India’s market for Consumer Packaged Goods (CPG), referred to as FMCG (Fast-Moving Consumer Goods) is a vibrant mix of domestic and global companies. U.S. players with a long track record of success in India include Amway, Coca Cola, Colgate-Palmolive, General Mills, Kellogg, Mars, Mattel, Newell, PepsiCo, Procter & Gamble, Revlon, Tupperware Brands.
India’s CPG sector is divided into the following categories:
Since 2020, with the meteoric rise of digital payments systems and of e-commerce, it has become possible for smaller American companies to enter India’s CPG market. The Covid-19 pandemic caused Indian consumers to buy new products without first touching them and e-commerce accelerated consumers outside the largest cities to have access to niche global brands. Today many more American companies can enter India profitably if they take effort to understand the unique factors for success in this market.
While big-box stores (called “Modern Retail” in India ) and digital commerce are growing fast, India’s 8.8 million single location (“kirana”) stores still account for the majority of CPG revenues.
The India Brand Equity Foundation projects that India’s consumer sector will be worth over $600 billion by 2030. India’s 1.2 billion internet users consume vast amounts of social media on American platforms including WhatsApp, Instagram, Facebook, X, and Google. Most upper middle-class Indians have relatives or friends in the United States (where 4 million Indian Americans now reside) and social media flows freely between the two countries, including tidbits about favorite consumer brands.
When an American brand enters India, the collateral does not need to be translated into Indian languages, unlike when the same brand wishes to expand to Canada, France, Germany, Japan or Korea.
This is not to say that India is an easy market to enter and to succeed in. Import duties, registration and labelling requirements, distributor selection and management, logistics of transport and the diversity of retailers often need expert guidance from an entity seasoned in both American and Indian ways of doing business. American companies have brace for competition from European, Japanese, Korean or Australian brands. In many segments home grown Indian companies have developed products highly tailored to Indian local needs and some of these brands now have international reach.
India is also an attractive location to manufacture consumer products. While many global companies have their own factories in India, there is a well-developed ecosystem of quality contract manufacturers that are used to western quality and production practices. In fact consumer goods made in India are available on the shelves of American retailers – toothpaste, nutraceuticals, cleaning products, foods and more.
To explore whether India is right for your company, schedule an introductory video call with Amritt.
