The MSME industry in India has touched new heights with the advent
of more number of participation in the sector. It is very well known fact
that MSME businesses once registered with the Ministry of MSME via
the portal allotted to them get a sufficient amount of support to thrive
within the sector and scale up very fast and also in an organic way. The
contribution of the MSME sector to the India’s business sector is
commendable. The impact of the entire MSME sector towards the
country’s GDP is mind boggling. There are a lot of MSMEs that are
slowly trying to tap into varied sectors depending upon the level of
demand they are able to identify. One such instance is of the FMCG
sector. There are a lot of opportunities for MSMEs in FMCG industry.
The subcontinent of India is populated by a wide majority of people
belonging to different class and strata. There is a huge demand for
quality products in all parts of the country. The small business
enterprises and the entrepreneurs that wish to bring reforms in the
FMCG sector can definitely find areas of improvement within this sector
and act accordingly.
As per many surveys and studies conducted over a considerable
amount of time, the demand for FMCG products has been steadily
on the rise. There are many factors that contribute towards this legit
demand. One of the foremost factors that are responsible is the birth
rate and youth population of the country belonging to the age of
eighteen to twenty-five years. Contrary to some opinion there is a
severe lack of high quality and cheaper alternatives to the FMCG
products that are sold currently in India.
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The top 10 FMCG companies of India are Hindustan Unilever Limited,
Colgate Palmolive, ITC Limited, Nestle, Parle Agro, Britannia, Marico,
Procter & Gamble, Godrej, AMUL. These top FMCG companies in
Indiacomprise of the majority of the market share. FMCG comes under
the category of essential commodities and hence the quality standard
has to be maintained very carefully. Fast-moving consumer goods (FMCG)
or consumer packaged goods (CPG) are products that are sold quickly
and at relatively low cost. Examples include non-durable goods such as
soft drinks, toiletries, over-the-counter drugs, processed foods and
many other consumables. In contrast, durable goods or major
appliances such as kitchen appliances are generally replaced over a
period of several years. These items are meant for daily of frequent
consumption and have a high return.
The above list mentioned some of the most profitable fast moving
consumer goods brands in India. Rural areas expected to be the major
driver for FMCG, as growth continues to be high in these regions.
Rural areas saw a 16%, as against 12% rise in urban areas. Most
companies rushed to capitalize on this, as they quickly went about
increasing direct distribution and providing better infrastructure.
Companies are also working towards creating specific products
specially targeted for the rural market. The Government of India has
also been supporting the rural population with higher minimum
support prices (MSPs), loan waivers, and disbursements through the
National Rural Employment Guarantee Act (NREGA) programme. These
measures have helped in reducing poverty in rural India and given a
boost to rural purchasing power. Hence rural demand is set to rise with
rising incomes and greater awareness of brands.
The Urban trends have also been changing quite rapidly. With the
increase in disposable incomes, mid- and high-income consumers in
urban areas have shifted their purchasing trend from essential to
premium products. In response, firms have started enhancing their
premium products portfolio. Indian and multinational FMCG players are
leveraging India as a strategic sourcing hub for cost-competitive
product development and manufacturing to cater to international
markets.
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The majority of the Global corporations look at India as one of the key
emerging markets where future growth is more likely to emerge. The
growth in India’s consumer market would be primarily driven by a
favorable population composition and increasing disposable incomes.
There is a huge influx of investments from foreign investors into the
Indian market. These players are very smart in assessing the overall
condition of the economy and make a solid decision.
As per the current FMCG industry analysis, there is a huge void that the
MSME sector can help to fulfill if they play and strategically enter this
market. There are plenty of opportunities within this sector that is
entirely absent in the other sectors. It depends upon on the expertise
of the MSME entrepreneurs and their methods of tackling the issues at
hand and delivering high quality FMCG products to the common Indian
households.
The FMCG market size is India is very vast and in heavily underserved.
Each and every part of the country does have its fair share of FMCG
businesses but the out quality is either poor of the prices are relatively
higher than the quality of products that are served to the people of that
region. It is only in the interest of the top 10 FMCG sector companies in
India that the majority of the retailers are reliant upon. It is very important
for an economy to have its business segments well segregated and that
starts with the advent of the entry of the MSMEs in India’s vast FMCG
sector.
Over the years, the small scale sector in India has progressed from the
production of simple consumer goods to the manufacture of many
sophisticated and precision products like electronics control systems,
micro wave components, electro medical equipments, etc. The process
of economic liberalization and market reforms has further exposed
these enterprises to increasing levels of domestic and global
competition. With the increase in the use of digital technology majority
of the Indian consumers would be influenced and would spend more
than average money and thus boost the performance of the MSMEs
that are operating within the FMCG sector and will likely reshape the
future of the FMCG sector in India.