Indian Fmcg Industry

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  • Topic: Fast moving consumer goods, Good, Mumbai
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2012
Industry Analysis
FMCG
Products which have a quick turnover and relatively low cost are known as Fast Moving Consumer Goods. FMCG is the fourth largest in the Indian economy with a market size of $13.1 billion and is growing at a rapid pace.

Table of Contents

1. About the Sector I. II. Introduction Facts and figures

2. Indian Market I. Major Segments II. Buying Pattern of consumers 3. Scope of the Sector 4. Growth Factors 5. FMCG Analysis I. II. III. PEST SWOT Porter’s Five Force Model

6. Top FMCG Companies

7. References

About the Sector
I. INTRODUCTION
What is FMCG? Products which have a quick turnover and relatively low cost are known as Fast Moving Consumer Goods. These products are purchased repeatedly in small quantities as per the needs of an individual or family. FMCG is the fourth largest in the Indian economy with a market size of over Rs.1300 billion with an emphatic growth of 11 percent over the last decade. FMCG market of India is highly fragmented with a considerable part dominated by unorganized players selling unbranded and unpacked products. There are approximately 12-13 mn. Retail stores in India, of which 9 mn. are FMCG kirana stores. Mushrooming Indian population, mainly the middle class and rural segments, are a huge untapped opportunity for FMCG place. FMCG includes the production, distribution and marketing of consumer packaged goods, that is those categories of products which are consumed at regular intervals. Indian FMCG contains well-established distribution networks and intense competition between the organized and unorganized segments. A characteristic feature of FMCG sector is strong and competitive MNC presence across the entire value chain which ensures innovative product launches in the market from their parent’s portfolio. India is one of the major producers of livestock, milk, sugarcane, coconuts, spices and cashews. India happens to be the second largest producer of rice, wheat, fruits and vegetables. India has an abundant supply of caustic soda and soda ash, the chief raw materials used in the production of soap and detergents boosting the household section of the industry.

Facts and Figures
Figure1: Growth of FMCG sector relative to other competing sectors

Figure2: Low labor cost has been a driving factor for Indian FMCG sector

Figure3: Performance of BSE FMCG stocks are better than other BSE stocks

Figure4: India is second largest in terms of consumption

Indian Market
MAJOR SEGMENTS

The Indian FMCG marketing
mainly consists of following segments:      Food and Beverages Personal Care Tobacco Household Care Lighting

The relative market size of each segment is shown in the pie chart above.

Household Care: Household care segment is featured by intense competition and high level of penetration with an annual growth rate of 10-11 percent during the last five years With rapid urbanization, emergence of small pack size and sachets, the demand for the household care products is booming. In washing powder segment, HUL is the leader with ~38 per cent of market share. Other major players are Nirma, Henkel and Proctor & Gamble. Personal Care: Personal care segment includes personal wash products, hair care products, oral care products, cosmetics etc. The Indian skin care and cosmetics market is valued at $274 million and is dominated by HUL, Colgate Palmolive, Gillette India and Godrej. Personal wash can be further segregated into three segments namely Premium, Economy and Popular. HUL is the leader with market share of ~53 per cent; Godrej occupies second position with market share of ~10 per cent. Food and Beverages This segment comprises of the food processing industry, health beverage industry, bread and biscuits, chocolates & confectionery, Mineral Water and ice creams. The three largest consumed categories of packaged foods are packed tea, biscuits and soft drinks.

Buying Pattern of consumers
Figure6: Spending pattern of...
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