The FMCG Market

FMCG

What is the FMCG market? Fast Moving Consumer Goods (FMCG) is defined as units of items that are sold quickly and at reasonably good prices. The term FMCGs refers to those retail goods that are commonly replaced or fully used up over a relatively short period. This contrasts with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several years. Products are the type where they are generally sold at supermarkets, that we use every day, but cheap electronics and over-the-counter products are now being included. The term “fast moving” gets used as they bought regularly and used up rapidly.

Longer lasting products like furniture are not characterised under this category as you generally only replace these products every few years.  They are normally small items and get sold in large quantities at low costs. Typically, a lower amount of profit is made on each individual FMCG that is sold, but the constant demand helps to produce volume sales that help to create a healthy cumulative profit on all units sold within a given period. There are a number of retail products that fit this basic profile, with many of the items found in just about every home around the world.

FMCG don’t have a big shelf span. This is because the products have a high customer demand or because the product has an expiry date. Food products are highly perishable but move through a store very quickly. Other goods such as alcohol, toiletries, pre-packaged foods, soft drinks and cleaning products have high turnover rates. Cleaning and laundry products, over the counter medicines, personal care items and food stuffs make up a large bulk of the goods in the FMCG arena. Non-traditional health aids such as vitamin and herbal supplements would also be classified as a FMCG. Consumer electronics are considered a sub-classification of a FMCG. Known as Fast Moving Consumer Electronics, or FMCEs, items like cameras, computers, and cell phones are excellent examples of non-durable goods within this category.  These types of units get replaced fairly quickly by more technological advanced products.

The one way you can tell that a product is truly is a FMCG is that it is non-durable. There is a continuous need for these types of products and it makes sense to produce there products on a mass scale. Pre-packaged foods are a good example of this statement. The food is purchased, then consumed within a relatively short time and then the consumers return to a retail outlet to purchase more of the pre-packaged food when desired.

The top FMCG companies are known by their capacity to create the products that are in highest demand by consumers.

Product Characteristics

Products belonging to the FMCG segment generally have the following characteristics:

  • They are used at least once a month
  • They are used directly by the end-consumer
  • They are non-durable
  • They are sold in packaged form
  • They are branded
  • Industry Segments

The main segments of the FMCG sector are:

Personal Care: oral care; hair care; skin care; personal wash (soaps); cosmetics and toiletries; deodorants; perfumes; paper products (tissues, diapers, sanitary); shoe care.

Household Care: fabric wash (laundry soaps and synthetic detergents); household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish and furniture polish).

Branded and Packaged Food and Beverages: health beverages; soft drinks; staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates; ice cream; tea; coffee; processed fruits, vegetables and meat; dairy products; bottled water; branded flour; branded rice; branded sugar; juices etc.

Spirits and Tobacco: There are many different types of these products.

Source

Wikipedia.com

Wisegeek.com