FMCG sector is focusing on the growing middle class and capturing the market share by offering the premium products and further innovations. Brands like Dabur and Nestle have already target at this time to drive high margin products while Unilever has also join the trend by revamping its various branch Vim and Pond’s.
Increasing disposable income of this particular category of people and E-Commerce growth has motivated the companies to enter into fierce competition to capture the growing middle class market. Many of the products sold by global giants like Dabur and Nestle are mass-market items.The increasing growth for demand is motivating the producers to produce various types of goods with customisations in order to meet the needs of of this particular segment of customers.
WHY FMCG FIRMS ARE TARGETING THIS SECTOR?
Firms are upgrading their products and restructuring their way of presentation in order to give it a premium touch and make it more sustainable to co-ordinate with the mind set of these kind of customers.Even top FMCG players like HUL have Revenge 2 of their most important core brands Vim and Pond’s within their June quarter keeping this in mind.
Now talking about the mind set of the people,these particular kind of consumers have shifted from saving to spending mindset.The product strategy of Parle is different and is trying to price their products at lower per unit price in order to capture wider market share.The Vice president of the firm, Mayank Shah, mentioned that offering small unit packs enables consumers to experiment with products they might not otherwise purchase, as well as helps attract more individuals to premium products. N. Chandrasekaran, chairman of Tata Consumer Products, highlighted that India’s middle class is projected to expand from around 30% to 50% of the population by 2030, representing a potential market of 300 million new consumers.
One of the reasons behind the increasing disposable income in the growing middle class could be the participation of women in workforce, augmenting household income and thus leading to a higher disposable income thereby.Adani wilmar is focusing on regionalisation, and attempting to cattle the local market needs through regionalisation.To quote as an example for the same, the brand has launched variants of pickle in Bihar is now trying to introduce premium variations as a part of their strategy.
In conclusion, it is right to say that the major driving force behind FMCG sector is not the High Class income people but the growing middle class and especially the rural sector.Companies are trying to exploit the market share in both the sectors by providing them low unit price products and high quality variants at an affordable range in order to capitalise through large volume of sales.
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