COVID-19 has revolutionized the fast-moving consumer goods (FMCG) sector. The industry has been one of the fastest-growing sectors during the pandemic. This growth is attributed to the swift adoption of cutting-edge technology, conscious health, environmental changes, and many other factors. 

In fact, as per a report by IBEF, the Indian FMCG market is estimated to reach US$ 220 billion from US$ 110 billion between 2020 to 2025 at a CAGR of 14.9 percent. It is India's fourth-largest sector which is showing exponential growth on the back of rising digital connectivity in both urban and rural areas. Industry experts believe that this growth trajectory will continue to be accompanied by a few critical trends and innovations. 

Against this backdrop, here are 5 key growth drivers that will influence FMCG in 2022: 

Changing Consumer Behavior, Convenient Shopping Inclinations - Due to pandemic-brought restrictions, evolving marketplaces, increasing Internet penetration, and enhanced exposure of e-commerce platforms have changed consumer behavior drastically. Considering physical shopping complexes or other outlets were barred for consumers during the pandemic, e-marketplaces were the only places where consumers could divulge. For most customers, online shopping is hassle-free, offers a wide variety, and provides them with personalized shopping experiences. Given this prominent change in consumer mindset and habits, most companies have developed a strong online presence and are leveraging omnichannel retailing and multichannel sales approaches. 

Developing Conscious Consumerism, Sustainability is Pivotal - The pandemic inadvertently made people aware of their dwindling health and fitness measures and forced them to become aware of hygiene and wellness. In the past few years, the FMCG market has witnessed a spike in demand for natural and organic products. Especially in the personal care essentials like hand wash, body wash, face care, and hair care products, consumers are paying more attention to brands that use 100 percent natural ingredients or claim to be entirely chemical and cruelty-free. Vegan products have also caught the eye of consumers looking for environmentally friendly products. In addition to eco-friendly products, consumers are also inclining towards plastic-free packaging. The recent consumer demand is for FMCG companies to use recyclable, reusable, or compostable packaging, which won't expand their plastic footprint in the environment. 

READ MORE: Health, Hygiene, and Convenience to Dominate FMCG Industry in 2022

Leveraging New-Age Technology to Enhance Customer Experience - The advent of virtual reality, artificial intelligence, augmented reality, the Internet of Things, and other futuristic tools have accelerated FMCG companies' growth. Since most millennials and Gen Z consumers are digital natives, they prefer a seamless and feasible digital-first experience and personalization for smooth engagement. While VR and AR provide customers with a life-like experience from the comfort of their couch, AI is used to offer a better consumer experience, and IoT can be implemented to ensure proper inventory management or provide targeted messaging to the customers. Additionally, FMCG companies use big data analytics to analyze consumer behavior and innovate products or stitch marketing strategies accordingly. Insights on consumer behavior and inclinations equip companies with the knowledge to launch better products and establish good relationships with their target customer group. 

Companies Prefer Direct Distribution - Over the period, most FMCG companies have generated significant online presence and are setting direct distributorship to gain maximum benefits and consumer loyalty. Today, many manufacturers are setting up full-stack direct online and offline distribution channels that allow customers to directly interact with their favorite brands instead of going through intermediaries. While this increases the growth of FMCG companies, it also bridges the gap between manufacturers and end customers. Having said that, the FMCG industry is an essential element in the evolution of e-commerce platforms. 

In a nutshell 

The FMCG industry thrives on the back of modernistic inventions, technological advancements, and consumer behavioral patterns. The environmental concerns are shared by consumers worldwide, irrespective of geographies. And technology is like an evolving avalanche that cannot be bound or stopped from seeping into our day-to-day lives. Therefore, it is safe to assume that some or all of the aforementioned trends will likely continue playing a pivotal role in the upcoming years.