FMCG to grow by 50 per cent

Televisionpoint.com Team
Due to an expected excessive penetration in to the rural and semi-urban the Fast Moving Consumer Goods is expected to grow by almost 50 per cent by 2010.

According to Associated Chambers of Commerce and Industry of India, the Assocham's report, FMCG's market size is likely to double from the present level of RS 48,000 Crores to RS 100,000 Crores. However, the study cautions manufacturers about the pressure on their margins due to cutthroat competition to cater to the growing demand.

The report says, "FMCG will be witnessing more than 50 per cent of its growth in rural and semi-urban segments by 2010 which in totality is projected to grow at an annual compound growth of 10 per cent to carry forward its market size to RS 100,000 Crores from the present level of RS 48,000 Crores."

According to the study, the rural and semi-urban markets presented a market size that is three times bigger than the urban markets. It, however, has its own set of problems: low per capita disposable income (which is half the urban level), large number of daily wage earners, acute dependence on the weather, seasonal consumption linked to harvests and festivals, poor infrastructure like roads and power, and inaccessibility to conventional advertising media.

The growing penchant and insatiable appetite of rural and semi-urban folds for FMCG products would mainly be responsible for this development and manufacturers would have to deepen their concentration for higher sales volumes in niche areas.