FMCG is the acronym used in the context of industry classification, full form of FMCG is Fast Moving Consumer Goods. It refers to those goods which are sold quickly and are relatively cheaper and the profit margin on such goods is very thin and therefore companies have to depend on volumes rather than profit margin in order to be successful. Soaps, detergents, packed food items, beauty products, Soft drinks are some of the examples of FMCG products.
FMCG is of particular significance when there is bear market because in bear market conditions whole market is falling due to scare that there will be no growth and hence profit of all companies will be under pressure as majority of companies depend on growth of the economy. However when it comes to FMCG stocks they tend to outperform the market and give better returns as compared to other stocks when bear markets are at play because the profit of fast moving consumer goods companies is stable and it is not affected that much by the decline in the growth of the economy. Another feature of FMCG companies which are listed in stock market is that they are high dividend paying stocks because due to their nature of business the cash flow of fast moving consumer goods companies is more or less constant. Fast moving consumer goods companies give regular dividend to their shareholders and hence investors looking for regular dividend income and safety of their investments tend to invest in FMCG stocks.