SWOT Analysis of FMCG Sector

Sector Outlook

FMCG is the fourth largest sector in the Indian Economy with a total market size of Rs. 60,000 crores. FMCG sector generates 5% of total factory employment in the country and is creating employment for three million people, especially in small towns and rural India.

Analysis of FMCG Sector 

Strengths:

1.Low operational costs

2. Presence of established distribution networks in both urban and rural areas

3. Presence of well-known brands in FMCG sector.

Weaknesses:
1. Lower scope of investing in technology and achieving economies of scale, especially in small sectors

2. Low exports levels

3. "Me-too" products, which illegally mimic the labels of the established brands. These products narrow the scope of FMCG products in rural and semi-urban market.

Opportunities:
1. Untapped rural market

2. Rising income levels, i.e. increase in purchasing power of consumers

3. Large domestic market- a population of over one billion.

4. Export potential

5. High consumer goods spending.

Threats:
1. Removal of import restrictions resulting in replacing of domestic brands

2. Slowdown in rural demand

3. Tax and regulatory structure.