Fmcg Sector of Pakistan

1836 WordsMar 19, 20118 Pages
FMCG Sector of Pakistan Trends, Issues & Opportunities Consumer Goods Industry of Pakistan Products which have a quick turnover and relatively low cost are known as Fast Moving consumer Goods (FMCG). FMCG products are those that get replaced within a year or less and the purchase cycle is relatively small as compared to other products and consumer durables. Examples of FMCG products include a wide range of frequently purchased products such as toiletries, soaps, cosmetics, tooth cleaning, shaving detergents as well as some non durables such as glass ware, bulbs, batteries, paper products and plastic goods. 1 In Pakistan the industry has evolved to a great extent even in the face of strict completion both in terms of generic unbranded…show more content…
The heavy leverage from financial institutions meant that cash had to be generated from the market. The companies therefore cut back on their credit policies to reduce their exposure on one front while increasing prices to pass on the burden to the consumer on the other. This spiral was not a one off case and the edible oil category is still plagued by such issues on and off. While it remains difficult o maintain premium positioning on one spectrum as consumer switch to lower tier, lower priced brands; the trade is unable to sustain its own profitability as volumes diminish. This example serves to illustrate the point that while on the surface profitability and margins may be high but such problems may be rampant in the FMCG sector. Supply side factors are a major cause of concern for most FMCG companies in Pakistan. The recent floods in Pakistan can be seen as a blessing as well a curse. Flood waters prevented distribution of goods to areas in Sind and Punjab. Milk and dairy products were one of the worst hit categories. Other FMCG products affected by supply side disruptions and loss of inventories in flood affected areas include soaps, washing powders etc. Over the long term, the revenue of these companies is likely to receive a boost as resettlement will propel several opportunities for market development among some yet unexplored market segments. As awareness of

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