The rapid pace of expansion of the e-commerce sector has been one of the biggest factors driving the growth of the consumer goods domain in the past few years. Recently, several leading supermarkets, hypermarkets, and retail companies have launched their digital portals that allow customers to buy different products, thus boosting the revenue share of the landscape. Moreover, governments in developing countries across the globe are launching schemes and initiatives, encouraging small and medium-scale enterprises to take their businesses online to cater to a larger audience base. At the same time, the rising disposable incomes of the working-age population across the globe have created favorable conditions for the growth of the sector. This newsletter comprehensively covers all the trends and developments that impacted the consumer goods domain in Q1 2025.

Rising experience-driven consumption bringing numerous opportunities to the sector

In the past few years, the advent of virtual and augmented reality technologies has completely changed the way consumer goods companies conduct their businesses. AR tools are widely used for product visualization purposes wherein customers are provided an immersive experience of a product’s looks, features, functionalities, etc. Using these solutions, buyers can also visualize how the commodity would look in their living or working spaces. Many leading brands like Amazon have also launched “try before you buy” features on their websites that allow consumers to conduct virtual trials before purchasing products like clothes, makeup kits, and other lifestyle accessories.

Increased focus on ethical and transparent sourcing opening new avenues for growth

Over the years, awareness regarding environmental sustainability has increased among people across the world. Multinational consumer goods businesses have been heavily criticized for their role in polluting global ecosystems, thus compelling them to opt for an eco-friendly production approach. Consequently, companies have started to fund projects that have minimal impact on the surrounding biodiversity, thus reducing the overall carbon footprint of the sector. On the other hand, consumers are increasingly demanding products that are created using fair labor practices, ethical standards, and green manufacturing practices. Furthermore, many governments have enacted laws that mandate companies to adhere to CSR norms, thereby urging businesses to refine their operations and make them more transparent.

Convenience-driven consumption fueling growth

The growing pace of industrialization, urbanization, and globalization has changed the consumption patterns and demands of people living in urban areas. At the same time, the digitalization of various services and the launch of different e-commerce portals have enabled consumer goods companies to sell their products even in the remotest regions around the world. Furthermore, businesses are using emerging technologies such as AI and ML to connect and interact with their customers more effectively. For instance, many leading enterprises have deployed AI-powered chatbots that address different queries, complaints, and grievances of their consumers seamlessly. Thus, the convenience and flexibility offered by such online platforms have strengthened the footprint of the sector in Q1 2025.

In the last few years, several retail companies, that offer daily-use household products, have developed mobile applications to help customers purchase different goods easily. In addition, the entry of leading companies, such as Amazon.com, Inc., Tesco PLC, Walmart Inc., and Reliance Retail Limited, into the online grocery market is expected to help the industry gather a revenue of $965.4 billion by 2032. The industry accounted for $258.6 billion in 2022 and is projected to grow at a CAGR of 14.3% during 2023-2032. The launch of new subscription plans and membership programs has aided these businesses in attracting new customers, thereby increasing their footprint in the domain.

The surge in demand for health and wellness products boosting the sector’s revenue

Since the last few years, especially after the COVID-19 pandemic, the demand for different health supplements and wellness products has increased significantly. The rising awareness regarding the importance of a balanced lifestyle and immunity building has contributed greatly to the expansion of the consumer goods sector. Products such as non-toxic cosmetics, smart wellness gadgets, ergonomic home products, etc., have become quite popular among people across the globe. Along with this, increasing emphasis on personalization and customization has created numerous lucrative opportunities for the growth of the sector in Q1 2025.

Shift toward high-quality goods and luxury items impacting the industry positively

In the post-globalization period, the sale of high-performance, luxury goods such as watches, apparel, skincare products, etc., has risen exponentially. The growth in the overall incomes of the middle-class population living in major cities across the world is fueling the demand for such goods and services. The luxury furniture market, for instance, accounted for $23,771.90 million in 2020 and is projected to amass a sum of $42,159.40 million by 2031, citing a CAGR of 5.5% during 2022-2031. A shift toward innovative and creative furniture designs made from wood, metal, and glass has contributed to the expansion of the landscape in the last few years.

Summing up

In essence, the consumer goods domain has experienced a major rise in its revenue share in the recent past due to the increasing expansion of the e-commerce sector. The growing preference for convenience-driven consumption and the surge in health and wellness products have been one of the major drivers of growth of the landscape in the first quarter of 2025. The shift toward luxury goods owing to the rising disposable incomes of middle-class populations is estimated to help the domain flourish in the near future.

For tips and recommendations on how to capitalize on the investment opportunities in the consumer goods industry, feel free to talk to our industry analysts today!