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Why You Should Venture in FMCG Industry?

If you are planning to buy or invest in a business then you should look out for the FMCG industry as there are myriad potential investment opportunities.
BY Akshay Arora
Feature Writer, BusinessEx
Dec 29,2017

Fast Moving Consumer Goods industry is actually moving rapidly towards growth and is the fourth largest sector contributing to countrys economy. This sector is whooping with business opportunities that one can plan to invest in. In this industry, the most common business opportunities are the sale of consumer goods that are needed on daily basis like beverages, drugs, packaged food, etc.

If you are planning to venture in this sector then you will need to create your own network with a supplier, distributor, manufacturer, etc but starting up is not the best idea as you have the option to buy a running business. It is hard to create a business network and is time-consuming so the best option is to buy a running business from online networking portal like BusinessEx and start your business now. Lets first see why this industry is a good potential investment opportunity.

Current Trends of FMCG Sector

  • According to IBEF report, the FMCG sector is pegged to touch $103.7 billion by 2020 while in 2016 it was $49 billion. The report further adds that the market is growing at a CAGR of 20.6 per cent but the rural market in India shows CAGR of 14.6 per cent and is projected to reach $220 billion by 2025 from $29.4 billion in 2016.
  • The report reveals that the demand is increasing more in rural areas but urban areas account for a revenue share of 40 per cent from the total revenue of FMCG sector of the country.
  • After the launch of Goods and Service Tax (GST) by Government of India the FMCG industry has benefitted due to falling in taxes on daily consumable products. For example, sugar, edible oil, normal tea and coffee will attract a GST rate of 5 percent from the previous rate of 4-6 per cent while toothpaste, hair oil and soap will attract 18 per cent which lower from the previous rate of 23-24 per cent.

Acquisitions in FMCG Sector

  • In October, tea-producer Goodricke Group came acquired eight tea brands of Godfrey Phillips India for Rs.20 crore.
  • In November, South Korea Lotte confectionery buys Gujarat-based Havmor ice-cream business for Rs 1020 crore.
  • In November, Private Equity firm Devonshire Capital acquired 51 per cent stake of Ruchi Soya Industries and also plan to invest Rs.4,000 crore in companys packaged oil distribution business.
  • FMCG Company Emami, the owner of male grooming brand The Man Company has acquired 30 per cent stake in Helios Lifestyle. The company big brands are Fair and Handsome and HE.

How to find the right business opportunity?

The FMCG industry is itself divided into three segments which are food products, healthcare products and personal care products. You dont have to limit yourself in this industry as you can open a daily need store or cosmetic shop, distribution business, manufacturing business, etc as everything comes in FMCG sector and everything is linked up to one another. If you want to venture into this industry then you should have a clear view of what type of business you want to venture in, where you want to start and how much you can invest. After deciding this then you can go to an online business marketplace like BusinessEx to find the right business opportunity according to your needs.

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