The presentation gives a brief about the FMCG sector in India.

1. Presented by:
A1Group

2. Introduction
Fast-moving consumer goods (FMCG) or consumer
packaged goods (CPG) are products that are sold quickly
and at relatively low cost.
Examples include non-durable goods such as soft
drinks, toiletries, and grocery items.
Though the absolute profit made on FMCG products is
relatively small, they generally sell in large quantities, so the
cumulative profit on such products can be substantial.

3. Background
In India, companies like ITC, HLL, Colgate, Cadbury
and Nestle have been a dominant force in the FMCG
sector well supported by relatively less competition
and high entry barriers (import duty was high).
These companies were, therefore, able to charge a
premium for their products.
The margins were also on the higher side. With the
gradual opening up of the economy over the last
decade, FMCG companies have been forced to fight
for a market share.

4. Major Players
Hindustan Unilever Ltd.
ITC (Indian Tobacco
Company)
Nestlé India
GCMMF (AMUL)
Dabur India Ltd
Asian Paints (India)
Cadbury India
Britannia Industries Ltd.
Procter & Gamble Hygiene
and Health Care
Marico Industries Ltd.
 Colgate-Palmolive
(India) Ltd.
Gillette India Ltd.
Godfrey Phillips
Henkel Spic
Johnson & Johnson
Modi Revlon
Wipro
Nirma Ltd
Amul India

5. MARKET STRUCTURE

6. Regulatory Framework
Investment Approval: Automatic investment approval up to 100 per cent
foreign equity for NRI and overseas corporate bodies. These investments are
allowed in food processing segments such as coffee and tea
FDI in organized retail: India currently allows 100 per cent FDI in Cash &
Carry segment and 51% in single-brand retail, which is expected to be further
increased to 100%. India is also expected to allow 51% FDI in multi-brand
retail, which will boost the nascent organized retail market in the country
Priority Sector: The Government of India recognizes food processing and
agro industries as priority sectors

7. Relaxation of license rules: Industrial licenses are not required for almost all food
and agro-processing industries, barring certain items such as beer, potable alcohol and
wines, cane sugar, and hydrogenated animal fats and oils
as well as items reserved for exclusive manufacturing in the small-scale sector
Statutory Minimum Price: In October 2009, the government amended the
Sugarcane Control Order, 1966, and replaced the Statutory Minimum Price (SMP) of
sugarcane with Fair and Remunerative Price (FRP) and the State- Advised Price (SAP)

8. Top 10 food and beverage makers score poorly in social tests.
 Unilever looks to remain the leading player in deodorants.
 UB plans new product rollouts regularly to strengthen
presence in market.
 From Unilever to Himalaya it's no more testing cosmetics
on animals.

9. Eurostar expands FMCG footprint with exclusive rights
for top consumer brands.
 Croda's profit from customers like P&O rises on strong
consumer care sales.
 TN coconut oil under lens in Kerala over adulteration
charges

10.
 As per the Consumer Survey by KSATechnopak, of the total
consumption expenditure, almost 40% and 8% was accounted
by groceries and personal care products respectively.
 India offers a large and growing market of 1 billion people of
which 300 million are middle class consumers.
 India offers a vibrant market of youth and vigor with 54% of
population below the age of 25 years.
 Domestic demand is expected to double over the ten-year
period from 1998 to 2007.
Current scenario

11.  The number of households with "high income" is expected
to increase by 60% in the next four years to 44 million
households.
 The Indian FMCG sector is the fourth largest sector in the
economy with a total market size in excess of US$ 13.1
billion.
 The FMCG market is set to treble from US$ 11.6 billion in
2003 to US$ 33.4 billion in 2015.
 India is one of the world’s largest producers for a number
of FMCG products but its FMCG exports are languishing at
around Rs 1,000 crore only.

12.  Personal Wash:-
The market size of personal wash is estimated to
be around Rs. 8,300 Cr.
 Detergents:-
The size of the detergent market is estimated to
be Rs. 12,000 Cr.
 Personal Care
• Skin Care:-
The total skin care market is estimated to be around Rs.
3,400 Cr.
• Hair Care:-
The hair care market in India is estimated at around Rs.
3,800 Cr.

13. • Shampoos:-
The Indian shampoo market is estimated to be
around Rs. 2,700 Cr.
• Oral Care:-
The total toothpaste market is estimated to be around
Rs. 3,500 Cr.
 Food & Beverages
• Food Segment :-
This category has 18 major brands aggregating Rs.
4,600 Cr.

14.  Strengths:
• Low operational costs
• Presence of established distribution networks in both
urban and rural areas
• Presence of well-known brands in FMCG sector
 Weaknesses:
• Lower scope of investing in technology and achieving
economies of scale, especially in small sectors
• Low exports levels
• "Me-too” products, which illegally mimic the labels of the
established brands. These products narrow the scope of
FMCG products in rural and semi-urban market.

15.  Opportunities:
• Untapped rural market
• Rising income levels, i.e. increase in purchasing power
of consumers
• Large domestic market- a population of over one billion.
• Export potential
• High consumer goods spending
 Threats:
• Removal of import restrictions resulting in replacing of
domestic brands
• Slowdown in rural demand
• Tax and regulatory structure

16. CONTRIBUTION IN INDIAN ECONOMY
 Fourth largest sector contributed in indian
economy.
 Contributed to 2.5% of GDP(gross domestic
product)
 FMCG predicted to touch a networth of us$ 47
billion in 2013 & 95$ billion by 2018
 Urban market growth rate is 25% & Rural is 40%