FMCG, FMCD & Retail
Fast Moving Consumer Goods/ Durables are popularly known as packaged goods and include all products purchased by consumers at regular intervals. The growing income of people, ease of access to a variety of goods, changing lifestyles and the growing influence of e-commerce websites are the main factors driving growth in the industry.
The Industry is the fourth largest in India. It is expected to grow at a compound annual growth rate (CAGR) of 14.7% in urban areas and at a higher CAGR of 17.7% in rural areas with the Industry poised to hit the 110 Billion USD mark by 2020 and the rural FMCG market to hit 100 Billion USD mark by 2025 .FMCG’s are supplied mainly through two routes, one comprising of kirana stores and is the largest contributor to sales. However, Modern Trade is slowly catching up to the traditional methods of sale on account of them providing a comfortable and modern purchasing experience and competitive bargain details. Products like packaged foods, liquid/paper soaps, cereals etc. are distributed primarily via modern trade channels and this route is expected to grow further with the relaxed regulations regarding foreign direct investment in multi-brand retail.
The pro reform government having a full majority at the centre has led to a spectacular improvement in market sentiments. The revival of demand and the expansion and improvement of distribution networks make it the perfect time for investors to enter the sector.
The recent trend of investments globally has shown a marked tendency to be guided by markets themselves rather than considerations of efficiency while deciding investment destinations. India’s rapidly expanding economy and vastly improved consumer outlook, coupled with expectations of overtaking China long unsurpassed growth rate have made it a favourite for investors worldwide.
The retail market in India can be classified broadly into the organized sector, consisting of conglomerates and chain stores, registered with and paying tax to the government and the unorganized sector, mainly comprising family owned Kirana stores. Recent changes in the Political arena and increased Foreign Direct Investment aim at providing a structural framework, intending to consolidate the fragmented retail industry.
India is also expected to emerge as a sourcing base, being low cost and abundant supply of raw materials. The proliferation of the Internet and changing spending habits of Indians have led to the meteoric rise of the E- Commerce industry in India, which is expected to grow to be in the range of 22 billion USD in 2015 according to an estimate by PWC and the industry as a whole is poised to double in value to 1 trillion USD up from 600 billion USD in 2015 .
Though the Retail Industry faces various challenges on account of the diverse demographic, issues with supply change resulting in massive wastage and issues with the constantly changing regulations, the outlook has never been as positive as it is now with a number of International chains evaluating the market and assessing their ability to set up shop in India.
We, at Khare Legal Chambers have an extensive and deep rooted knowledge of the complex bureaucratic and legal hurdles likely to be faced while entering this new and ever expanding market and can help ease the process of entry or expansion and deal with any related legal issues in this complex environment through our dedicated staff possessing unmatched expertise in this field.