Wednesday, May 18, 2022

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    Future Prospects of FMCG Sector

    Any economy consists of three major activities production, Consumption, and Distribution. India resides in Villages that have immense potential in terms of capital, customer base, employment generation, etc. With such diverse Indian markets, it becomes a challenge to produce multiline products for a large population. Currently, in the covid times, priority activity in the economy is the consumption of eatables, healthcare range, household, and personal care range.  All these come under the Fast-Moving Consumer Goods sector of India.

    FMCG sector accounts for the fourth largest sector of India and contributes. These goods have limited shelf life, high utility, and can be produced at a low cost. Some of the major players of this sector are Hindustan Unilever Limited, ITC Limited, Nestle India, Britannia Industries, and Marico. HUL, the oldest FMCG company has a market capitalization of Rs.545762.50 Crore. 

    This year the FMCG sector has been performing positively year by year.  Covid-19 hit the country in 2019 causing tremendous loss to the manufacturing industry and numerous lockdowns. The customer base comes from more than 50% of the Urban users. The year 2020 was spent in lockdown and e-commerce business. Instead of purchasing from the stores, people preferred online stores for safety and security. Leading the way and coping up with vaccines, in-store shopping has gained momentum resulting in increased sales. 

    Apart from this regular dividend incomes and bonus shares make it a much better option for investment. The last year proved to be an opportunity for the FMCG sector to grow and expand. Hence, this sector turns out to be a blue-chip sector.

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