Presented by:Nidhi AhujaAnnu SinghShashank

ArchitPankaj

Sourav Saha

FMCG Sector, Retail Industry and Consumer

Durables….

Analysis OfIndian FMCG Sector

INTRODUCTION The Fast Moving Consumer Goods Sector is the fourth largest sector of Indian economy with total market size of more than 60000 crore.

The FMCG sector in India is expected to grow at a compounded annual growth rate (CAGR) of 9% to a size of Rs 1,43,000 crore by 2010 from Rs 93,000 crore at present.

Contd………..With a growth of 52.5%, the BSE FMCG Index has, during the last one year, outperformed the Sensex, which could manage a growth of 41% only.

A well-established distribution network, intense competition between the organized and unorganized segments, low operating cost, strong branding characterizes the sector.

FMCG – Evolution 1950’s-80’s – Low Investment in the sector

Low purchasing power Govt. emphasis on small scale sector HLL and other company’s 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

70’s Post liberalization, Jyothy Laboratories, ‘Ghari’ Detergent and

‘Anchor’ toothpaste giving the nation-wide brands a run for their money.

INDUSTRY SEGMENTSPersonal Care.

Household Care.

Branded and Packaged Food and Beverages.

Spirits and Tobacco.

INDUSTRY CHARACTERISTICS

Branding.

Distribution Network.

Contract manufacturing.

Large Unorganized Sector.

Market Players In Indian FMCG Sector

Domestic Players:-ITC LimitedMaricoNirma LimitedJyothy Laboratories Ltd.

Foreign Players:-Cadbury India LimitedCargillCoca ColaColgate Palmolive IndiaHindustan Unilever LimitedNestle India LimitedP & GPepsiCo

Trends In FMCG SectorThe FMCG sector has been registering double-

digit growth in sales since the last couple of years. Currently, with annual revenues of US$ 14. 74 billion, it is the one of the most promising sectors.

The FMCG sector is witnessing rapid growth in rural areas and is estimated to grow by 40 per cent compared to the growth of 25 per cent in urban areas.

PepsiCo has announced a US$ 500 million investment in India over the next three years.

FMCG companies have acquired about 15 companies and have spread their presence in more than a dozen countries.

Indian FMCG Market Size(In US $ Billion)

(Source: IBEF FMCG Analysis)

Rise in Disposable IncomeWith increasing disposable income

and subsequent rise in quality of living and hygiene concerns, the average Indian’s spending on grocery and personal care products will likely increase.

Currently, the average Indian spends about 48%, also the majority, of his total income on groceries (40%) and personal care products (8%).

Rise In Disposable Income(In USD Thousand)

(Source: Euro Monitor Goldman Sachs BRIC Report)

Competition….Significant Presence of Unorganized Sector –

Basic technology for most products is fairly simple and easily available.

The small-scale sector in India enjoys exemption/ lower rates of excise duty, sales tax etc. This makes them more price competitive.

A highly scattered market and poor transport infrastructure limits the ability of MNCs and national players to reach rural areas and small towns.

Low brand awareness enables local players to market their fake look-alike brands.

SWOT Analysis: Whole Industry!

Strengths Well established distribution networks extending to the

rural areas Backed by strong brands Low cost operations

Weakness Low export levels Small scale sector reservations limit ability to invest in

technology and achieve economies of scale

SWOT Analysis: Whole Industry!

Opportunities Large domestic market Export potential Increasing income levels will result in faster revenue

growth

Threats Imports Tax & Regulatory Structures Slowdown in Rural Demands

FMCG Market ReviewQ2 FY 09 Result Highlights

(Source: India Info-line Research)

FMCG Sector: Policy

• Reduce Excise DutiesReduce Excise Duties

Automated Foreign direct InvestmentsAutomated Foreign direct Investments

License Abolishment From Food Processing IndustryLicense Abolishment From Food Processing Industry

Easing Prices Of Raw MaterialsEasing Prices Of Raw Materials

100% FDI For NRIs & PIOs For Setting Up Units In India100% FDI For NRIs & PIOs For Setting Up Units In India

Subsidies In Taxes Specially VAT & ExcisesSubsidies In Taxes Specially VAT & Excises

COMPANY PROFILE….

Jyothy Laboratories came into being in 1983, powered by the vision of one man – M.P Ramachandran - the current Chairman & Managing Director.

Engaged across the complete FMCG product cycle- management, research, manufacture, marketing and branding.

Marketing a range of daily household and personal care products.

Headquarter in Mumbai with a nationwide office network.

Started operations with a corpus of INR 40,000 to a company with a turnover of over INR 400 crores, Jyothy Laboratories Limited has come a long way.

INTEREST & ACTIVITIES 21 manufacturing facilities across 14 locations- Trichur, Wynad, Roorkee, Pondicherry, Chennai,

Hyderabad, Bhubaneswar, Bankura, Guwahati, Baddi, Silvassa, Salem, Jammu and Pithampur- proximate to consumer locations.

Most plants are ISO 9001 and ISO 14000- certified.

40 depots to service customer requirements.

Network of more than 2,500 distributors.

Motivated team of more than 1,500 marketing and sales members.

Employee strength of over 3,500.

Exports to 14 countries including Sri Lanka, Bangladesh, Mauritius, Malaysia, UAE, Hong Kong and Saudi Arabia.

Products accessible across more than 750,000 Indian households.

PROMINENT BRANDS Ujala (flagship): Liquid fabric whitener.

Maxo: Mosquito repellent.

Exo: Dish washing soap and dish washing scrubber.

Ujala Stiff & Shine: Fabric enhancer.

Jeeva: Personal Care toilet soap.

Maya: Incense Sticks

Ujala Detergent: Detergent washing powder.

Earlier known as Hindustan Lever Limited.Was formed in 1933 as Lever Brothers India Limited.Headquartered in Mumbai.HUL is the market leader in Indian products such as tea,

soaps, detergents etc.The company’s statement of corporate purpose is to “meet

the everyday needs of people, everywhere.”

CONTD…….The company was renamed in late June 2007 to

“Hindustan Unilever Limited”, to provide the optimum balance between maintaining heritage of the company and future benefits.

HUL holds 100 factories across India for manufacturing its diverse product range.

PROMINENT BRANDS….Some of its brands include: Kwality Wall's ice cream. Lifeboy. Lux. Breeze. Liril. Hamam. Pureit Water Purifier. Lipton tea. Brooke Bond tea. Bru Coffee. Pepsodent and toothpaste and brushes and many more…..

Forecast 2010 Rural and semi-urban

128 million population thrice the urban Market size growth from 48k to 100k Crore (Growth of 50% at

10%CAGR) 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 16.5k to 35k Crore (Growth of 100% at 20%CAGR) Intense competition – severe pressure on margins – Focus on newer

products, such as fruit juices

Source: Assocham Report ‘Future Prospects of FMCG’

CAREER OPPORTUNITIES

Microsoft Office Word 97 - 2003 Document

ConclusionMiddle Class Customer Population!Domestic Consumption!High Population!The Finest Set Of Perfect Competition In World!You May Not Purchase Software!You May Not Purchase Cement!You May Not Buy Clothes From A Retail Outlet!You May Aside Automobiles!But Soaps, Toothpastes, Tea, Coffee & So On Are Basic

Need For Us!Thus FMCG Is On & On!!!!!!!!!!!!!!!