The Indian FMCG market experienced 16% growth during the fiscal 2007-08 despite unfavorable conditions.

According to the Federation of Indian Chambers of Commerce and Industry (FICCI) survey, the Indian Fast Moving Consumer Goods (FMCG) market experienced 16% growth from April 2007 to February 2008, as reported by Business Line.

The FICCI survey revealed that the Indian FMCG industry experienced amounted to Rs.7,465 Billion during fiscal 2007-08. Surprisingly, the industry grew in the backdrop of spiraling prices and rising input costs in various products, particularly in petroleum and packaging materials.

The growth in the Indian FMCG industry is largely attributed to rising demand, fiscal benefits and good show up by the leading companies, which have manufacturing units in tax-exempt areas. Consequently, the input costs declined and with that, the prices of FMCG products, thus turning up the FMCG sales during 2007-08. In addition, changing consumer behavior with regard to luxury goods are also taken as necessities. Higher disposable income is making expenditure on lifestyle products affordable, which, in turn, is spurting growth in the FMCG products.

On the other side, consumers are also partly responsible for boost in the FMCG products sale in the last fiscal as they are giving preference to the value-added and aspirational products like anti-ageing solutions. Hence, FMCG products experienced growth in value terms. Besides, the Indian rural regions too are witnessing change in lifestyle, further pushing up the FMCG sales.

According to industry experts, boom in the retail industry has forced the FMCG companies to work upon their existing strategies and cooperate with retail giants for sales promotion. Apart from this, current growth rate in the FMCG industry will help the FMCG companies to maintain the same growth rate in the last quarter of 2008.

According to the Senior Research Analyst at RNCOS, “On account of current growth rate in the Indian FMCG market, there are enormous growth opportunities for consumers and companies in the market. Hence, growth opportunities in the Indian rural landscape for the retailers are vast.”