Table Of Contents
- Growing preference for sustainability and consumer personalization opening new avenues for growth in the domain
- Increased investments in supply chain management and focus on consumer trust expanding the scope of the sector
- Rising adoption of home service robots and growing awareness for health and wellness impacting the domain positively
- Innovative product launches and M&A deals boosting the revenue share of the sector
- The final word
Roshan Deshmukh
Koyel Ghosh
Industry Outlook 2025: A Quick Look at the Trends, Strategies, and Advancements Shaping the Consumer Goods Sector
The growing disposable income of people across the globe has been a major factor in the growth of the consumer goods domain in the last few years. Moreover, the emergence of new types of lifestyle goods and personal care products has widened the scope of the industry. In addition to this, the growing penetration of Internet services has increased the popularity of e-commerce platforms. Many leading online retailers have expanded their offerings to include a diverse range of products and services, such as electronics, groceries, clothing, and more. This expansion has created a favorable environment for further growth in the e-commerce sector. This newsletter throws light on many such trends and strategies adopted by leading companies which are expected to help the sector flourish in 2025. Moreover, upcoming technological advancements, innovations, and alliances among major business enterprises are also covered in this newsletter comprehensively.
Growing preference for sustainability and consumer personalization opening new avenues for growth in the domain
Since the 1992 Earth Summit in Rio de Janeiro, countries across the globe have signed several multinational agreements that aim to reduce the environmental degradation caused by plastic pollution. Moreover, over the years, governments in these nations have enacted laws banning such materials which have a negative impact on the global environment. To align their operations with the changing dynamics of the consumer goods domain, companies in the sector are increasingly shifting toward sustainable raw materials and energy-efficient manufacturing practices to reduce their carbon footprint. For instance, many enterprises have started using electricity sourced from renewable energy plants such as windmills and solar parks to power their operations. These structural changes in the modus operandi of many leading companies in the domain are expected to improve the growth rate of the landscape in 2025.
At the same time, customer personalization has been one of the important trends witnessed in the sector in the last few years. Many e-commerce platforms have started using AI-based tools and machine learning algorithms to collect information regarding behavioral patterns, consumer preferences, order history, past transactions, etc. The data is then analyzed to identify customer preferences and demands, enabling the development of new products and services tailored to meet their needs. The growing integration of these advanced technologies has improved the revenue share of the e-commerce market. The industry, which accounted for $15.7 trillion in 2022, is anticipated to gather a revenue of $63.8 trillion by 2032, rising at a CAGR of 15.3% during 2023-2032.
Increased investments in supply chain management and focus on consumer trust expanding the scope of the sector
Over the years, due to a rise in financial and digital literacy and growing customer awareness, companies in the consumer goods sector are increasingly focusing on improving the trust of their audience in their products and services. For instance, the surge in demand for goods that are manufactured from ethically sourced raw materials has led to businesses declaring their products as ‘cruelty-free’ and sustainable. Additionally, cosmetics and lifestyle products manufacturers are signing social media influencers to market their products due to their global reach and popularity. Moreover, many countries have enacted regulations that mandate enterprises to declare information regarding the raw materials, production techniques, packaging material, etc., on the product itself. This gradual shift toward transparency is anticipated to revolutionize the sector in the coming period.
On the other hand, the disruptions in the global supply chains due to the pandemic and geopolitical tensions between different countries have compelled enterprises to invest proactively in improving the resilience of their logistics operations. Companies have started focusing on expanding their network to diversify their raw material suppliers and finished goods distributors to streamline their operations. At the same time, the dependence on local manufacturers has increased which helps multinational giants improve their access to regional markets easily. Additionally, the increasing use of modern technologies such as IoT and data analytics by logistics companies to enhance their efficiency in product delivery and inventory management functions is estimated to broaden the scope of the landscape in 2025.
Rising adoption of home service robots and growing awareness for health and wellness impacting the domain positively
Home service robots are automated devices created to handle various non-industrial tasks around the house, including gardening, floor cleaning, dishwashing, laundry, and more. As per AMR’s analysis, the rate of adoption of these robots is expected to increase exponentially in 2025. The rapid pace of urbanization and industrialization in metropolitan cities has increased the disposable incomes of people in these areas. Moreover, the daily routines and busy schedules followed by the urban population have led to several lifestyle changes. People are increasingly focusing on their personal and professional goals and hence are outsourcing daily household chores to such specialized service providers. Home service robots, by offering various advantages such as consistent work output and better productivity, are predicted to fulfill the demands of the urban population perfectly.
Several leading consumer electronics manufacturers and home automation system developers are investing in R&D activities to design state-of-the-art robotic solutions for domestic applications. Some companies have even declared their intention to launch such machines in the near future. For instance, Dreame Technology, a household appliance company, recently announced their plans to unveil X50 Ultra, a robot vacuum with "motorized swing arms" for climbing stairs. Furthermore, the system also features a lidar navigation system with smart obstacle identification and oscillating mopping pads for efficient cleaning and vacuuming tasks. As per the press release issued by the company, the device is expected to make its commercial debut in February 2025.
Apart from this, the increasing global awareness about the importance of health and well-being is expected to further strengthen the domain's presence in 2025. In the post-pandemic period, the consciousness concerning immunity building, regular exercising, and overall body fitness has increased significantly. As a result, the demand for various consumer goods such as workout equipment, protein supplements, nutritional food items, functional drinks, etc., has surged. The advent of advanced gadgets such as smartwatches and fitness trackers which help users monitor various health parameters, including blood pressure, heart rate, blood sugar, oxygen levels, etc., has further created favorable conditions for the growth of the domain. Concepts such as wellness tourism have emerged which are anticipated to bring in numerous opportunities for the growth of the landscape.
Innovative product launches and M&A deals boosting the revenue share of the sector
Recently, many leading players in the consumer goods domain have initiated merger and acquisition talks with their competitors and other companies to expand their footprint in the sector. For example, Prada S.p.A., an Italian luxury fashion brand, has declared its plans to acquire Versace from its parent company, Capri Holdings. As per the press statement, both Citi Bank and Barclays have been hired by these companies to supervise the deal and facilitate a smooth transition of the assets. Versace has been a major player in the luxury fashion industry and this acquisition is expected to help Prada to increase its revenue share significantly.
On the other hand, L'Oréal, a cosmetics manufacturer, has announced a partnership with Nanoentek, a Korean biotechnology products developer. As part of this collaboration, both companies have agreed to jointly develop a skin aging calculator that analyzes various skin parameters to forecast aging. Called L'Oréal Cell BioPrint, the device also helps users study their skin’s response to chemicals such as retinol. Lancôme and Vichy, two subsidiaries of L'Oréal, are planning to release this technology in the market in the early months of 2025.
The final word
The growth of the consumer goods domain is attributed to the increasing disposable incomes of people worldwide and the rising integration of advanced technologies within the sector. In addition, the shift toward sustainability and the launch of innovative products by leading companies is anticipated to strengthen the foothold of the landscape in 2025.
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