FMCG industry in Nepal growing at more than 20% annually

reogma|FMCG industry in Nepal growing at more than 20% annually
8 mins read

Fast-moving consumer goods (FMCG) are products which have a quick turnover, and at relatively low cost.

FMCG products are replaced within a year and purchased in small quantity as per the need of an individual or family. They have short shelf life either high demand.

These products include perishable, non-perishable, durable, non- durable goods such as soap, toiletries, cosmetics, tooth cleaning products, shaving products and detergents.

Definition / Scope

Fast-moving consumer goods (FMCG) are products which have a quick turnover, and at relatively low cost. FMCG products are replaced within a year and purchased in small quantity as per the need of an individual or family.

They have short shelf life either high demand. These products include perishable, non-perishable, durable, non- durable goods. For examples FMCG products includes a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods.

FMCG may also include pharmaceuticals; consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate bars. It also includes kitchen appliance such as mobile phone, TV, refrigerators etc.

Nepal being a developing country, has a larger population who are unaware of the products but in recent years globalization is playing major part in changing life style and consumption of FMCG products in Nepal consumers. Because of the low per capital consumption has immense possibilities for growth. And if the FMCG companies are able to change mindset of consumers to brand, they would generate higher growth in future.

With a population of around 30 million possesses a huge FMCG industry (or Fast-Moving Consumer Goods’ industry), which amounts to more than a billion dollar. This industry is believed to be growing at a very remarkable pace. While the overall economy of Nepal is growing at the rate of 3% to 4%, the FMCG sector in the country is growing at a high yearly rate of over 20 %.

Urban markets account for the greatest share of total revenues in the consumer sector, there is a lot of scope for growth in rural markets, with consumption expected to grow in these areas as the penetration of brands increases.

Market Overview

FMCG market in Nepal is expanding from urban to rural areas, the country over the years clearly indicates the growth in spending of Nepali consumers, FMCG market is growing by 20% with huge opportunity of market expansion.

With the change in life style and brand awareness has also open the opportunity for companies to expand their products range and convert them into a branded product.

Urbanization is taking place rapidly, where rural areas is set to increase with rising income is causing change in demand patterns and leading to explosion to new opportunity.

Where the spending has always been minimal in Nepalese consumer in FMCG products especially in rural areas, but globalization and change in lifestyle is also changing the buying behavior of consumers, people have started spend lot more than they used in recent years.

According to the IBN’s Manufacturing Sector Profile 2017, the FMCG sub-sector currently has 59 percent of the GDP added value in the country’s manufacturing sector followed by industrial goods at 38 percent and consumer goods at 3 percent.

Market Risks

  • Consumer dynamics and demographic shifts
  • Pricing pressures and pricing strategy
  • Speed and success of innovation
  • Brand and marketing effectiveness
  • Supply chain agility and resilience
  • Managing commodity price spikes
  • Retailer power and private label growth
  • Emerging market strategy and execution
  • Competitive intensity
  • It is hard to maintain sustainability in FMCG products, demand for the FMCG products decrease faster than any other product, availability of substitute products is higher in FMCG products so it is more likely to decrease in demand of these products. Industry always have to maintain

Top Market Opportunities

  • Nepal lifestyle has always been plain and simple from decade, from recent years consumer are getting aware of brand and product use which is increasing demand for FMCG products.
  • Easier access to products and changes in lifestyle is increasing the demand for products.
  • Untapped rural market is an opportunity for penetrating in rural areas for many FMCG products.
  • Rising income is increasing purchasing power of consumers.
  • Awareness and changes have recently started so it has high chance of market growth

Market Trends

  • The key factors for the market growth of FMCGs are right set of distribution, market penetration, growing economy and the rising purchasing power of consumers.
  • The present-day consumers have a wide choice in selecting the FMCGs and the manufacturer are making good profits from these products.
  • Growing consumer awareness, easier access to products and changing lifestyles have been the key growth drivers for the consumer market.
  • Highly regulated economy where several restrictions on foreign investment in the retail segment and imports have been imposed. This has resulted in constraints in terms of introducing new categories or products.
  • Poor bureaucracy, unstable government and strikes are the factors that result in market instability.
  • Existing laws and policies are not up to the mark and can be manipulated easily by the bureaucrats
  • The widespread availability of spurious products locally has been another area of concern in the sector. There is rampant copying of brand names and packaging of the products of MNCs and big domestic producers that creates confusion among the consumers ultimately leading to foreign investors shying away from investing in Nepal.

