YFactor

Domestic FMCG Players –

Emerging Giants

Debu Bhatnagar

17.04.10

YFactor

The FMCG Landscape

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FMCG - MNC Leader Board

Turnover (Rs Cr)

HUL 20,000+

Nestle 5,000

Britannia (?) 3,000

ITC Consumer <3,000

Colgate Palmolive <2,000

Reckitt Benckiser <2,000

Cadbury <2,000

P&G <1,000

Perfetti <1000

J&J Consumer <1000

Henkel <500

Lotte <500

L‟Oreal <500

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The MNC Landscape

• HUL is still the „Big Daddy‟ but is steadily losing dominance. Limited local flexibility

• ITC is behaving like a local company in the FMCG space

• Reckitt Benckiser and Colgate driven by profit

• New MNCs are in focused areas –confectionery and personal care companies have done well

• A host of others: Kelloggs, Heinz and many imported brands jostling for space

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Established Indian FMCG Players

Turnover (Rs Cr)

Nirma 3,000

Dabur 2,500

Marico 2,000

Ghari Detergents Approx 1,500

Godrej 1,100

Emami 750

CavinKare Approx 600

Jyothy Laboratories Approx 550

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Emerging Indian FMCG

Players

• Sub 500 Cr Companies

• Experiencing Rapid Growth

especially in the last 7-10 years

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Super

Vasmol from

Hygienic

Research

Institute

Co T/O 161

Cr

Himgange

Cooling

Hair Oil

Co T/O 88

Cr

Co T/O

122 Cr

Keo

Karpin

from

Dey‟s

Medicals

Co T/O

111 Cr

Color

Mate from

Heena

Exports

Co T/O 96

Cr

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What makes them tick?

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The „Big Daddy‟ Story

• Losing Focus: HUL on Detergents– Nirma

• Dominance Woes: Nirma in Detergents– Ghari

– Power

• Money on the Table: Pepsi/Frito in extruded snacks, Reckitt Benckiser in mosquito coils, Colgate in toothpaste– Prakash Snacks with Yellow Diamond Snacks

– Bingo Mad Angles from ITC

– Bharat Box with Chakravyooh Mosquito Coils

– Anchor Toothpaste

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The Indian Market

• „Bottom of the Pyramid‟ – increasing numbers

entering the consumption economy

• „Climb the ladder‟ – constant growth in

economic power at all levels

• „Retail and Media Revolution‟ – drives

consumer choice and information

• „Dilli Chalo‟ – increasing urbanisation

‘The mother of all markets’ – Rapidly increasing demand for ALL

classes of products

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Category Pointers

• Exploitable

• Emerging

• Vacated

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Exploitable Categories

• „Unique to India‟ Propositions

• „Below the radar‟ Brands

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„Unique to India‟

• Legacy

– Amrutanjan

– Boroline

– Jabakusum

• „Indian‟ Categories

– Fairness Cream – not any

more!

– Hair Oil – many times bigger

than shampoo!

• Herbal/Ayurvedic/Unani

Products

– Shahnaz Husain

– Rooh Afza, Safi

• Indian habits and Perceptions

– Oil Based Hair Dye – Super

Vasmol

– „Cooling‟ Hair Oil

– Kali Mehndi

– Kajal, Bindi, Sindhoor

– Chywanprash, Hajmola

– Kesh Nikhar

• Indian Taste

– Snack Foods

– Masalas

– Idli Dosa Batter

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Below the Radar Brands

• Exploit “interstitial” spaces that the vast Indian market

offers

• Regional focus

• More wholesale oriented distribution

• Tier 2-3-4 towns

• Lower price

• Higher trade margins

• Positive product tweaks

– Perfume

– Packaging

Lissa Soap from Raipur

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Emerging Categories

• Ready to Cook/Eat

– ID Special; Meatzza

• Deodorants, Perfumery and Male

Grooming

– Park Avenue

– Wild Stone

– Z Talc

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Vacated Categories

• Clothes Blue: Robin

– Ujala

• Shaving Cream: Erasmic

– Vi John

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MNC Woes

• In the „70s and „80s HLL behaved like an Indian Company with Global Systems and People

– Rin

– Fair & Lovely

– Wheel was the last hurrah

• They attracted the best talent and there was a vast gap between them and the closest Indian competitor

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Today….

• There is no difference in the quality of

people and systems between HUL,

Dabur and Marico

• HUL is caught in a trap of its own making

– Power Brands = Low Innovation

– Central Control = Bureaucracy

– All things to all people = nothing to nobody

– Media vs Market

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David to Goliath…

• Courage is being scared to death – but

saddling up anyway: John Wayne

• Lack of money is no obstacle. Lack of ideas is: Ken Hakuta

• Gift Karsanbhai Patel an overhead slide

projector: Hindustan Lever in the ‘80s

And when all else fails…..

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Call Us!Thank You

YFactor Marketing Pvt. Ltd.

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Tel: +91 11 2613 6369; Mob: +91 97177 74290 (Debu); +91 98197 23242 (Shashi)

debu.bhatnagar@yfactor.in; shashi.kalathil@yfactor.in