Experts Agree On Consumer Goods Sectors Turnaround, Differ On Timing

Mumbai, Nov 16: | Updated: Nov 17 2003, 05:30am hrs
There is general agreement among industry players and veterans that the past couple of years have been sluggish for the fast-moving consumer goods (FMCG) sector. However, a turnaround is clearly in sight.

Johnson & Johnson managing director NK Ambwani said that with a good monsoon this year, the future looks brighter. The rural segment contributes to about 30-40 per cent of the FMCG sales and thus a turnaround is expected in the third or fourth quarter of this year.

Mr Ambwani is on the organising committee of the 2nd National FMCG Conclave organised by the Confederation of Indian Industry (CII) in Mumbai on November 18 and 19, 2003. It will be held under the auspices of CII FMCG-sub committee. The new format involves debate in the form of point and counterpoint which is expected to be more provocative. Godrej Consumer Products Ltd executive director and president HK Press hopes that the conclave will generate a lot of heat and possibly some light!

Vivek Sharma of Leo Burnett differs on the timing of the turnaround of the FMCG industry. He felt that this will materialise in the middle of next year. He added, It takes time for the trickle down effect of the monsoon to reach this sector. Now that the economy is looking up, the FMCG players should gear up to benefit from the rally that is in the making.

Mr Press felt that the pick-up in FMCG demand will occur around December 2003, with more disposable incomes in rural pockets. That will make it possible for consumers to spend on FMCG, while at present a lot of money is said to be going into durables. Mr Ambwani said that if the companies offer better value, there can be a high single-digit growth or even a double-digit growth.

Mr Ambwani added that the first national FMCG Conclave held last year was very successful with all the relevant topics being covered. The organisers had tried to get speakers from the real world who shared their success stories. This year, the objective is to focus on key issues like brand- building and importance of pricing policy.

Mr Sharma added that the conclave will help participants to take strategic decisions. The extreme viewpoints from experts will help in making the right choices. It will provide a platform for debate and solutions. Mr Press said that the conclave is contemporary and full of young speakers.

Mr Ambwani opined that powerful brands are available for Indian consumers who also seek value along with the brand name.

Mr Sharma added that both, Indian and foreign companies, have done well in branding in spite of the widespread illiteracy in certain parts of the country. For instance, brands like Dabur, Coca-Cola and Cadbury are identified by almost everybody.

The conclave will debate on the usefulness of brand-building in the Indian context and provide further insights.

The judicious use of components of a marketing mix is another crucial issue, and Mr Ambwani felt that the Indian market is very complicated with many languages, customs and regions.