Indian FMCG: 'GEM' in focus!

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Indian FMCG: 'GEM' in focus!

With developed economies still in the grips of the slowdown, the search for future markets has taken Indian FMCG companies to the Global Emerging Middle (GEM) nations. Nations which are home to the ''next four billion''— that is, a large and emerging consumer base on whom companies can bank on. CNBC-TV18’s Farah Bookwala and Priyanka Ghosh report.

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With developed economies still in the grips of the slowdown, the search for future markets has taken Indian FMCG companies to the Global Emerging Middle (GEM) nations. Nations which are home to the ''next four billion''- that is, a large and emerging consumer base on whom companies can bank on. CNBC-TV18's Farah Bookwala and Priyanka Ghosh report.

Godrej in Chile, Marico in Vietnam -the number of Indian FMCG companies investing in less developed markets is growing. The reason? These are the markets of the future-the Global Emerging Middle as termed by consulting firm PwC.

The new GEM includes countries like India, China, Indonesia, North African countries like Nigeria, and Latin America. That accounts for nearly four billion of the world's population.

PwC expects purchasing power of these geographies to jump from the current USD 2.7 trillion to USD 6 trillion by 2021, with the Indian FMCG segment set to contribute atleast USD 300 billion.

Shashank Tripathi, executive director of PwC says, "There is more of action in the business model where they can penetrate the sector much more by taking strategies."

However, this is not going to be an easy ride for Indian FMCG majors. Innovative brand building is the need of the hour
 
Tripathi says, "Brand is a challenge. The trust they have established traditionally has been only through mediums like television or advertising. They need to go through new channels like mobiles, telephones. Others which are more related to bit of word of mouth, local advertising where they actually need to go to the ground level and may be work in a more organised way with the unorganised sector."

Indian companies have optimised the first mover advantage so far. But the USD 6 trillion opportunity that the GEM market throws up is also set to help Indian companies channel new growth areas in sectors such as pharma and healthcare, telecom, retail and industrial goods.