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ORG-MARG study on FMCG throws up surprises

10-February-2001
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ORG-MARG study on FMCG throws up surprises

The latest findings of an ORG-MARG study on the FMCG sector has thrown up a mixed bag of surprises. FMCGs sector registered an 8 per cent value growth over 1999. In absolute value terms, the category clocked in sales of Rs 4,27,000 crore in 2000, against the previous year's Rs 3,96,000 crore. Per capita consumption also rose from Rs 394 in 1999 to Rs 415 in 2000.

The ORG study indicates that growth in FMCGs was driven primarily by the rural segment. While growth in urban areas has more than doubled from 5.9 per cent in 1999 to 11.9 per cent in 2000, growth in rural markets has risen from 4.5 per cent to 7.8 per cent. The factors that led to the growth include higher average household income in rural and urban areas, along with increased media penetration and dealer presence.

However, on the downside, there was a marginal decline in literacy rates in rural areas and a slender increase in urban areas.

Interestingly, lifestyle and convenience-oriented products have influenced growth in the overall FMCG segment, but packaged grocery, lighting and household care are three areas which ranked low in the consumer's shopping list. The biggest gainers were cooking medium, hair-care and personal care products for women. Food product registered a marginal increase from 7.1 per cent in 1999 to 8.1 per cent last year.

According to the ORG-MARG study, distribution, volumes and price have been key growth drivers in the FMCG sector last year.

While prickly heat powder, perfumes and deosprays have shown appreciable growth, categories which grew negligibly were toothbrushes, toilet soap and toothpowder. In rural markets, while lipsticks have grown by value, skin creams appear to have grown in volumes. Rural men, in contrast, seem to have a high affinity towards aftershave lotions. Shaving rounds and shaving creams are not high in their priority.

In urban areas, growth of personal-care products for men and women has been largely value-led, rather than influenced by growth in volumes.

MNCs and Indian companies were neck-to-neck in terms of percentage share in the total FMCG pie, but value growth of Indian companies was much higher than their foreign counterparts.

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