Reviewed by Aug 27, 2020| Updated on
Consumer goods are items which the consumers purchase for consumption. Also referred to as finished goods, consumer goods are the end result of processing and manufacturing, and will be placed on the store shelf for a customer.
Consumer goods are goods sold to consumers for their own use or pleasure and not as a means for further economic activity. For example, all types of clothes, food, and jewellery come under consumer goods.
But basic or raw materials, such as copper are not considered as consumer goods as they must be transformed into usable products.
Classification of Consumer Goods
From an economic point of view, we can categorize consumer goods as sustainable (useful for longer than three years), nondurable (useful for less than three years), or pure (instantly consumed as and when produced).
Consumer goods can be classified into different categories for marketing purposes based on consumer behaviour, how customers are shopping for them, and how much consumers buy them.
Consumer goods can be grouped into four categories from a marketing point of view: convenience, shopping, speciality, and unsolicited goods. Those categories are based on patterns of consumer purchase.
Convenience products are the ones that are purchased daily and are readily available for purchase. Most of these commodities are sold through wholesalers and retailers, including items, such as milk and tobacco products.
Consumer Goods Market in India
The FMCG sector grew from Rs. 2.20 lakh crores in 2011 to Rs. 3.68 lakh crores in 2017-18. The sector is further expected to grow to Rs 7.24 lakh crores by 2020 at a Compound Annual Growth Rate (CAGR) of 27.86 per cent.
In 2019, the sector was expected to grow 11-12 per cent. Around June–September 2018, it saw value-added growth of 16.5 per cent; backed by moderate inflation, rising private consumption and rural income. The urban segment of FMCG is expected to grow steadily at 8% in FY19, and the rural sector is expected to contribute 11-12% of total revenue in FY19.
The key growth drivers for the consumer market are growing awareness, easier access, and changing lifestyles. Under the Union Budget 2019-20, the emphasis on agriculture, MSMEs, education, healthcare, infrastructure, and tax rebate is expected to impact the FMCG market directly. Such policies are expected to increase the disposable income in common people's hands, particularly in rural areas, which will help the sector.