Opportunities for MSMEs in FMCG Industry in India

Opportunities for MSMEs in FMCG Industry

Fast moving consumer goods (FMCG), also known as consumer packed goods, are non-durable products that are used by customers frequently on a day-to-day basis. Some of the examples of FMCG products include processed foods, soft drinks, cosmetics, household cleaning products, etc. These products are generally available at relatively low cost when compared to durable products like home appliances, automobiles, consumer electronics, etc.

FMCG Market in India

The FMCG industry is the fourth-largest industry in the Indian economy. The FMCG market in India is expected to become USD 220 billion by 2025 from USD 110 billion in 2020. The FMCG market in India is primarily driven by household and personal care which account for 50% of the revenue of the industry. Rising income levels, changing lifestyles, growing awareness, fashion trends, easier access to the products are some of the factors contributing to the growth of the market.

Growing Urban Markets

The urban areas contribute to over 60% of the FMCG market in India. Urban India has largely contributed to the growth of the FMCG market in the country over the past decade. Particularly in the urban areas, there has been a shift in the purchase pattern of people over the past few years towards premium products from essential goods. This in turn led to the rapid growth of FMCG sales in urban India. With more and more people moving to cities and towns from rural areas, the demand for FMCG products is only going to increase in the urban areas in the future. 

Untapped Rural Markets

While urban areas account for the major portion of the FMCG market, the market in rural areas is growing at a rapid pace. The growth rate of the FMCG market in rural areas is more than that of the growth rate of urban areas in India. Rural India with more than 65% of the population contributes to around 45% of the FMCG market. This signifies the relatively untapped market in the rural areas of India. 

FMCG Business Opportunities for MSMEs

Considering the extent of the products in the FMCG industry such as food, beverage, healthcare, cosmetics and household, the industry offers immense business to MSMEs in India. Especially, the food processing sector for which the investment required is comparatively less is the best segment to choose for small entrepreneurs with limited financial resources. Entrepreneurs interested in setting up food-related FMCG industry can setup their processing units in the government-designated agro-processing clusters, which help cut down the plant setup costs.  Apart from this, there are several other schemes such as Production-linked Incentive (PLI) Scheme, Entrepreneurship and Skill Development Programme, Pradhan Mantri Kisan SAMPADA Yojana, etc. from which entrepreneurs can avail benefits to set up FMCG unit.

With the growing online retail, the opportunities for small and medium scale businesses are increasing in the FMCG industry. With the advent of online retail and e-commerce, FMCG businesses are able to market and sell their products across the country without investing much in marketing activities. As the production cost in India is less when compared with that of many western countries, Indian MSMEs have huge scope in the global market for exports.      

Trending FMCG Business Ideas

Here is the FMCG products list that can help entrepreneurs looking for business ideas:

  • Vacuum fried chips  
  • Millet-based products  
  • Biscuit making
  • Nutritional bars
  • Noodles
  • Honey processing
  • Grooming products
  • Soaps, toiletries and detergents   
  • Baby care products

Register Now

If you are planning to enter into the FMCG industry and looking for the potential sub-sectors and FMCG product business ideas to move ahead, then kindly register with SolutionBuggy. We provide you access to trusted and verified FMCG consultants who can help you in starting the FMCG business. We offer a wide range of services right from product identification, market research, product development, funding and plant setup to certifications, approvals, business development and supply chain management. Till date, with a network of 400+ FMCG consultants, we have successfully completed more than 800 consulting projects in the FMCG industry across the country.

FMCG is the fourth-largest industry in the Indian economy. The FMCG market is expected to become USD 220 billion by 2025 from USD 110 billion in 2020. 

Various subsectors in the FMCG industry are food, beverages, healthcare, household, personal care, etc.

As the investment required to start the FMCG industry is low, it offers a lot of opportunities to MSMEs.  

You can start an FMCG industry with a minimum investment of INR 20-30 lakhs.

Some of the trending FMCG business ideas are vacuum fried chips, millet-based products, nutritional bars, grooming products, baby care products, etc. 

Leave A Comment

Download brief market analysis on semiconductor manufacturing