The Indian consumer market is set to scale new heights. With an estimated ten-fold increase in middle-class population and three-fold rise in household income, aggregate consumer spending is likely to more than quadruple from around US$ 428.69 billion in 2005 to US$ 1.76 trillion in 2025.

Simultaneously, India is likely to leap-frog from being the twelfth largest consumer market in the world to become the fifth largest consumer market in the world, says a study by McKinsey Global Institute. Significantly, over 23 million Indians -more than the population of Australia-will number among the country's wealthiest citizens.

FMCG

India's fast moving consumer goods (FMCG) sector is the fourth largest sector in the economy. The total FMCG market is in excess of US$ 17.36 billion and is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.

The fact that the per capita income has nearly doubled in a short span of four years to just under US$ 800 in 2006-07 (from around US$ 450 in 2002-03), has boosted the growth of FMCG companies. For example, the sales of 11 major listed FMCG companies grew by 16 per cent in the first nine months of the current fiscal (2007-08).

For the 2007 as a whole, the size of FMCG market is likely to exceed US$ 18 billion in value as against US$ 15 billion in 2006.

In fact, the surge in consumer spending along with the changes in consumer tastes and low penetration levels of the organized sector in several commodities is likely to ensure high growth rate across a range of FMCG categories. For example, market research firm A C Nielsen has identified 24 categories in personal grooming space that are growing at an average growth rate of 13 per cent. Products like perfumes, body washes and hair colours among others have all been experiencing high double-digit growth.

Significantly, several Indian FMCG companies have also been aggressively exploring global markets through both acquisitions and alliances. In the past three years, they have acquired about 15 companies and have spread their presence to more than a dozen countries.