FMCS Is The New FMCG!

FMCS is what I call Fast Moving Consumer Services. This emerging category is growing extremely fast in India and seems to be the new growth driver not only for consumers, not only for manufacturers and service providers but also for the Indian economy.

Many years ago, the penetration levels of the FMCG industry were very low. Over the last few decades, due to:

• Distribution expansion
• Consumer awareness
• Technological advancements
• Innovation
• Commitment from companies and manufacturers

The penetration levels of the FMCG industry improved substantially, leading to large growths in top line and bottom line.

The FMCS industry is going through the same phase now. Currently, the penetration levels are extremely low, but the scope for growth is massive.

Companies can witness substantial improvement in their top line and bottom line, just as it happened with the FMCG industry decades ago.

A few decades ago, the toilet soaps industry in the FMCG sector had low penetration. Many companies and brands invested significantly in:

• Marketing efforts
• Innovation
• Communication strategies
• Consumer education
• Segmentation and positioning

The penetration in urban areas was slightly higher, while rural penetration remained relatively lower. Brands like Lux, Dettol, Lifebuoy, Santoor, Cinthol, Liril, Medimix, and many others implemented strong brand marketing strategies, driving category growth.

Positioning across multiple platforms, such as:

• Beauty
• Hygiene
• Health
• Youth appeal
• Freshness

This made the toilet soaps industry flourish.

• 2014: Nationwide penetration was 75%
• 2020: Increased to 88% and still growing

These numbers reflect steady growth in the FMCG sector, demonstrating how strategic brand efforts can drive expansion.

If we compare FMCS to the FMCG industry, a similar trend emerges. Currently, the penetration of smartphones is at 38%. This sector holds immense potential for growth through:

• Higher penetration
• Brand marketing efforts
• Strategic communication
• Enhanced distribution
• Consumer education

Much like the FMCG industry, the FMCS sector can see rapid growth in both top line and bottom line by applying similar strategies.

Like any industry, FMCS faces challenges in increasing penetration and consumer adoption. However, by leveraging learnings from FMCG, companies can achieve exponential growth.

Brands like iPhone and Samsung have been innovating and driving the market, playing a pivotal role in increasing penetration.

Over decades, various FMCG categories have witnessed remarkable growth, starting from very low penetration levels. This serves as a benchmark for FMCS brands to replicate success.

• Biscuit Industry: Brands like Parle, Britannia, Sunfeast have driven penetration to 94%, with cookies penetration at 83%.
• Internet Penetration: Currently at 49%, with substantial room for growth, benefiting other FMCS categories.
• Hair Oils: Grew from 68% in 2014 to 87% today, led by brands like Parachute, Nihar, Vatika, Bajaj.
• Detergents: Now at 98% penetration, powered by Surf, Wheel, Ghari, Tide, Ariel, Nirma, Woosh, Fena, Rin.
• Toothpaste: Jumped from 63% in 2014 to 92% in 2020.
• Toothbrushes: Increased from 35% in 2014 to nearly 50% today, but still has growth potential, as only 7% of Indians brush twice a day.

• Current penetration: Only 4%
• Growth drivers: MasterCard, Visa, Standard Chartered, Citibank, SBI, ICICI, and others can expand the market significantly.

• Current penetration: Only 3%
• Opportunity: More consumers can be encouraged to invest through strategic brand marketing.

• Current penetration: 11%
• Potential: There is immense room for expansion in financial accessibility.

• Current level: 4%
• Scope: With the right strategies, insurance brands can drive higher market participation.

I strongly believe that, just like the FMCG industry in India, the industry I call FMCS can accelerate its growth through strategic Brand Marketing efforts.

Definitely, FMCS is the new FMCG!