India to become the world’s fifth largest consumer market by 2030:FICCI-KPMG Report

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The FICCI–KPMG report ‘Sell SMART—moving towards a SMARTer consumer market’ on the retail and FMCG sectors in India, was released by Shri Ram Vilas Paswan, Minister of Consumer Affairs, Food and Public Distribution, Government of India in Mumbai at the FICCI conference titled – MASSMERIZE 2015. The report states that consumer spending in India will rise to INR 456 trillion in 2030 from INR 83 trillion presently. It further highlights the encouraging statistic that the FMCG market is projected to touch INR6 trillion (or USD100 billion) and retail market, INR70 trillion (or USD1.2 trillion) by 2020.

“The Consumer Protection Bill is now in Parliament and we wish to see it successful,” said the minister. He said that while the government is doing whatever it can to boost production, industry must take its responsibility towards consumers seriously. “In our country, we must give people a chance,” he believed. Another point that he discussed, was the need to extend the concept of hallmarking to new industries. He expressed his wish that Indian manufacturers would boost production both qualitatively and quantitatively, so as to be able to compete successfully in international markets. Thanking FICCI for its efforts, he likened the organization to the cement that is such an essential ingredient for any industry. “FICCI is like the cement that brings the industry, consumers and the government together,” he said.

According to the data-intensive report, India will become the fifth largest consumer market in the world by 2030. Such optimism is well founded and makes India attractive to Fast Moving Consumer Goods (FMCG) firms and retailers, but challenges remain. Amongst the key challenges are poor basic infrastructure, a complex multi-layer regulatory and the taxation regime.

Discussing the report, Rajat Wahi, Partner and Head, Consumer Markets, KPMG in India, said, “The report has incorporated extensive discussions with senior stakeholders of the retail and FMCG sectors and has tried to present an all-encompassing view of the opportunities and issues present before these sectors. Retail and FMCG sectors possess a tremendous growth potential. It is very important that the challenges faced by these sectors are collectively addressed by the industry stakeholders, so as to enable them to maximise the opportunities and at the same time ensure that consumers have access to good quality products that are affordable and are responsibly manufactured.”
Additionally the report reveals that emerging fields in the technology sector ranging from precision farming to data analytics have the potential to increase the efficiency of businesses significantly, providing more opportunities for the FMCG and retail sectors.

Speaking at the launch of the report, FICCI Retail & Internal Trade Committee Chairman, Mr Krish Iyer said, “This report brilliantly captures all the factors that are going to play a critical role in shaping the growth of companies in Retail & FMCG sectors over the next decade & further. The good news is that the government has started many initiatives besides ‘Make in India’ such as – ‘Skill India’ to address the issue of skill shortage, ‘Smart Cities’ to cope with the challenge of growing urbanization, ‘Digital India’ to strengthen digital infrastructure & delivering services digitally among others – that address some of the challenges being faced by the FMCG and retail sectors. The government’s encouragement & support to the entrepreneurs is very inspiring and this focus on ‘Start Up India’ will drive significant economic growth in the country. However, challenges continue to remain including some that are specific to these sectors. These challenges have been covered under five key themes in Massmerize 2015 – sustaining growth and competitiveness, make in India, authenticity of products, responsible business, and technology and innovation, which form the rather apt acronym ‘SMART’.”

While expounding on each of these themes, the report presents interesting company case studies including discussions with senior stakeholders of the FMCG and retail sectors in India, thus offering a comprehensive view of the opportunities and issues in the sectors.

The ‘Make in India’ programme, a crucial discussion point in this report, has the potential to increase the exports of packaged FMCG products while countering the increase in imports. Export-oriented food and agri parks, as well as incentives for global FMCG manufacturers to set up greenfield projects would help in making India a regional FMCG manufacturing hub for South Asia, Middle East and Africa.

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