FMCG

Sagar Bhatt

H L institute of Commerce, Ahmedabad

Mail – sagar.bhatt17@gmail.com

1. What is FMCG ?

- A brief Introduction Full form – Fast Moving consumer goods

India’s FMCG sector is 4th largest Sector in the economy and generating 3 million employment opportunities.

Includes - household care, personal care , food & beverages, etc..

FMCG products have a quick turnover and relatively low cost.

India is 12th largest consuming country in the world as at 2010.

These products are sold quickly and generally consumed at regular basis.

Scope & Growth in India

Market size : $13.1 billion, 4th Largest in the world.

Expected market size (by ‘18) : $ 74 billion.

Fastest growing segment : Hair care, household care, male

grooming, female hygiene, and the chocolates and

confectionery categories, quick service restaurant chains,

apparels, foot wear retailers.

Better growth prospectus for Indian rural FMCG market, due to

presence of 12.2% of world population in Indian villages.. &

due to farm sector in focus, rural income can be boosted.

Within the food segment, it is estimated that processed foods,

bakery, and dairy are long-term growth categories in both rural

and urban areas.

Firms can launch new segment of products, due to increasing

demand.

For ex. Procter & Gamble.

Hypermarkets and supermarkets, market share – 5-7 %

Expected to double to :– 10-12%.

E-Commerce has become an important medium of buying and

has a significant impact on the way consumers buy and

consume.

With an ongoing time, consumers have started demanding

healthy and hygiene products.

For ex. Saffola, mouth wash, sanitizers, Other low

cholesterol oils and healthy products.

“With the increase in income levels and choices, the

demand for premium products will take a hike” said

director at Cadbury India Ltd.

Operating environment & Govt

policy

Favourable policies by Indian Government- policies attaining

international competitiveness, reducing excise duties &100%

export oriented units can be set up by government approval and

use of foreign brand names etc.

1. Foreign direct investment- Automatic investment approval up to

100 per cent foreign equity or 100 per cent for NRI and

Overseas Corporate Bodies investment is allowed for most of

the food processing sector except malted food, alcoholic

beverages and those reserved for small scale industries (SSI).

2. Removal of quantitative restrictions and reservation policies

3. Food Laws

MAJOR PLAYERSCOMPANY SALES (in Rs.)

(2014)

LOGO

ITC Ltd. 29901 crores

Hindustan Unilever Ltd. 28019 crores

Nestle 9101 crores

Dabur 4349 crores

Goorej Consumer Care Pvt.

Ltd.

3581 crores

Colgate-Palmolive Co. 3159 crores

Marico 1069 crores

Procter & Gamble 1700 crores

Britannia Ltd. 5615 crores

Emami Ltd. 1627 crores

FMCG market capitalisation in 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

ITC Ltd HUL Nestle India

In Crores

In Crores

2,56,769

49,768

CompanySales as on 31 March 2012

(US$ mn)Product segment

Britannia Industries Ltd 785.5 Tiger, Good Day, Marie Gold

Colgate Palmolive India Ltd 408.8Colgate, Palmolive, Axion, Dish

Wash

Dabur India Ltd 706.5

Dabur Amla, Vatika, Fem, Dabur

Gulabri, Dabur Chyawanprash,

Hajmola

GlaxoSmithKline Consumer

Healthcare India Ltd421.9

Horlicks, Boost, Maltova, Eno,

Iodex

Godrej Consumer Products Ltd

(GCPL)425.2

Ezee, Godrej Dish Wash Cinthol,

Color Soft FairGlow, No 1,

KeshKala.

Gujarat Cooperative Milk

Marketing Federation (AMUL)1,700 Amul

Hindustan Unilever Ltd. 3,700.8

Lakme, Lifebuoy, Lux, Pepsodent,

Sunsilk, Ponds, Rexona, Vaseline,

Fair and Lovely, Dove, Pears,

Active Wheel, Rin, Surf Excel.

Indian Tobacco Co. Ltd. 758.7Aashirvaad, Sunfeast, Fiama Di

Wills, Vivel.

Nestlé India Ltd. 1,068.6Everyday, Nescafé, Classic,

Maggi, KitKat, Munch.

12

COMPANY Market share

Hindustan uniliver

ltd.

36.4%

Indian tobacco

company

30%

Nestle 8.2%

Britannia 6%

Dabur 4.3%

Others 15.1%

36.4

30

8.3

6

15.1

SALES

HUL ITCBritannia DaburOthers

Future prospects

OPPORTUNITIES By 2020,expected to become 400,000 crores.

With the increase in population and income levels, supply will

be satisfied with more demand.

With the initiative of Make in India, a green signal to FMCG

industries.

Rising income levels, i.e. increase in purchasing power of

consumers.

Large domestic market with more population of median age 25.

High consumer goods spending.

With rise in per capita incomes and awareness, the growth

potential is huge.

Lower price and smaller packs are also likely to drive potential

up trading for major FMCG products.

RISKS Removal of import restrictions resulting in replacing of domestic

brands.

Tax and regulatory structure.

Rural demand is seasonal in nature.

Ban on excessive advertising, because of TRAI regulations.

No advertising available for Alcoholic drinks & Smoking

products.

CONCLUSION

It is concluded from this study that FMCG

sector is growing and will continue to grow very

fast.

This sector provides quality and quantity with

reasonable cost to the consumers not doing

away with its competitive edge.

Consumer satisfaction is its ultimate objective.