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How can Young FMCG Brands Enter the Competitive Market of the Indian FMCG Sector

The fourth-largest industry in India is fast-moving consumer goods (FMCG), and it has been growing steadily over time as a result of increased disposable income, a growing young population, and growing consumer brand awareness. In India, household and personal care products account for 50 percent of FMCG sales, making this sector a significant contribution to the country’s GDP. Unlike earlier times, today online marketing has enabled both small and medium scaled brands to reach larger audiences, thereby expanding their growth.

From $110 billion in 2020, the FMCG market in India is projected to grow at a CAGR of 14.9 percent to $220 billion by 2025. Despite widespread lockdowns, the Indian FMCG business increased by 16 percent in CY21, a 9-year high, thanks to consumption-driven growth and value gain from higher product pricing, notably for basics. The market for processed foods in India is anticipated to grow from $263 billion in 2019-20 to $470 billion by 2025.

Hence, the above statistics outline the expansive and highly competitive FMCG sector as a great opportunity for young entrepreneurs and startups. Thanks to technology, new players have been inspired to enter the market by emerging brands and the rising start-up movement. It is crucial to be solid while making plans to investigate a developing market. Know what you’re getting into and how to do it before you start.

Here are some pointers for a young FMCG brand planning to enter the market:

Identify the Unmet Needs: India has a large and competitive food and beverage sector. Finding a demand that is unmet or finding a new approach to meet an existing need is the greatest strategy for succeeding in this market. Consider liquid hand soap to help you grasp the idea. Prior to its introduction, the Indian populace had no idea how important portable or sachet hand sanitizer was. The trick is to convince individuals that using a certain product would improve or simplify their lives. Similarly, when it comes to packaged goods, we never saw the need for things like buttermilk, flavor-infused milk, etc., but once they were made available to the public, there was no turning back.

Research: Both market research and consumer insight research with a data-driven approach is essential to analyze the different aspects of the market and prepare a strategy for growth and expansion. The secret to designing effective short- and long-term business plans for a firm is having a thorough grasp of the market and its customers. In the current times, there are consulting partners that offer in-depth research using primary and secondary data, which is otherwise not possible for small entrepreneurs. Primary and secondary market research and surveys are made available through both offline and online modes, thereby helping brands to understand customer behavior and perceptions. It furthermore helps in analyzing the competition in the market and staying one step ahead of the market.

A Realistic Growth Strategy: The protein that flows through the veins of the company is a growth strategy. In such situations, experienced consulting agencies play a significant part in establishing strategy based on real-world thinking, competence at the ground level, and assessment of a 360-degree market view. A strategy that seems fine on paper, fails miserably on the field, especially for a young FMCG brand that has just entered the market. In such cases consulting agencies that offer a vast array of services such as Brand Analysis based on Porter 4Ps analysis, BCG matrix, Business Growth Consulting, HR Transformation, Market Research, Business Process Engineering, etc., can prove highly beneficial.

Packaging and Branding: For the successful marketing of a product, packaging and branding are crucial. Packaging conveys a lot of information about the brand, identifying both the firm’s identity and the target market it is aiming to attract. No matter how much money you spend on the goods, only the attention it receives will help you attract new clients. Packaging is crucial in capturing the interest of potential customers. Hiring efficient and dedicated employees is the key to the growth of any brand. Ensure that the employees have prior experience and the zeal to grow which will in turn help in creating a dedicated and hardworking workforce.  For example, KitKat even after years uses silver foil packaging which has created a loyal customer base from generations earlier.

Go Online First: It is advisable for new brands to launch their products online first, helping them to understand the audience’s feedback and acceptability towards the products. This helps in establishing a strong pull psychology for the brand and so when the products go on the shelf they are easily accepted by the customers. For example, companies like Nykaa and MamaEarth started off with a soft launch and online presence. Once the brands grew, they branched out to offline stores.

Sales Staff: To make sure that there is no gap between customer wants and items to meet those needs, one just requires a small sales team. Additionally, it is essential for increasing brand loyalty among customers. Keep in mind that the transaction is not finalized until a customer place another purchase for the product.

Future of FMCG

Online portals are anticipated to be crucial for businesses looking to expand into the vicinities. The internet has significantly helped by making it easier and more affordable for businesses to expand their reach. By 2025, India’s internet user population is anticipated to reach 1 billion. By 2020, 40 percent of all FMCG purchases in India are anticipated to be conducted online. By 2030, there will be a projected 11 percent growth in the percentage of e-commerce in all FMCG sales.

Hence, the industry is on the rise and in such a scenario the new players will have to strategize their every move in a way that they can progress along with the mega FMCG brands. 


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