FMCG market in Bangladesh rises to $3.9bn

The fast-moving consumer goods market has been rising steadily riding on the rapid economic growth and an increase in purchasing power of consumers, a top industry player said.

The gross sales value of FMCG in the country rose to $3.9 billion in FY22, up from $3.7 billion a year ago, said Zaved Akhtar, CEO and managing director of Unilever Bangladesh. If the figure is converted into local currency, it will be over Tk 37,000 crore (@Tk95 for a dollar).

Akhtar was recently sharing his thoughts with a group of selected business journalists about the FMCG industry, Unilever Bangladesh’s business and the country's overall economy in InterContinental Dhaka.

After buying 82 percent stakes in GlaxoSmithKline’s (GSK) health food and drinks business, Unilever strengthened its position as the leader in Bangladesh’s FMCG market.

“We have around 60 percent share in the FMCG segment,” said Akhtar.

FMCG products are sold rapidly and at a comparatively lower cost as these have a short shelf life. FMCG products include packaged foods, beverages, toiletries, over-the-counter drugs and similar consumables.

Middle-class people have been contributing to the country's growth in the FMCG industry. According to Boston Consulting Group, 20 lakh Bangladeshis are joining the rank of middle and affluent class (MAC) a year.

An analysis of EBL Securities in 2017 showed, the number of MAC was around 1.2 crore which is expected to be 3.4 crore by the year 2025. Another study conducted by the Bangladesh Institute of Development Studies (BIDS) found that 20 percent of the total population in Bangladesh belongs to the middle-class income category compared with 24.1 percent in India. Researchers believe that 25 percent of the total population will belong to the middle-class class income category within 2025 and 33 percent within 2030.

Also, a rise in consumption in rural areas is considered one of the major drivers of the growth of the FMCG industry in Bangladesh. According to BBS, in the last 15 years, consumption expenditure for rural areas has increased significantly and reached 103 percent from 81 percent.

To cash in on the growth potential, around three dozen companies, including large conglomerates, entered the FMCG business. Local giants, such as Square Group, Bashundhara Group, IFAD, ACME, Golden Harvest, Aftab, and Globe made entry into the market after 2000.