Byline: Khurram Adeel Shaikh
Pakistan holds huge prospects and opportunities for FMCG sector
Global conditions continued to improve for consumers as this year was though consumer sentiment didn't rise unilaterally and several countries saw dips in consumer confidence, with the largest drops coming from emerging market economies.
From a global perspective, conditions and prospects for the remainder of the year appear largely positive. In the first quarter of the year, confidence grew across Western Europe, the economic recovery in Latin America looks promising in a number of key markets, dollar sales of fast-moving consumer goods (FMCG) in North America performed well, and population growth and growing disposable incomes across Asia-Pacific are having an effect well beyond the immediate region.
There are a huge prospects and opportunities for FMCG sector in Pakistan. As the rural markets are not much developed, the FMCG companies have enormous opportunities to capture the market. Purchasing power of customer is steadily increasing income. Hence a the FMCG companies has better prospects than ever to tap. FMCGs operating in Pakistan are flexible enough to respond to local dynamics; simultaneously establishing or maintaining close distribution hubs and creating a powerful marketing presence. Household consumption drives the majority of sales in the FMCG segment. Growth in this segment has increased considerably in Pakistan in recent years, due in large part to long-term trends such as a growing urban middle class with rising disposable incomes and changing consumer preferences for traditionally Western products.
Domestic firms often have an advantage over their international competitors, because they are closer to their customers and better acquainted with their buying preferences and habits. While multinational corporations (MNCs) have to work hard to ensure their brands stay relevant by localizing their products, local players such as those in Pakistan have that knowledge built into their FMCG products.
Emerging Asian markets have had a significant impact on the growth of the fast moving consumer goods (FMCG) segment. According to a study, emerging market consumers make up less than one-third of global revenue for the 15 largest multinational FMCG manufacturers. However, consumer spending in these markets is expected to grow about three times as quickly as that in developed economies. By 2020 such spending will reach US$6 trillion and account...