FMCG segments fail to entice Indians

Though India is one of the emerging economies and figures among the most promising consumer markets in the world, the country lags behind its Asian counterparts in consumption levels in several FMCG categories, according to surveys by market research firms.

China, for example, overtakes India in detergent, shampoo and toothpaste categories. To the solace of Indians, the country is equal to China, another emerging economy, in categories such as skincare and deodorants.

In the oral care category, Indian consumers are far behind the Chinese and Malaysians in consumption of toothpaste. Industry analysts said this was due to the use of traditional dental care products such as neem twigs and salt still prevalent in the rural India. Besides, percentage of consumers, who brush twice-a-day in the country, is low. In India, only 7 per cent of consumers brush their teeth twice a day compared with 61 per cent in China and 86 per cent in Malaysia. 
 

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Country	Category	Per capita spend/  consumption
India	Toothpaste	92 gm
China	Toothpaste	219 gm
Malaysia	Toothpaste	285 gm
India	Soft drinks	8 servings/yr
Pakistan	Soft drinks	24 servings/yr
India	Detergents	$1.40
Indonesia	Detergents	$1.90
China	Detergents	$2.20
India	Shampoo	$0.30
China	Shampoo	$1.00
Indonesia	Shampoo	$1.10
India	Skincare	$0.30
China	Skincare	$0.30
Indonesia	Skincare	$0.80
India	Ice-cream	$0.20
Indonesia	Ice-cream	$0.90
China	Ice-cream	$2.80

The picture is no different when it comes to beverages too, with traditional beverages taking a toll on the consumption of the branded ready-to-drink beverages industry. Interestingly, Indians still prefer traditional drinks such as lassi and sharbat, said industry players.

However, leading beverage companies are unfazed. A Coca-Cola executive said, "If one looks at beverage industry reports, consumers in India drink 120 billion litres of beverages. Of which, only 4 per cent are ready-to-drink packaged beverages. This shows that there is tremendous scope for growth."

In the detergents category, the gap between India and the others is not so wide. India has high consumption levels in washing powders with 86.1 per cent penetration levels among other categories. However, when compared to China and Indonesia, it is still low.

According to Amita Shetye, director client services, AC Nielsen, washing powders, biscuits, tea and toilet soaps have higher per capita consumption in India. She said the young population with rising income is expected to push the consumption levels in categories such as skincare. She added that the country is showing signs of sustainable growth.

A spokesperson of FMCG major Hindustan Unilever said as the Indian market evolves consumer needs will get boosted by the increasing spending power and growth of modern trade in food and home and personal care categories.

To meet this end, increasing the distribution and availability of products to the rural middle class will prove to be a key factor, said Shetye.