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Most promising distributorship opportunities in the FMCG sector

Most promising distributorship opportunities in the FMCG sector

Over the last few decades, the Fast Moving Consumer Goods industry has experienced a tremendous transformation. Presently, it is the 4th largest sector in the country. Some of the driving factors responsible for the growth of the FMCG Sector are Digitisation, increased initiatives and investments by the Government of India, growing rural market, increase in disposable income in rural India, emerging online marketplaces, and growing youth population.

The Indian FMCG market is expected to grow at a CAGR of 14.9% to reach US$ 220 billion by the year 2025, from US$ 110 billion in FY 2020. The E-commerce segment is predicted to contribute 11% to the overall FMCG sales by the year 2030.

Fast Moving Consumer Goods are known to be sold quickly and at affordable rates. There are different types of FMCGs:

  • Dairy products such as milk, butter, curd, etc.
  • Bakery items like cakes, cookies, etc.
  • Ready-to-eat meals
  • Fresh fruits and vegetables
  • Dry fruits like almonds, cashews, etc.
  • Frozen food items
  • Beverages like soft drinks, juices, energy drinks, battles water, etc.
  • Medicines
  • Cleaning products
  • Cosmetics like lipsticks, cream, and other toiletries
  • Stationery items like pens, pencils, notebooks, etc.

The government of our country has taken some great initiatives to encourage further investment in the FMCG sector and open up new avenues for foreign companies. The FMCG sector in India saw a robust foreign direct investment (FDI) inflow of $18.19 billion in 2020. This has helped the FMCG sector to form a strong supply chain, create employment opportunities, and grab high visibility for FMCG brands. In addition to this, the PLI scheme has been extremely beneficial for the sector. It helped in strengthening the production capacity and exports.

As the FMCG sector is expected to grow from strength to strength in the future, it would surely open new avenues for various businesses.

At present, some of the biggest companies in this segment are

  • Hindustan Unilever Ltd. ( HUL )
  • ITC Limited
  • Nestle India
  • Dabur India Ltd
  • Godrej Consumer Products Ltd
  • Britannia Industries Ltd
  • Tata Consumer Products Ltd
  • Marico

It is a huge and variegated market, ideal for the distribution business. Let us look into various types of distributorship options in this sector:

Conventional FCMG distributorship business

This type of distributorship business is an ideal way to get started in this FMGC domain. In this, the place of distribution is usually general shops, grocery stores, retail outlets, etc. The distributors acquire items directly from the parent company and supply these to retailers and sometimes directly to consumers. To do this business, you just need a well-furnished storage unit and an efficient transportation system.

Modern trade distributorship

Modern trade distributorship involves a much more planned and systematized approach to the distribution of goods and logistics management. It comprises supermarket chains, mini-markets, hypermarkets, and other big players.

Wholesale distributorship business

These distributors deal with wheat flour, pulses, rice, and other perishable goods. A wholesale distributor acquires these products from the source and delivers them to the wholesaler. In this FMCG distributorship opportunity, the distributor will not be directly working with retail outlets.

Institutional distributorship business

If you choose to work as an Institutional distributor, you will be delivering merchandise to multinational enterprises, railways, and other government agencies. Payment is done when the consignment is delivered. Renowned FMCG firms that supply these organizations generally choose to work with a distributor and not a retailer or wholesaler. If you have strong connections and relationships with government entities, this is the best and most profitable distributorship opportunity for you.

Super stockist distributorship business

Unlike other distributorship businesses, this usually covers rural areas. Owning a storage unit in a remote location and the best transportation will help you flourish in this business.

Interested in becoming a distributor in the FMCG sector? Get exceptional business ideas from industry experts! Register on today!


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