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Indian FMCG industry constitutes the largest segment in India with considerable contribution to the GDP. It can be categorized into primarily personal care, health care, home care and food and beverage. In India, personal care products traditionally only comprised of toothpaste, soaps and shampoos. However, cosmetics such as beauty creams and lotions or even oral care products such as mouthwash are fast gaining popularity in the personal care market. Expenditure on these emerging products has shown exponential growth. Media penetration and rising consciousness to global fashion and trends have sculpted the course of consumer spending. Acted upon by the availability of international products and aided with rising disposable income, the sector is poised for further growth.
The report begins with an overview of the FMCG industry in India providing the market size and growth as well as information regarding its contribution to GDP in India. This is followed by a primary segmentation of the industry. An overview of the personal care market provides an introduction to the sector and covers the market size and growth in India. An analysis of the value chain has been included which is followed by a snapshot of the various distribution channels players opt for in the personal care market. An EXIM trend over a period of five years is included which precedes a Porter’s Five Forces analysis that concludes the section.
The next section deals with the segmentation of the personal care market. Each of the six sub-segments that the sector comprises of is discussed and includes skin care, hair care, oral care, color cosmetics, bath and shower as well as fragrances.
An analysis of the drivers explains the factors for growth of the market and includes increase in disposable income, growth in men’s grooming segment, increase in awareness, growth in rural segment and rise in organized retail. Personal care products do not really fall within the purview of necessities barring a few. Due to international products making a beeline in the Indian market, some are more often being termed as luxury products. Intensive research and development has allowed players to improvise on existing products towards catering to customized needs of consumers. An increase in disposable income at the hands of people acts as the primary driving force in this sector as people have the capacity to spend on such products. Another reason for growth is the emergence of the male grooming sector. Women category has always been a driving force, but the added percentage in terms of male segment has only furthered growth in this sector. As men pay more attention to their appearance and image, this category has attracted a host of products delineated strictly for their needs. Media penetration acts a chief stimulant in this aspect as it results in heightened awareness among the masses. Players continue to advert
2. Executive Summary
Indian FMCG sector is considered to be growing at a1% annually
Market Personal Care market, a sub‐segment of the FMCG sector, is expected to grow at a2% CAGR over
20‐‐‐‐‐
Drivers Challenges
– Increase in disposable income – Harmful effects of chemicals
Drivers & – Growth in men’s grooming segment – Depreciation of rupee
Challenges – Increase in awareness – Rise in packaging cost
– Rise in organized retail
– Growth in rural segment
Innovation Products with dual benefits
Trends Personal care appliances Rise in organic products
Improved marketing strategies Teens market
Major Players
Competition Company 1 Company 2 Company 3
Company 4 Company 5 Company 6
PERSONAL CARE MARKET IN INDIA 2012.PPT 2
4. Personal care market is expected to grow strongly due to
rising awareness among consumers
Personal Care Industry – Overview Market Size and Growth
• Personal Care industry has experienced steady
growth over the last few years T
• It continued to expand even during the economic p1% S
recession when other sectors were negatively
affected R
• Chief stimulants for the growth of this sector are s1
Chief stimulants for the growth of this sector are s1 Q
and s2 P
• The sector is abound with strong presence of
multinationals, both domestic and foreign concerns
• This sector is aided with a strong distribution
network wherein k1 and k2 plays a key role
• C1has affected the sector by increasing the cost of
imports both of products as well as raw materials 20-- 20-- 20-- 20-- 20--
• Players are increasingly focusing on f1 as there is
minimal product differentiation in this sector
Source:
PERSONAL CARE MARKET IN INDIA 2012.PPT 4
5. Distribution Channel – Summary
Rural enterprises Distributors
Key
Channels
Stores Retailers
PERSONAL CARE MARKET IN INDIA 2012.PPT 5
6. Increased awareness has resulted in higher demand for
international luxury products, especially cosmetics
Imports Imports (Value)
• India has witnessed a rise in imports owing to the Y Axis
demand for international cosmetics
demand for international cosmetics 15,000
, Y
• Has a cenvat duty of g1% with an excise cess of g2% 10,000 W X
• However, i1 can have a negative impact on the 5,000 Z
overall imports
0
20----- 20---- 20----- 20-----