Industry Challenges

  • One of these is the mass market and distribution industry. The distribution’s brand, the crisis, new lifestyles, technology, Internet, etc., are obligating the entire industry to undergo transformation.
  • Companies have never lived such an exciting and tumultuous period as the current times are. The society’s transformation, driven by digitalization and globalization, as well as geopolitical and economic forces, is completely transforming many industries and its consumer habits.
  • Uncertainty of how much market can go and what would be the need of consumers. Companies have always limited them from launching new products and creating demands among the consumers. Sudden change might cause huge problem for existing industry.

Other Key Market Trends

Globalization is taking major part in product demand and buying behavior of consumers in Nepal. Nepalese are adapting western culture which has also increased the buying behavior of consumers in many sector or industry. For example, tourism, hotel industry, entertainment etc. has helped FMCG industry to increase demand indirectly.

As awareness of products is increasing, which is also increasing want and need for FMCG products. People are demanding different varieties of products. FMCG market has been limiting its product line, products with necessity is produced which isn’t creating demands for new products neither are they introducing new products in the market.

According to a manufacturing sector profile of Investment Board Nepal (IBN), the FMCG sector has been growing at around 20 percent annually. FMCG market has also been limiting is products and market penetration but with changes that has been occurring in recent years has increase an opportunity for FMCG industry in Nepal at higher growth rate.

Nepal with a population of around 30 million possesses a huge FMCG industry (or Fast Moving Consumer Goods’ industry), which amounts to more than a billion dollar. This industry is believed to be growing at a very remarkable pace. While the overall economy of Nepal is growing at the rate of 3% to 4%, the FMCG sector in the country is growing at a high yearly rate of over 20%.

Key Market Players


Started as a textile trading business by Bhuramal Chaudhary around 1933 and established by his son Lunkaran das Chaudhary in 1968, Chaudhary Group (CG) is the largest business conglomerate of Nepal operating over 45 companies in the country with and investment outlay totaling USD 1 billion.

FMCG has been a core area of business for CG with the group being the market leader in the noodles segment. Its FMCG business host a number of companies namely, CG Foods (Nepal) and its unit Gold Beverage Nepal, CG Beverage, CG Brewery and CG Packaging.

The group also has CG Exim (Nepal) as the trading arm to export and import of the FMCG products. Established in 1984 as Nepal Thai Foods, CG Foods (Nepal) is the market leader in pre-cooked noodles category with the iconic Wai Wai brand.

The company has two manufacturing units located in Kathmandu and Nawalparasi having the capacity to produce 1,350 packets of noodles per minute. Wai Wai is also the first Nepali international noodles brand which is manufactured in India as well where the company has eight manufacturing plants.

The company’s product portfolio includes a variety of brown and white Wai Wai noodles, a variety of snacks (Kwiks Cheese Balls, potato chips) and confectionaries (Zoom Wafers). Besides the noodles and snacks, the group also produces a wide variety of fruit juice, beer and bottled spring water respectively in Rio, Nepal Ice and Thirst-Pi brands. Meanwhile, CG’s FMCG business also expands to the production of cigarettes and packaging items for its own FMCGs and external clients.

They have almost 50 percent share in the domestic noodles market. The annual turnover from Wai Wai roughly stands at Rs 6 billion at present. The company has a 40 percent market share in the snacks segment. The company holds a market share of around 25 percent in the beer segment.


Unilever Nepal is the Nepal wing of the Anglo-Dutch FMCG multinational Unilever. The company started its manufacturing activities in Nepal with the production of detergent powders in 1994. Having its production unit in Makwanpur, UNL has a wide-ranging line up from personal care to cleaning products.

It is the manufacturer of a number of daily essential products in personal care, cleaning agents, beverages and food segments namely, Lux, Lifebuoy, Pepsodent, Close Up, Sunsilk, Clinic Plus, Fair & Lovely, Wheel, Surf Excel, Vim, etc.


