THE REAL SURPRISE IN THE FMCG SECTOR

FMCG sector (FMCG) sector, also known as consumer packaged goods (CPG) is forecast to nearly double the value in the next ten years, from about 8,000 cabinets up to 14,000 USD 2014 billion in 2025. That equivalent to predict there will be about 81 corporations like Kellogg in the next decade. The industry increasingly fierce competition, especially in BRICs as Brazil, Russia, India, China. Companies in this sector have managed to like?

Three unexpected truth

The McKinsey has studied the market of more than 2,600 cities in the world and turned out almost exactly what was wrong all along.

First, the US and Western Europe are not all capable of growth. Most companies believe that this is only CPG market distribution system struggles to maintain market share. But not so. Not just growth, but the market in many cities in the US and Western Europe is growing fast is not inferior to the emerging markets. Ignoring these markets, the company CPG missed opportunities at home. According to research, the industry as anti-aging cream, beverages, mineral water, … will grow twice the current level of spending.

Secondly, these new brands joining the facility did not have enough financial firm faces a mistake to assume that it is too late to enter into the Chinese market or India, due to stiff competition. Actually, if they choose the main city to be present, the ability to dominate their market will expand. With these sectors have requirements on lower minimum scale, the market just joined in these markets alone (in some major cities) can also bring revenue equivalent to the coverage on Nationwide in other emerging markets – even higher. For example, the juice industry, particularly in Shanghai, will grow at three times the size of the market and more than the Malaysian market.

Moreover, many cities in China and India are modernizing infrastructure and retail distribution, makes this market penetration of less complex in the rural area.

Thirdly, the fact completely the opposite of what they have long believed, that consumers in emerging markets will not buy high-end products. The fact is, in the large cities of developing countries, higher per capita income levels equal to or even higher than similar cities in North America or Europe. The structure of the needs of local people in the city are also equivalent and similar growing needs in cities in developed countries. Products such as high-end cosmetics, infant toys, pet food … The company can meet the demands of this rapidly soon will be positioned as the leader market direction, even create momentum for other needs. A typical example is P & G infiltrated China with products diapers children when markets were only accustomed to using cloth diapers, has instantly become the brand is the first choice and quickly served as the user segments such goods in China.

Develop strategies for the micro market

From the results of the report, the researchers have suggested a different approach to the market and developing countries (especially the BRICS group) – to gain market share equal to or greater than the national market other. One example is the study of the city with average size with a population of between 20000-50000 people in Brazil, but the average growth rate of 7.5% annually and bring the equivalent expenditure about half the total expenditure of the entire population of Brazil. As sunscreen industry or baked products also can bring growth rates double or tooth rise to 50% respectively. Meanwhile, in India, the market growth will come from the urban areas – are concentrated in the 70 most populous cities – accounting for about 1/7 of the population contributing sales of over 1 / 4 for a total value of this sector from 2014-2025 drinks.

So to penetrate this market, experts suggest the problems that corporations CPG offering is as follows:

1. Analysis of hot spots: the top 100 leading city that we should build presence to achieve growth ambitions are the city?

2. Select a product category: the main branch and the side with the largest growth potential in that city?

3. Check the market: market conditions particular we expect?

4. Allocation of resources: the geographic area should be allocated more resources to ensure our future growth?

For the poo in the developed countries where the market has more coverage and lower growth potential, the following questions are important:

Preliminary data analysis: the city or the niche market that has the best growth opportunities for our products?
Check presence “How strong we are when present in high-growth areas?
Market positioning: high growth in certain areas of our market share is below average?
Resource allocation: bureaucracy we have to reallocate the investments and manpower for the industry the highest growth area yet?
Answering these questions can provide the basis for decisions on the product portfolio, market costs, labor and putting the production plant or distribution center for training CPG Corporation.