Prepared foods and household goods to help drive Indian FMCG consumption growth
Household spending in China, India, Mexico, Turkey and South Africa will change in comparison to the USA and UK over the next three years, says a just released study by the Economist Intelligence Unit, in association with Mintel, a leading global supplier of consumer, product and media intelligence.
The findings in the study, titled, ’Convergence with Divergence’, reveals that Consumer spending in these emerging markets is expected to grow between 7.7% and 15.2% a year between 2013 and 2016 – with India growing by over 13%.
While the world’s developed economies are still dealing with the fallout from the banking crisis of 2008, many emerging markets have seen incomes rise significantly, providing significant growth opportunities for FMCG businesses looking to enter new markets. Each market continues to differ and a need for businesses to understand their market remains integral.
Says Peter Ayton, Global Consumer Analyst at Mintel “In India, we expect to see growth in household products – with fierce brand loyalty to those companies that have invested in the wide scale distribution systems needed to reach India’s smaller towns. Furthermore, strong future growth can come from the replacement of traditional, regional dishes with packaged national products. Breakfast products provide a good example: chapattis or dosas now have to compete with cornflakes, with the latter having the added benefit of a longer shelf life suited for the bottlenecks in the Indian distribution system.”
“In India we expect total expenditure to grow around 12%. There will be a mixed bag across the categories – while beauty and personal care will remain strong, food service remains stagnant and the clothing market remains volatile. Understanding the trends – and opportunities in the market is essential for any businesses looking to invest in India in the next three years”, said Jon Copestake, Retail and Consumer Goods Analyst, at the Economist Intelligence Unit.
- Household products are expected to continue booming – particularly in washing up liquids as cheap labour supply makes servants more economical than using dishwashers
- Consumers continue to shift gradually away from home cooked food – demand for breakfast cereals is increasing as lifestyles become busier
- India is already the world’s biggest packaged tea and whisky market by volume, although spending growth potential remains in both sub-sectors.
- In the clothing market, male expenditure on clothes outstrips that of women, although this is expected to ease out in the coming years.
- Food service market shows the slowest growth with 7.4% growth per year – despite investment from multinationals.