Dabur Nepal is the Nepal arm of the Indian natural products major Dabur. It is among the country’s leading companies in FMCG business. Established in 1989, the company started commercial operations in 1992. The company has established itself as the largest producer of ayurvedic and natural health products over the years.

The company which had transactions worth Rs 5.3 million in its first year now has annual transactions worth Rs 10 billion in Nepal. The company employs 1,000 people while it provides indirect employment to around 20,000.

The company which specialises in utilising local and natural resources has been producing a range of products in health care, personal care and home care segments. The company is the producer of Real Juice, Dabur Chayawanprash, Dabur Red Toothpaste, Amla hair oil, Dabur Honey, Glucose- D, Gulabari, Odonil, among others.

Dabur Nepal holds a 50 percent share of the market in the juice category. the company produces almost 90 percent of its products domestically.

Sharda Group

Sharda Group is among the largest Nepali business houses in manufacturing and trading of FMCGs operating since 1970. The group has been producing different brands of noodles, snacks, biscuits and confectionaries, rice, flour and liquors, homecare items and soaps alongside importing and distributing a large number of foreign liquor brands in the country.

Sharda Group is in partnership with other business houses manufacturing FMCGs in different segments. Started in 2001, Asian Thai Foods (ATF) is a joint venture of Sharda Group and Jaju Group and has been producing various noodles brands including Rum Pum, 2 PM, Preeti and a variety of snacks.

Apart from the nationwide coverage, the products of ATF are distributed in all the major cities and towns in North and Northeast India and also in Bhutan. The company’s share of the domestic noodles market stands at over 25 percent. The two groups extended their partnership further in 2012 with the establishment of Asian Biscuits and Confectionaries (ABC).

Similarly, Premiere Organics, a JV of Sharda Group and Rathi Group, has been producing Xing Vodka, Old Monk Rum, Royal Reserve 8-Years Old Whiskey and Black Stallion Malt Scotch.

Located at Duhabi, Sunsari, over Rs One billion was invested in the company and it has been operational since 2015 employing over 400 people in manufacturing and marketing. Premiere Organics is the largest spirit company in Nepal in terms of production capacity.

The group’s SPG Trading is the national distributor of French distilled beverages producer Pernod Ricard in Nepal. It has a long list of imported Pernod Ricard brands including Royal Salute, Chivas Regal, The Glenlivet, Aberlour, Strathisla, Longmorn, Ballantines, 100 Pipers, Absolut Vodka, Beefeater Gin, Jameson Irish, Malibu Rum, Kahula Liquor, Martell, G.H. Mumm Champagne and Jacob’s Creek. “We import 43 brands of products,” informs Gaurav Sharda, Director of Sharda Group who oversees the group’s liquor business.

The maker of Goodlife biscuits and confectionaries has a share of around 12 percent of the domestic FMCG market.

Bhuramal Lunkarandas Congolmerate (BLC)

Part of the Chaudhary Group, BLC has been active in FMCG business for the last several years. The conglomerate’s area of focus in FMCG at present is in three categories- biscuits, baby food, ready-to-use therapeutic food (RUTF), ready-to-use supplementary food (RUSF) and dairy products.

Shree Pashupati Biscuit Industries is one of the flagship companies of BLC. Established in 1973, the company is one of the oldest and biggest biscuit producers of Nepal.

Churning out 9,000 metric tons annually, the ISO 22000:2005 Food Safety and Management System certified company includes over 30 varieties of biscuits in its product portfolio. Soaltee, Butter Cracker, Top, Marie, Bourbon and Lemon Puff are among the popular biscuit brands of the company. Pashupati Diets and Foods is another unit of BLC that is focused on producing different types of energy biscuits and cookies.

It has products for average to high income consumers. The company over the last few years has been focusing on producing biscuits and cookies in the premium segment. Delight, Delicious and Seasons Cookies are among the major brands of the company.

Further Reading

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reogma|FMCG industry in Nepal growing at more than 20% annuallyreogma|FMCG industry in Nepal growing at more than 20% annually



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