Consumer goods sector can play key role in path to trillion-dollar economy: Businesses

The consumer goods industry could play a vital role in Bangladesh's journey to becoming a trillion-dollar economy, said business leaders at Bangladesh Business Summit-2023 Sunday.

Bangladesh, having a population of 170 million, is poised to become the 9th largest consumer market by 2030 through a rapidly expanding middle- and-affluent class which is projected to grow from 19 million in 2020 to 34 million by 2025, they mentioned.

While speaking at a session titled "Leveraging Growing Middle and Affluent Class for a Vibrant Consumer Goods Sector" on the second day of the three-day Business Summit organised by the FBCCI, the business leaders, however, asked for a stable fiscal and monetary policy and long-term budgetary support for industrialisation.

At the session, the business leaders discussed the potential and opportunities in key domestic sectors, including leather and footwear, electronics and electrical, and fast-moving consumer goods.

Syed Nasim Manzur, managing director of Apex Footwear Limited, presented the first keynote at the session.

He said the global market size of the fast-moving consumer goods industry is expected to reach $1.54 trillion by 2025 at an annual growth rate of 5.4%.

Because the fast-moving consumer goods industry is characterised by low margins and high sales volumes, it is most likely to benefit by increasing its customer base, which will lead to greater sales. And, Bangladesh stands as an unexplored goldmine in this respect, he observed.

As the number of people belonging to the middle-and-affluent class is projected to increase to 34 million by 2025, the strong growth of the consumer goods sector will continue to sustain itself in the future.

The size of the Bangladesh consumer goods market is $4 billion and it is growing at a rate of 9% annually, mentioned Nasim, adding that some of the sectors that are upholding this growth and have high potential are leather and footwear, electronics and equipment, pharmaceuticals, plastics, agribusiness, and food processing.

He highlighted the statistics of the last decade's growth and capacity building in various areas of the consumer goods sector in the country.

Zaved Akhtar, managing director and CEO of Unilever Bangladesh Limited, said Bangladesh has outpaced its major Asian peers such as India, Indonesia, Vietnam, Philippines, and Thailand.

The rapidly expanding middle-and-affluent class is projected to make the country the 9th-largest consumer goods market in the world, he noted, adding, "We will complete our journey from great to beyond great. We need to foster our environment in lateral thinking, harness the declining productivity of human capital, manage rapid urbanisation, and improve rural connectivity. We all must strive to collaborate among ourselves instead of working in isolation."

MHM Fairoz, managing director and CEO of Singer Bangladesh Ltd, said locally manufactured electric products recorded export earnings to the tune of $100 million in FY22.

In order to be able to grab a greater slice of the growing global market of fast-moving consumer goods, he asked for policy support and incentives.

"If we are to further expand the market, we need some policy support, such as stable fiscal and monetary policy, centralised One Stop Service, fiscal incentive for backward linkage industry, and a consistent and long-term budgetary approach," he said.

Berger Paints Bangladesh Managing Director Rupali Chowdhury who moderated the session said there is a need for increasing the capacity of the government authorities that look after various aspects of business sectors.

Hidayet Onur Özden, chairman of the Turkey-Bangladesh Business Council, said Turkish businessmen have big plans to expand business in Bangladesh.

"We aimed to have a large delegation at the Business Summit. But the presence of investors is thin because of the huge damage caused by the earthquake. However, we are interested in investing in the consumer market of Bangladesh. In that case, we will give more priority to joint ventures."

Md Saiful Islam, president of the Metropolitan Chamber of Commerce and Industry (MCCI), said, "We are making efforts to ensure that consumer goods such as garments also have the Made in Bangladesh tag in the global market. This requires policy support like in our competing countries."

Rajat Diwaker, managing director of Marico Bangladesh Limited, observed that the spread of digital communication, improvement in connectivity, massive infrastructure development, and rising middle-income group are the key factors behind the expansion of the consumer goods market in Bangladesh.

Commerce Minister Tipu Munshi attended the session as the chief guest. He said the middle-and-affluent class of Bangladesh, which is estimated to be around 30% of the total population, is the primary driving force behind the fast growth in the consumer goods market.

"This class has higher disposable income, and therefore, more purchasing power, leading to a surge in demand for consumer goods," he said, adding, "As we look to leverage this growing class, we must also understand the various challenges and opportunities that come with it."

Some of the significant challenges in the way of the consumer goods sector's growth include adequate infrastructure, innovation and technology, and quality human resources, he further said.

The government is, however, aware of various opportunities in this regard, including diverse consumer needs, increasing consumption patterns, and growing exports, he concluded.