This whitepaper examines how AI is transforming Learning & Development in India's dynamic FMCG sector. It analyses the sector's growth trajectory, explores urban-rural market dynamics, and investigates the e-commerce shift. The paper dives into key challenges facing L&D teams in this diverse market and presents innovative AI-driven solutions. FMCG leaders will discover practical strategies to revolutionise their L&D approaches and maintain competitiveness in India's consumer goods landscape.
Fast-Moving Consumer Goods (FMCG), the fourth largest sector in the Indian economy plays a crucial role in the country's economic prosperity. In 2023, the FMCG market was valued at US$144 billion, contributing ~3% to the GDP. The sector has seen robust growth in the last three years, both by value and volume (as seen above).
India’s retail market continues to expand, driven by rising disposable incomes, rapid urbanisation and a burgeoning middle class. The FMCG sector is set for sustained growth, with government initiatives to stimulate consumption and create employment opportunities expected to boost growth. The e-commerce sector has been witnessing rapid growth, driven by increasing internet penetration, smartphone adoption, changing consumer preferences and government initiatives such as Digital India and UPI.
According to an EY survey, a staggering 71% in the retail sector plan to adopt Gen AI solutions within the next 12 months, underscoring its perceived value.
Source: BCG Report
While urban markets generate 65% of FMCG revenue, the rural market holds significant untapped potential due to its large population share. Early rural market penetration is crucial as consumption habits often continue after migration to urban areas.
Rural India’s Monthly per-capita consumption expenditure is just 58% of Urban India. | Source: Indian Brand Equity Foundation
Consumer behaviour shows distinct patterns between income segments. Affluent consumers are moving towards larger pack sizes and premium products, while budget-conscious consumers opt for smaller, more affordable alternatives. Lower-income households increasingly choose unbranded products and smaller luxuries that provide value without significant expense.