Fast-moving consumer goods Fast-Moving Consumer Goods or Consumer Packaged
Goods are products that are sold quickly and at relatively low cost.
Examples include non-durable goods such as soft drinks, toiletries, Over-the-counter
drugs, toys, processed foods and many other consumables.
Though the profit margin made on FMCG products is relatively small , they are generally sold
in large quantities; thus, the cumulative profit on such products can be substantial.
FMCG is probably the most classic case of low margin and high volume business.
Fast-moving consumer electronics are a type of FMCG and are typically low priced generic
or easily substitutable consumer electronics, including mobile phones, MP3 players, game
players, and digital cameras which are of disposable nature.
Scope The term FMCGs refers to those retail goods
that are generally replaced or fully used up over a short period of days, weeks, or
months, and within one year.
This contrasts with durable goods or major appliances such as kitchen appliances,which
are generally replaced over a period of several years.
FMCG have a short shelf life, either as a result of high consumer demand or because
the product deteriorates rapidly.
Some FMCGs—such as meat, fruits and vegetables, dairy products, and baked goods—are highly
perishable.
Other goods such as alcohol, toiletries, pre-packaged foods, soft drinks, and cleaning products
have high turnover rates.
An excellent example is a newspaper—every day's newspaper carries different content,
making one useless just one day later, necessitating a new purchase every day.
The following are the main characteristics of FMCGs:
From the consumers' perspective:
Frequent purchase Low involvement (little or no effort to choose
the item – products with strong brand loyalty are exceptions to this rule)
Low price Frequent purchase
Low involvement (little or no effort to choose the item – products with strong brand loyalty
are exceptions to this rule) Low price
From the marketers' angle:
High volumes Low contribution margins
Extensive distribution networks High stock turnover
High volumes Low contribution margins
Extensive distribution networks High stock turnover
ISIC definition The retail market for FMCGs includes businesses
in the following International Standard Industrial Classification (ISIC) (Revision 3) categories:
ISIC 5211 retail sales in non-specialized stores
ISIC 5219 other retail sale in non-specialized stores
ISIC 5220 retail sale of food, beverages and tobacco in specialized stores
ISIC 5231 retail sale of pharmaceutical and medical goods, cosmetic and toilet articles
ISIC 5251 retail sale via mail order houses ISIC 5252 retail sale via stalls and markets
ISIC 5259 whole sale goods Supplier industries for FMCGs include:
1511 meat and meat products 1512 fish and fish products
1513 fruit and vegetables 1514 vegetable and animal oils and fats
1520 dairy products 1531 grain mill products
1532 starches and starch products 1533 animal feeds
1541 bakery products 1542 sugar
1543 cocoa, chocolate and sugar confectionery 1544 macaroni, noodles, couscous
1549 other food products 1551 spirits, ethyl alcohol
1552 wines 1553 malt liquors and malt
1554 soft drinks, mineral waters 1600 tobacco products
2101 pulp, paper and paperboard 2102 corrugated paper, containers
2109 other articles of paper and paperboard 2424 soap and detergents, cleaning preparations,
perfumes.