Decoding ​Digital Impact in India: A $45B Opportunity in Fast Moving Consumer Goods by 2020

Subhashini Gupta / November 2017

As India braces for an exponential growth of internet users—approximately 650M by 2020—we look at the opportunities for fast moving consumer goods (FMCG) brands in India. Our research, conducted in partnership with Boston Consulting Group, addresses the growing influence of digital on the FMCG sector and its estimated impact by 2020.

India is undergoing a digital revolution, and in the next three years, essentially half of India’s population—about 650M people—will become internet users. A change driven by increasing mobile penetration, with higher growth coming from non-metropolitan areas.

At the same time, the influence of the internet on FMCG purchases is growing rapidly and much faster than the industry imagined. Online consumers spend twice as much on FMCG purchases than offline consumers do, and their online FMCG spends are expected to grow to $6B by 2020.

In our research report, we address the growing influence of digital on FMCG in India and its estimated impact by 2020 as well as how FMCG companies must rethink their digital strategies and digital media allocation to improve their go-to-market plans.

Our research includes the following key findings:

  • Digitally influenced FMCG consumption will grow to $45B (40% of an $115B​ market) by 2020. FMCG e-commerce will grow to $6B by 2020 (digital influence will be 7X that of e-commerce).
  • Online video reach is already two-thirds of TV reach in urban India​, while online video pricing has dropped by two-thirds in the past two years​.
  • India's 28M affluent and elite households will contribute to 40% of overall FMCG consumption by 2020, of which 60-65% will be digitally influenced.
  • The share of FMCG digital ad spending is expected to grow to ~30% by 2020.
  • Extent and nature of digital influence depends on the intent of consumption and category penetration.

View or download the full research report produced by Google India and BCG for a more in-depth look at the FMCG digital landscape, opportunities, and best practices for brands looking to go beyond traditional media.

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