Fast moving consumer goods (FMCG)

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Products that are sold quickly and at a relatively low cost, such as food, beverages, toiletries, and cleaning products

Fast moving consumer goods (FMCG) explained

Characteristics of FMCG

Short shelf life

Many FMCG products have a short shelf life and require constant replenishment. Examples include food and beverages, personal care items, and cleaning products. This means that retailers must have efficient supply chain management and inventory control systems in place to avoid waste and ensure product availability

Low cost and high volume

FMCG are typically low-cost products because they are mass-produced and designed for high-volume consumption. The manufacturing and distribution costs are spread across large quantities of goods, allowing FMCG manufacturers to offer their products at relatively low prices

Brand loyalty

Consumers tend to be loyal to their favorite FMCG brands, making it difficult for new competitors to enter the market. This loyalty is often based on product quality, consistency, and availability.

Importance of FMCG

- Meets essential needs

- Large market size

- High demand and consumption

- Contribution to the economy

- FMCG products play a significant role in contributing to the economy of a country by generating employment, revenue, and tax income

Innovation and competition

Challenges in FMCG industry

Intense competition

The industry is highly competitive, with numerous players competing for market share and sales. This makes it difficult for companies to differentiate themselves and stand out in the market.

‍Changing consumer preferences

As consumers become more health-conscious and environmentally aware, they may seek out healthier or sustainable options, while also expecting convenience and accessibility. This can pose a challenge for FMCG companies who must adapt to these changing preferences in order to remain competitive and meet consumer demand.

Price sensitivity

Consumers in the FMCG industry are generally price-sensitive, which makes it challenging for companies to increase prices without losing market share.

Complex Supply chain

The FMCG sector frequently uses complex supply networks that involve numerous intermediaries. This may result in problems with quality control, stock-outs, and delays.