“FMCG Industry to Ride on Premium Goods”
In the November 19, 2010 issue of Livemint, Booz & Company Partner Abhishek Malhotra (India) said that consumers in India are emerging from the global economic slowdown willing to spend on higher priced and better quality products. “There is going to be a marked focus on beauty, health and wellness segments, which will be growth drivers for this industry,” Malhotra said. “For instance, one is already seeing a shift from cold creams to anti-ageing creams.” He was referring to a Booz & Company study, “Fast Moving Consumer Goods (FMCG) Roadmap to 2020—The Game Changers,” which found that at least nine megatrends will shape the future of the Indian FMCG industry as it grows at a base rate of 12 percent a year to become a Rs.4 trillion industry by 2020. Beyond the anticipated demand for premium products, the report foresees a huge potential in so-called “Bottom of the Pyramid” (BOP), or poor consumers. The BOP in rural markets will become an important source of consumption and require tailored products, it said. The report also said FMCG players have increased their focus on online advertising which has, albeit on a low base, grown at 57 percent annually between 2006 and 2009, and is expected to grow 30 percent a year.