Emerging Sectors of

India - FMCG
By:
Chetan Jain(21)
Gaurav Grover(23)

Introduction

Fast

Moving Consumer Goods

Purchased from retail for immediate consumption

Consumer: low cost, low commitment, frequent purchases
Industry: high volume, low margin, quick turnover
Consumer is the key

FMCG Category & Products

FMCG Evolution

1950s-80s Low Investment in the sector

Low purchasing power
Govts emphasis on small scale sector
HLL and other companys urbane focus
Post liberalization
Entry of MNCs
Focus shifted to getting to rural consumer first
Others, like Nestle, remained with the urban population
Latest fad to hit the market is the sachet bug.
Mushrooming of regional brands
Nirma enters and changes the focus to Value for Money in the 70s
Post liberalization, Jyothi Laboratories, Ghari Detergent and Anchor
toothpaste giving the nation-wide brands a run for their money.

(In US $ Billion)

FMCG in context with Indian

Economy

FMCG in context with Indian

Economy
Fourth largest sector of Indian Economy
5% of GDP
13% of country export
Employment for 3 million people
Current market size 19.1 billion$
Expected to 33.4 billion$ by 2015
Food processing Industry alone needs 28 billion$ investment by 2010
Recorded 10 percent sales growth for the quarter ending June 2009
Rural India has a large consuming class with 41 per cent of India's middle-class
and 58 per cent of the total disposable income
In 2008, rural and semi-urban markets contributed almost 80 percent to FMCG
growth.

The Top 10 Companies in FMCG

Sector
1.Hindustan Unilever Ltd.
2.ITC (Indian Tobacco Company)
3.Nestl India
4. AMUL
5.Dabur India
6.Asian Paints (India)
7.Cadbury India
8.Britannia Industries
9.Procter & Gamble Hygiene and Health Care
10.Marico Industries

SWOT Analysis
Strengths

Low cost labor

Low capital intensity
Basic technology is easily available
Huge distribution network
Large domestic market
FMCG products will always be in demand
Increase in disposable income

SWOT Analysis
Weakness

High initial launch cost

Limited mass media options
Demand for high-end products is dropping
Poor transport infrastructure

SWOT Analysis
Opportunities

Convert consumers to branded products

India's per capita consumption of most FMCG products is
much below world averages per capita.docx
Rural marketing

SWOT Analysis
Threats

Strong competition
Significant presence of unorganized sector
Tax & regulatory structure

Forecast 2010

Rural and semi-urban

1 billion population thrice the urban
Market size reaches to 100k Crores
Problems in the rural sector

Low per capita disposable incomes

Large number of daily wage earners
Acute dependence on vagaries of monsoon
Seasonal consumption
Poor infrastructure roads and power supply

Urban
Market reaches to 35k Crores
Intense competition severe pressure on margins Focus on
newer products, such as fruit juices

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