India to be fastest growing FMCG advertising market with 14% growth

FMCG Food and drink brands will increase their advertising spend on digital channels by 7 percent per year to 2023.

According to a report by media agency Zenith, Fast-moving Consumer Goods (FMCG) in India will be the fastest-growing market for food and drink brands advertising spend over the next three years. By Publicis Groupe.

According to Zenith’s report on Business Intelligence – FMCG Food and Drink, which covered 12 markets including the US, UK, France, and China, all other markets are expected to grow consistently between 2 percent and 5 percent per year.

India will benefit from rising consumer demand as disposable income has increased sharply, coupled with a catch-up expansion of the underdeveloped advertising market, stating that advertising accounts for only 0.3 percent of India’s GDP. The accounts are less than half of the global average. 0.7 percent.

It said that FMCG food and beverage brands, including packaged foods and soft drink brands, will increase their advertising spend on digital channels by 7 percent per year by 2023 and digital advertising spending will increase from $ 12.3 billion to $ 14.9 billion in 2020. Will go. 2023, while its market share will increase from 46 percent to 49 percent.

“FMCG brands still rely too much on traditional TV, spending 39% of their advertising on television advertising in 2020, compared to 24 percent for the average brand. Except in China, where the FMCG brand already has digital advertising Has adopted as its core business. The report said that communication, FMCG brands spent 52 percent of their budget as compared to the average budget of 26 percent.

However, the declining reach of TV, especially among the youth, is a less effective medium, forcing companies to follow audiences for digital channels. Brands will also look to consumers for DTC (direct-to-consumer) operations or retail partnerships to support and expand their e-commerce capabilities.

Zenith said that outdoor advertising is an exception to the dwindling reach of traditional media. As traffic returns to normal after the COVID-19 recession, the proliferation of digital displays will make it more effective in reaching consumers with targeted and relevant advertisements near the point of sale.

“FMCG out-of-home advertising is projected to grow by 9 percent per year from 2020 to 2023, while its market share increases from 6.1 percent to 7.0 percent, slightly ahead of its pre-epidemic share of 6.8 percent in 2019,” the report noted.

Overall, advertising spending by FMCG brands fell sharply compared to the entire market in 2020, falling 10.7 percent to $ 26.7 billion. The reason for this was that companies cut back on promotional activity for products that consumers could not quickly find to meet demand as they faced the challenge of high demand along constrained supply chains amid the epidemic. Instead of advertising, companies invested in distribution infrastructure, particularly e-commerce operations and partnerships.

“Now, with the FMCG e-commerce infrastructure being put in place, the brand will have to increase its investment in advertising to support it,” the report said, adding that FMCG advertising spends between 2020 and 2023. It is estimated at 4.4 percent annual growth.

“Business Today”