Rising incomes and changing household spending partners are driving the Fast Moving Consumer Goods (FMCG) in India, leading to a shift towards pre-packaged foods and growth in sale of household products.
These were some of the findings of the new white paper published recently by economic forecaster The Economist Intelligence Unit and consumer market expert Mintel that analyzed key trends in the FMCG categories in emerging markets, including India.
To stay competitive in the market place, retailers in Asia need to stay ahead of the curve and predict consumers' needs even before they know it, said Sophia Lai, Groupon Hong Kong's head of marketing at the Retail Innovation & Management Forum 2012 in Hong Kong.
According to Lai, an accurate prediction of customers’ need rely on two major elements—customer engagement and analytics.
FMCG major Dabur India will look for strategic investors for its retail subsidiary H&B Stores that operates New U Stores across the country.
Sunil Duggal, Dabur India chief executive officer, said the company would spin off the retail business eventually, and with the government opening up foreign investments in retail, it is essentially looking for foreign retailers as strategic investors.
It is likely the momentum in the fast-moving consumer goods (FMCG) segment continued in the quarter ended September, with FMCG companies expected to report good profits, owing to strong volume growth. Net sales of most companies would grow 15-18 percent, with underlying volume growth of 13-14 percent, said analysts tracking the sector.
Price-led growth during the quarter is likely to stand at 3-5 percent, indicating companies would continue to take a calibrated approach on raising prices.
The new packaging norms, which will kick in on 1 November, will push up the product prices. While firms such as Godrej Consumer (GCPL) and Dabur said they saw no immediate impact on pricing, most companies are bracing up for the situation when input prices begin to pinch.
Consumer goods maker Unilever said it will continue to introduce new brands and products to China to boost sales as the company is relying on emerging markets to deliver growth.
Unilever said on Friday it will put into use a new laundry powder plant in Meishan in Sichuan Province at the end of next year to satisfy the rising domestic demand.
Nestlé, the food group, is seeking to rapidly develop its health and wellness portfolio, a category expected to witness a substantial expansion in demand around the world.
Speaking to Bloomberg, Luis Cantarell, CEO of Nestlé Health Science, argued its products could help tackle issues like obesity. "The biggest drug in your repertoire is the food you eat three times a day, every day of your life," he said.
Major retailers and consumer goods firms are ramping up their focus on ageing shoppers around the world, reflecting the growing importance of this affluent demographic in many markets.
Aeon, the Japanese supermarket operator, opened a store for older customers in Chiba, near Tokyo, this April. It offers everything from medical clinics to calligraphy classes, alongside promising a 5 percent discount on products when it is pension day.
After affecting industrial growth and capital expenditure plans of India Inc, slowdown pangs are now reflecting in the performance of some of the leading consumer companies that are largely dependent on discretionary spends.
Though fast-moving consumer goods (FMCG) companies did not show any signs of slowdown in the June quarter and most reported robust volume growth, managements have guided for a cautious outlook for the coming quarters.
Hyderabad-based Gemini Edibles and Fats India Private Limited (GEF India), which started its operation in April 2010, is targeting a turnover of INR1,500 crore (INR15 billion, USD271.83 million) by this year-end.