Segmentation 2010 ‐11 Segmentation 2011‐12 (Apr‐Jun)
a1% Country 1 Country 7
a2%
b1% Country 2 Country 8
Country 3 b2% Country 9
c1% Country 4 f2% Country 10
f1%
d1% Country 5 c2% Country 11
e2%
Country 6 d2% Country 12
e1%
Source:
PERSONAL CARE MARKET IN INDIA 2012.PPT 6
8. Drivers & Challenges – Summary
Drivers Challenges
Increase in disposable income
I i di bl i Harmful effects of chemicals
Growth in men’s grooming segment Depreciation of rupee
Increase in awareness Rise in packaging cost
Growth in rural segment
Rise in organized retail
PERSONAL CARE MARKET IN INDIA 2012.PPT 8
9. Government Participation – Summary
Drugs and Cosmetics Act
1940
Initiatives
Drug and Cosmetic Rules
Bureau of Indian Standards
u eau o d a Sta da ds
2010
PERSONAL CARE MARKET IN INDIA 2012.PPT 9
10. Trends – Summary
innovation
Personal Care appliances
Improved marketing strategies
Key trends
`
Products with dual benefits
Rise in organic products
Teens’ market
PERSONAL CARE MARKET IN INDIA 2012.PPT 10
11. Public: Domestic Company – Player 1 (1/4)
Company Information
S
SAMPLE
Offices and Centres – India
Corporate Address Place 1
Tel No. +123456
Place
Fax No. +123456
Website www.abc.com
Year of Incorporation 18‐‐
Ticker Symbol ‐‐
Stock Exchange ‐‐
Products and Services
Products and Services
Head Office
Category Products/Services
C1 P1, p2,p3 Key People
C2 P4, p5, p6 Name
N Designation
D i ti
C3 P7, p8, p9 Person 1 D1
Person 2 D2
C4 P10, p11, p13
Person 3 D3
Person 4 D4
Source:
PERSONAL CARE MARKET IN INDIA 2012.PPT 11
12. Public: Domestic Company – Player 1 (2/4)
Financial Snapshot
i i lS h Key Ratios
K i
y‐o‐y change
Particulars 2011 2010 2009 2008
Total Income Profit (2011‐10)
Total Income
INR mn INR mn Profitability Ratios
Profit / Loss
6,000 600 Operating Margin
F H Net Margin
4,000 E G 400 Profit Before Tax Margin
2,000 200 Return on Equity
Return on Capital Employed
0 0 Return on Working Capital
20‐‐ 20‐‐ 20‐‐ 20‐‐ Return on Assets
Financial Summary Return on Fixed Assets
Cost Ratios
• The company incurred a net profit of INR ‐‐ mn in FY 20‐‐, as Operating costs (% of Sales)
compared to net profit of INR ‐‐ mn in FY 20‐‐ Administration costs (% of
• The company reported total Income of INR ‐‐ mn in FY 20‐‐, Sales)
registering an increase of x1% over FY 20‐‐
registering an increase of x1% over FY 20 Interest costs (% of Sales)
Interest costs (% of Sales)
Liquidity Ratios
• The company earned an operating margin of x2% in FY 20– an
Current Ratio
increase/decrease of ‐‐ percentage points over FY 20‐‐
Cash Ratio
• The company reported debt to equity ratio of ‐‐ in FY 20‐‐, an Leverage Ratios
increase/decrease of x3% over FY 20‐‐ Debt to Equity Ratio
Debt to Capital Ratio
b i l i
Performance Indicators
Interest Coverage Ratio
Indicators Value (22/02/2012) Efficiency Ratios
Market Capitalization (INR) A Fixed Asset Turnover
Total Enterprise Value (INR) Asset Turnover
B Current Asset Turnover
EPS (INR) C Working Capital Turnover
PE Ratio (Absolute) D Capital Employed Turnover
Source: Improved Decline
PERSONAL CARE MARKET IN INDIA 2012.PPT 12
13. Public: Domestic Company – Player 1 (3/4)
Key Business Segments Key Geographic Segments
Segment 1 Segment 4 Country
Segment 2 Segment 5 100%
Segment 3
A B C D 80%
100% 60%
100%
78% 77% 77% 78% 40%
50% 7% 9% 8% 8%
0% 0% 0% 0% 20%
12% 2% 12% 3% 12% 3% 12% 2%
0%
0%
20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐
Business Highlights (1/2)
Description News
• The xth largest FMCG concern in India posting revenues of INR ‐‐ bn
• Considered as the world’s largest T1 company
Performance
Performance
• The brand has over ‐‐ products in its portfolio in the Natural and Herbal space
• Has posted continuous growth year‐on‐year in sales and profits over the last ‐‐ quarters
Expansion • Has plans of investing INR ‐‐ mn in t2 which is slated to be a t3% export unit
Source:
PERSONAL CARE MARKET IN INDIA 2012.PPT 13
14. Public: Domestic Company – Player 1 (4/4)
Business Highlights (2/2)
Description News
• In 20‐‐ it acquired t4 which markets specialized t5 range to the t6 people
In 20‐‐, it acquired t4 which markets specialized t5 range to the t6 people
Acquisition
• Prior to this, it has acquired t7, a leading t8‐based personal care concern
• It has roped in t9 for its media planning mandate
Media Planning • T9 will look into media planning specific to particular range of products including skin
T9 will look into media planning specific to particular range of products including skin
care, hair oils and home care products
• The period 20‐‐‐‐‐ witnessed t10 launching t11 in rural parts of Uttar Pradesh and Bihar
which covered 6 districts of rural Bihar and 2 districts of rural UP
Corporate Social
• Has developed t12 which reaches out to the vulnerable sections of the society including
p y g
Responsibility
R ibilit
women and children, illiterate and unemployed towards sustainable development in 3 key
areas namely environment, economy and community
Source:
PERSONAL CARE MARKET IN INDIA 2012.PPT 14
15. Thank you for the attention
The Personal Care Market ‐ India report is part of Consumer Goods Industry Series.
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PERSONAL CARE MARKET IN INDIA 2012.PPT 15