There is such a huge opportunity in Indian retail and fast moving consumer goods (FMCG) that there is no need for players to fight for their share of the pie. Instead, the focus should be to grow this pie, which is small today, and to unlock a closed market, according to Nitin Paranjpe, CEO and Managing Director of Hindustan Unilever.
He was speaking at the National Retail and FMCG summit, organised by the Confederation of Indian Industry (CII). Speaking on the Indian buyer, Mr. Paranjpe said, “the same person who will spend Rs.2,000 on a lavish cinema experience will also be seen fighting to save Rs.10 at a grocer.
“To understand this behaviour, we need to understand the difference between a shopper and a consumer. They are no longer the same. Both have a unique mission and behaviour that is diametrically different.”
A report, ‘The Tiger Roars' by the CII and the Boston Consulting Group was released and it estimated that total consumption expenditure, at $991 billion in 2010, is expected to grow to nearly $3.6 trillion in 2020. Food, housing and consumer durables as well as transport and communications are expected to be the Top 3 categories, accounting for 65 per cent of consumption in 2020.
The professional affluent are expected to dominate consumption in 2020. By contrast, spending by struggler households will decline from 26 per cent in 2010 to 11 per cent in 2020.
Manu Anand, Chairman and CEO, PepsiCo — India Region, said, “Almost every FMCG company has been riding the waves of growth in the last 20 years and it won't be any different in future. The winners, however, will innovate more complex but significantly insightful models and use technology to create flexible supply chain, innovative products and communication ideas and satisfy even more consumer requirements. Together with this, government has to create an enabling environment and tackle a number of urban issues for the industry to truly reach its potential.”
