Sector overview: Consumer goods market in India (FMCG)

Consumer goods market in India (FMCG)

Fast Moving Consumer Goods (FMCG) is the fourth largest sector in India and has grown at a brisk pace over the years due to rising disposable income, a growing young population and increasing brand awareness among consumers. 50% of FMCG sales in India are for household goods and personal care.

With an average age of just 27, India’s population is increasingly focusing on convenience products, both in food and beverages and consumer electronics. Young Indians are highly interested in foreign brands, gadgets and international food trends.

Growing awareness, higher income and changing lifestyles are therefore the key growth drivers for the sector. The urban segment is the largest contributor to the total turnover of the FMCG sector in India, roughly 55%. However, in recent years, the FMCG market in rural India has grown faster than in urban areas. Rural areas now account for 50% of total consumer goods spending.

Snapshot of the consumer goods market in India

Fast Moving Consumer Goods (FMCG) is the fourth largest sector of the Indian economy.
FMCG products dominating the Indian market are detergents, toiletries, dental cleaners, cosmetics, etc.
The FMCG sector in India also includes pharmaceuticals, consumer electronics, packaged foods, soft drinks and chocolate.
The Indian FMCG market is expected to grow in value from 23.6 billion dollars in 2018 to 220 billion dollars by 2025.
E-commerce purchases are expected to contribute 11% of total FMCG sales by 2030.
India’s consumer electronics manufacturing sector is expected to be valued at around 300 billion dollars by 2025.
The Indian packaged food market is expected to double to 70 billion dollars by 2025.
The toy industry in India has the potential to reach 2 billion to 3 billion dollars by 2025.

Our expert

Deepmala Datta Head of Business Development

Growth drivers of the consumer goods sector in India

The government allows 100% foreign direct investment (FDI) in food processing and retail. This should boost consumer spending and ensure that more FMCG products are launched.
The rapid expansion of the number of internet users in rural areas and the access this provides to e-commerce platforms will boost demand and growth of consumer goods.
There is increased demand for branded products in rural India.
The sector has a huge untapped market for appliances like air conditioners (AC), washing machines and refrigerators.
A major factor driving the demand for ready-to-eat foods and dishes in India is the growing young population, especially in urban areas.