Bangladesh is expected to become the ninth-largest consumer market globally by 2030, as reported in the HSBC Global Research Report in 2022. The industry is segmented into fast-moving consumer goods (FMCG), durables, and consumer services.

The FMCG sector, which includes food and beverage, personal care, and home care products, is the largest segment of the consumer industry in Bangladesh. The industry is largely dominated by multinational corporations such as Unilever Bangladesh, British American Tobacco, Procter & Gable, and many prominent local brands.

The growth of the FMCG industry is driven by the factors like increasing purchasing power, changing consumer lifestyles, and a higher demand for high-quality consumer goods. A rise in consumption in the middle and rural classes also drives it. By 2030, 33% of the population is expected to be middle-class. 

There has been a significant rise in consumption expenditure in rural areas, increasing to 103% over the past 15 years. To take advantage of this growth, many companies, including local giants such as Square Group and Bashundhara Group, have entered the FMCG business since the 2000s.

The consumer durables market in Bangladesh is also growing. This industry has seen significant growth of 14% compound annual growth rate (CAGR) from 2016-2020 and is currently worth USD 2.35 billion. According to a report by UCB Asset Management, published in October 2021, the industry is expected to reach USD 10 billion by 2030, driven by rising disposable incomes, urbanization, and changing consumer preferences.

The industry’s growth is largely correlated to the country’s nominal GDP growth, the rise in purchasing power, and female labor force participation. Bangladesh has achieved 99% electricity coverage, and the electricity demand is projected to grow, leading to sustained growth in the consumer durables sector. Revenues of publicly listed companies have increased with more electricity coverage. The rise in female labor force participation, nuclear families, and supportive government policies will further drive consumer durables demand.

Financing and payment options, mobile financial services, and influencer culture on social media are expected to shift consumer behavior and increase purchasing power. With the increasing penetration of the internet and mobile devices in Bangladesh, the e-commerce market is expected to grow in the coming years. This may lead to more consumers shopping online, drastically changing how goods are distributed and sold in the country.

The consumer services sector, encompassing retail, entertainment, and healthcare, is also rising in Bangladesh. The retail market, in particular, is expected to reach USD 19 billion by 2025.

The Boston Consulting Group reported that 20 lakh Bangladeshis are joining the middle and affluent class (MAC) each year. An analysis from EBL Securities in 2017 estimated that the number of MACs was around 1.2 crore and expected to reach 3.4 crores by 2025. 

A few important indicators will shape the trends of the consumer industry. Economic factors such as GDP growth, inflation, and disposable income will likely influence Bangladesh’s consumer industry in 2023.

A strong GDP growth rate is a positive indicator for the consumer industry. It indicates that the economy is expanding, and consumers have more disposable income for non-essential goods and services. Bangladesh has been consistently growing at around 7% in recent years and is expected to grow at a similar rate in 2023. 

Disposable income is the amount consumers have left over after paying for essential expenses. Rising disposable incomes in Bangladesh have been driving the consumer industry forward in recent years. However, the increasing inflation rate in 2023 may reduce disposable income, negatively affecting the consumer industry.

High inflation can discourage consumers from spending, leading to declining demand for non-essential goods and services. Bangladesh has been facing an inflation rate of around 5-6% in recent years, which is considered moderate. However, the inflation rate has recently increased to a 7.92% monthly average, according to government data, and more, according to private sources, and is expected to keep rising in the foreseeable future. This may hurt the consumer industry this year.

Overall, the consumer industry in Bangladesh is expected to continue growing at a steady pace in the coming years, driven by increasing disposable incomes, urbanization, and a young and growing population. Government policies may be able to drive the situation in a swift direction. The inflation may slow down the industry’s growth in 2023, but the country is expected to see an overall rise in the industry in the coming decade.