The Indian fast moving consumer goods industry (FMCG) is undergoing a continuous transition. Much of the transition is taking place on account of the growing Indian middle class and their rising purchasing power. Initially, the Indian consumer lapped up all that was offered by local subsidiaries of global consumer product majors as these companies revolutionized the market with more brands and advertising blitz.
However, as the initial euphoria died down, the Indian consumer became more demanding and sophisticated. It wanted more for less. Thus the companies adopted the ‘value for money’ proposition and tried to lure consumers through freebies and contests. However, these were only subtle changes in the FMCG companies thinking.
In the background however, FMCG companies were slowly changing tack to explore new ways to lure the consumers. Their spends on market research increased. The research came up with facts, which have been more or less known to the consuming world that increasingly buying decisions are being taken more by women than by the men.
Be it rural India or the urban world, women are the key decision makers in buying what’s on offer. And this trend is not limited to smaller consumer products alone. It is equally true for big-ticket items like consumer durables. This fact is true for global markets also, given the fact that traditionally women are looked upon as ‘home-makers’. This ‘growing girl power’ encouraged companies to concentrate on targeting the fairer sex through specific ad blitz’s, even where the end consumer is not a woman. Be it the decision to buy stuff for kids or for that matter a white good, it is women who have played a pivotal role.
Rural FMCG market will boom
* Projections ** annual growth rates componunded for last five years
Source: Business Intelligence Unit and NCAER
|(figures in Rs m)
||(urban + rural)
|Body talcum powder
|Hair oil / cream
The woman’s influence on the buying pattern has grown significantly in the last few years as literacy levels are on the rise. The increased penetration of satellite and cable television has made women more aware of what is on offer in the market place. Because of the rise in literacy levels, the number of economically independent women is also steadily moving up. This means a rise in the double income families.
Not only are women increasingly influencing buying decisions they are also turning out to be one of the fastest growing consumer category. Realising the latent demand from the growing mass of economically strong women, FMCG companies are competing hard with each other to cater to their needs. Infact, these companies are increasing their exposure to women related products.
One of the primary examples of this is the Indian cosmetic segment. Gone are the days this segment was largely identified with Lakme, Ponds and a host of locally made creams. International bigwigs like Revlon, Avon, Estee Lauder, Christian Dior and J. K. Helen Curtis are all vying with each other to capture the Indian ladies imagination. What is interesting to note is that all these fashion powerhouses have presence in a country with a per capita income estimated at US$ 400. This is probably because the Indian skin-care market estimated to be Rs 7 billion (US$ 151 million) is growing at a significant 22 percent per annum.
The Indian per capita consumption levels of women related products are among the lowest in the world and therefore, provides an opportunity for companies. For example, in the feminine care segment (read sanitary napkins) only about 1.5 per 1,000 women use the product, which is quite low compared to the developed world average. In light of this companies see more opportunities for products related to women.
Out of the current Indian population of approximately 1 billion, around 48 percent comprise women. Out of this 480 million women, around 35 percent (168 million) are in the age group below 15 years of age. As the economic plight of the Indian women alleviates and awareness levels increase, particularly in rural India, the FMCG players reckon they could capture a large portion of the ladies below 15 years as potential life long consumers.
This is probably the picture many FMCG companies are seeing and hence the gearing up to capture their share of the pie.