The report provides executives’ opinion on business trends and market outlook. It highlights key business activities, supplier price variations, changes in capital expenditure and organizations’ perspective on e-procurement. In addition, this report presents the future projection of merger and acquisition activities within the FMCG industry over the next six months.
The unpredictable future of the FMCG will not thwart the growth of FMCG industry due to focus on innovations and survival of the fittest conditions. The firms have to keep adapting to the competitive conditions by enhancing the existing customer base, making a persistent effort to introduce new products and working on the lines of Kaizen technique of making continuous improvements in the current scenario. The following figure summarizes the same.
Figure: Expected Trends in Global FMCG Industry
‘FMCG Industry Business Outlook and Procurement Survey H1 2016’ highlights business perspectives and procurement activities for the period spanning from April 2016 to September 2016. It underlines supplier price fluctuations, main operational priorities, firm’s take on procurement using digitalization techniques and the expected alterations in capital expenditure. Furthermore, it puts forward the prognosis of vertical and horizontal mergers and acquisitions within the FMCG industry for the coming time period of six months.
Fast-moving consumer goods are the goods that are traded very frequently leading to high volume, low price because of repeated purchases and are fastest to leave the supermarket or hypermarket shelves. It is a market that is highly sensitive to changes in disposable income or in other words, very demand elastic. They may be categorized as durable and non-durable when classified according to their shelf life such as detergents, cosmetics, packaged foods, personal hygiene products, stationery, toiletries etc. Packaging and branding is imperative to the FMCG products as it is an important element for positioning the product correctly in the minds of the buyer. It signifies the social and economic status of the buyer and gives him something to relate to. The following figure gives the forecast for retail market sales growth for consumer goods to be expected in 2016-17.
The market for FMCG products can be safely assumed to be stable in countries where there are no severe fluctuations in the per capita disposable incomes. These can be provided only for highly developed nations like the UK and the US and these are expected to emerge as prominent targets for the same reasons. Some of the management executives of big FMCG brands expect the supplier price to soar in the coming time periods but 22% of them choose to remain on the risk averse side expecting no change to occur. The optimistic ones are leaving no stones unturned and are striving to introduce new launches in the market to tap more of the niche customers, spending more on capital goods to enhance manufacturing capabilities and henceforth drive the forecast of continuous growth prospects in the FMCG industry.
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Ankur Gupta, Head Marketing & Communications