FMCG sector likely to grow 50pc by 2012

New Delhi, July 23: The growing penchant of rural and semi-urban consumers for Fast Moving consumer Goods (FMCG) products, is likely to drive a more than 50 per cent growth in the sector, with its market size likely to touch Rs 1,06,300 crore by 2012.

The FMCG sector, which in totality is projected to grow at a Compound Annual Growth Rate (CAGR) of 10 per cent, will expand its market size to over Rs 1,06,300 crore, from the present level of Rs 60,000 crore, industry Chamber Assocham said.

Also, the urban population will develop a bigger craze for organic health products in the FMCG sector, which are not available in a large number, pushing this industry to look for a larger market size in the rural and semi-urban areas, the Chamber said.

In the rural and semi-urban areas, the FMCG market penetration is currently about 2 per cent as against its total growth rate of about 8 per cent, Assocham President Anil K Agarwal said.

The Indian rural market with its vast size and demand base offered huge opportunities, which the FMCG companies cannot afford to ignore. With 130 million households, the rural population is nearly three times its urban counterpart, Mr Agarwal said.

The FMCG products that will catch the eye of rural and semi-urban folks, will mainly comprise soaps, detergents, cold drinks, consumer durables, toothpastes, batteries, biscuits, 'namkeens', mosquito repellants, refined oil, and hair oil.

In the semi-urban areas which include townships of larger sizes, the Chamber estimates that a good number of malls will have to be put up in the next 4-5 years, which will sell large volumes of FMCG products thereby increasing their demand phenomenally.

Big brands like Nirma, HLL, Dabur, ITC, Godrej, Britannia, Coca-Cola and Pepsi will grab the major share of the growth.

The rising rural and semi-urban income levels, coupled with massive advertisement of FMCG products in the electronic media, will also play a major role in awakening the rural and semi-urban folks towards FMCG products, resulting in enlarging their affordability for them.

Assocham has suggested that to tap the rural and semi-urban market, better infrastructure facilities like roads, better telecom connectivity in rural areas, proper sanitation and healthcare facilities should be created.

UNI