in order to do so they manipulate the customers and their purchasing prowess into making them purchase items that they want to sell. This is where Point-of-Purchase advertising comes into effect. Point-of-purchase advertising or P-O-P is a generic term for display units (e.g. retail display stands, showcases, interactive displays, literature dispensers, poster holders, sign holders etc.) used to merchandise specific goods and services, or as a vehicle for presenting point-of-sale advertising such as printed leaflets, posters, or audio-visual media. ...
Increasing demand of premium products: considering the Indian market there is a growth rate of 33% in demand of premium products this tells us the future opportunity & expanding market size of these high range products in the developing nations.
Introduction India is the world’s second most populated country with over 1.2 billion people. Since its independence from British rule in 1947, the country has been more or less a stable democracy. Until 1991, Indian governments imposed economic austerity and its markets were comparatively closed to the world. Economic reforms in 1991 brought about a change which made India an attractive and huge market for multinational corporations from all over the world (Joshi 8). Retail industry within a globalized world is one of the most thriving and profitable sectors.
Compare and contrast the distribution decisions of multinational corporations PepsiCo and Nestlé in India. In particular conduct research and identify significant cultural issues that would be relevant to the development of those strategies.
Fast moving consumer goods product are relatively low cost and don’t require a lot of time and financial investment to purchase. Profit of individual product FMCG product is less.
Even the slowdown in current global economies could not bring retail sector down as retailers keep seeking for opportunities overseas to avoid challenging economic condition, which make this sector becoming more globalised and competitive. As an heir of an industrial components retailer, I also believe there are bountiful opportunities to grow in this emerging industry. But without deeply and truly understanding in every aspect of retailing, one could not survive in the battle. For this reason, I would like to pursue my education further by studying Master in retail management to obtain knowledge in retailing and hopefully become successful in the field.
Retail marketing is unique due to the fact that its primary focus is to target individual consumers. Retail marketing, therefore, requires much more variety than a business to business (B2B) model, for example, in order to satisfy customers. This poses interesting challenges when management decides the types of items to stock, how to price those items, where to get those items from, and how to promote the those items to consumers. The purpose of this paper will be to analyze how distribution, price, product, and promotion strategies relate to each other and the retail mix.
The Indian market as a whole and as such even the fashion industry outstretched its arms to the global market circa 1991 which marked the beginning of a new era, we commonly refer to as “globalization”. This entailed a retail boom which led to a veritable increase in the retail space for retailers both at the local and the international level. The invent of globalization and liberalization in India brought with it an upsurge in the Indian market that considerably altered its shape and structure. With a GDP growth of 6.8 percent per annum during the 90’s alongside a foreign exchange of $35 billion and a live stock market which would attract substantial foreign exchange made India an alluring market which has maintained its momentum and growth. India’s second largest market is the apparel industry with $3.5 billion (Data monitor). In the past and till the present time, organizations in order to obtain overseas funding used to sell their single branded products to common public. In the retail outlet, investment of 51% was allowed in individual branded products. An increase in the number of local designers who have benefited from international identification recently is one of the major reasons for this expansion. Other factors like the introduction of related courses for business education indulged in developing designers and creating an association with the industry are responsible for such growth in the Indian fashion industry as well. According to the estimations made between mid 2008 to 2012, the fashion industry of India was expected to increase by 178% by the year of 2012 and meet $189 multi millions as per US (United States) currency. This growth in the industry is hinged on a substantial increase in huge fashion incident...
The Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. It accounts for over 10 per cent of the country’s Gross Domestic Product (GDP) and around 8 per cent of the employment. India is the world’s fifth-largest global destination in the retail space.
The company through its research concluded that its product portfolio and the prices were appropriate for the rural markets. But, the problems were with the other two P’s: Place and Promotion.
Factors inhibiting growth of factoring in India: Factoring industry has grown to the major extend all over the world. More than 1 lakh business houses are using factoring services over 7 million customers worldwide. The factoring volume is quite low in India. The factors inhibiting growth of factoring volumes
While the world’s developed economies are still addressing the troubles deriving from the banking crisis of 2008, several emerging markets have achieved a significant rise in incomes, which brings FMCG companies with appealing growth opportunity to enter the new markets and expand market share. According to a report made by The Economist Intelligence Unit (the world’s leading resource for economic and business research, forecasting and analysis) and Mintel (a leading global supplier of consumer, product and media intelligence) published in January 2013, consumption expenditure in the emerging markets, namely China, India, Mexico, Turkey and South Africa is expected to rise between 7.7% and 15.2% per annum between 2013 and 2016. Meanwhile,
India is supposed to be the retailing hub for various goods and products with the highest density of variety of shops. The Indian retail industry was and continues to be, highly fragmented due to its organized and unorganized retailing. Retailing activity is fast growing and changing in India in the recent past, which is started with economic reforms, liberalization and globalization. Owing to an economic reform, India may not be able to stop entry of foreign retailers or foreign direct investment (FDI) in the retail sector. The organized retailing is a recent development in India; it refers to corporate backed and retail chains and hypermarket and privately owned large retail shops. Corporate players in organized retailing are few in India;
It is generally said that the rural areas house up to 70% of India’s population. Rural India contributes a large chunk to India’s GDP by way of agriculture, self-employment, services, construction etc. As per a strict measure used by the National Sample Survey in its 63rd round, called monthly per capita expenditure, rural expenditure accounts for 55% of total national monthly expenditure. The rural population currently accounts for one-third of the total Indian FMCG sales.
This research paper refers the study with the diversified population of Chennai, tamil nadu. The researcher of this paper believes that a mass of population includes more of low or middle income groups in Chennai. Tamil nadu consists of a mix of all types of income groups. The study uses an intensive literature review to figure out the factors for