Looking to Become a FMCG Franchise? You are in the Right Place
FMCG, in other words, Fast Moving ConsumerGoods. This is a market that is growing by leaps and bounds. As per the available latest data, FMCG sales in India grew between 7% and 9% in 2022-23.
With such great potential in the FMCG sector, this is the right time to become a FMCG franchise. As per Forrester Research, the prospect of FMCG distributors is rising between 10% and 12% every year and will do so in the next 10 years.
FMCG items are low-priced but the consumption is pretty high. Common examples are food items, household items, clothes, etc.
A FMCG franchise is an individual or a business entity that serves as a link between the manufacturer and the retail outlet. In this case, the individual or the entity chooses to promote and partner with specific FMCG firms for product distribution in selected geographical areas.
Distributorship opportunities in FMCG are a lucrative business option and you have different choices that you can pick from.
Understanding the FMCG Sector in India
Fast-moving consumer goods are finished items purchased directly by customers. As customer become loyal, some brands get to the top of their recall, even without advertising or promotions.
In most cases, FMCG products are used on a regular or day-to-day basis. The need for their regular use demands a well-developed and wide network of retailers and sellers. This network consists of distributors, retailers, FMCG companies, and franchisees who are responsible for the distribution of items and marketing them in the market.
In India, FMCG revenues are growing at a rate of 21.4% in the last 10 years. As per records, in 2018, the Indian FMCG sector was the fastest-growing in the Asian Pacific region at 14.8%. India topped the chart leaving behind the likes of Vietnam, China, Japan, and New Zealand.
Types of FMCG
Fast-moving consumer goods are divided into two categories – industrial and non-industrial. To top it off, the items are also divided into durable and non-durable products. Durable products have a shelf life of 3 or more years. Examples include electronic items, recreational goods, etc. Non-durable items have a minimal shelf life, like food items or pharmaceutical drugs. These goods usually have a shelf life of less than 12 months (from the manufacturing date).
Some of the popular FMCG products that FMCG franchises can choose to sell are –
- Toiletries
- Cosmetics
- Hygiene products
- Haircare and skincare products
- Detergents
- Food products
- Stationery items
- Personal Care products
- Beauty Products
- Electrical Products
- Home Appliances
- Dairy Products
- Baked food items like biscuits, breads, cakes, etc.
- Mineral and Herbal Products
- Security Products
- Ayurvedic Products
The top three FMCG product categories in India are –
- 50% of sales are from household and personal care items
- 3%1 to 32% belong to the healthcare industry.
- 19% to 19% is from the Food and Beverage industry
Categories of FMCG
As an FMCG franchise, you must choose the right FMCG product categories.
Based on the shelf life of the products, there are four broad categories of products.
1. Convenience Products
This is a product category that customers most frequently purchase. These products are easily available at most retail stores. These are quite regular products and the customer does not require time to choose. Examples: food items.
2. Shopping Products
When buying these products, customers need some planning. The products are durable, meaning the shelf lives are longer. Example: Electronics and furniture pieces.
3. Speciality Products
These are products that are not consumed regularly. Examples include designer clothing or premium jewellery. Cars and other types of vehicles are also part of this division. In most cases, the products are from popular and high-end brands.
4. Unsought Products
These product categories can be easily bought in the market. However, the demand for these products is quite low. For example, encyclopedias, other specialised products, etc.
Becoming an FMCG Franchise in India
This is quite a competitive space since there are plenty of distributorship opportunities in FMCG. You need to be well aware of the process of becoming a franchise of an FMCG brand.
But before anything else, you need to pick the distributorship of your choice. You can become a traditional distributor, a modern-trade franchise, a wholesaler, an institutional distributor, and a super stockist franchise.
Now, let’s see what the brand expects from a would-be franchise.
- Generally, the brand, the manufacturing or the marketing company appoints one franchise in a selected location.
- Even though the overall opportunities are more, location-specific opportunities are limited. Hence, if you are interested in taking the distributorship of any brand or company, you need to follow their strategies and announcements closely.
- Your experience and expertise in the sector will be vital in determining whether you will be awarded the distributorship or not.
- If you lack the expertise or experience or if it is a start-up, it is excellent to partner with someone who has an established track record in the past.
Becoming an FMCG Franchise: Requirements
Some of the key considerations in appointing a FMCG Companies Franchise are as follows –
- Do you have the ability to invest in the company?
- The next most important consideration is your experience in the FMCG sector.
- The capacity to extend credit is another crucial consideration.
- You may also be required to establish a warehouse, rent vehicles for distribution, and appoint salespeople to sell the products.
Start by applying today to become a Grocery 4U franchise today.
