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8/3/2019 FMCG Sector Report 3
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FMCG Sector
1
© 2011, BizVantage Confidential
8/3/2019 FMCG Sector Report 3
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2 © 2011, BizVantage Confidential
Indian FMCG sector size poised to reach US$ 47 bn by
2013 and US$ 74 bn by 2018, growing annually at 10-12%
By 2025, total consumption is likely to quadruple
making India the 5th largest consumer market.
Organized retail is expected to grow by 14-18% by 2015
thereby boosting FMCG growth.
India: An Emerging Consumer Market
Indian rural market currently worth US$ 9 bn is
expected to become a US$ 100 bn opportunity by 2025.
25
43
74
2008 2013E 2018E
Marketsize – US$ Bn
Source: Economic survey 2009-10, IBEF report
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Industry Overview
Indian FMCG industry worth ~ US$ 29 bn roughly constitutes 2.2% of India’s GDP.
Within the FMCG sector, Food products is the largest consumption category.
Strategic focus on rural marketing, innovations, niche consumer segments, exports,
life style products to further the current 10% annual sector growth.
2% 12%
43%8%
4%
4%
5%
22%
Baby care Fabric care
Food products Hair care
Household OTC products
Others Personal care
Key Players
Company Sales* (US$ Mn) Segments
HUL 3921.5Personal care, Food products, Household, Baby
care, Fabric care
Amul India 1771.1 Food and beverage products
Nestle India 1155.4 Food and beverage products
ITC ** 805.7 Personal care, Food products
Britannia 759.9 Food products
Dabur 635.9 Personal care, Food products, Household
Marico Industries 449.3 Personal care, Household, Food products
GSK Consumer 447.9 Food products, Personal care
Cadbury India 430.1 Food products
Colgate Palmolive 391.8 Personal care, Oral care
Procter & Gamble 388.5 Personal care, Household , Baby care, Fabric care
Godrej (GPCL) 280.5 Personal care, Fabric care
Key Categories
Source: Relevant company websites, IBEF report
*Yearly sales as of March 2010, ** FMCG business excluding tobacco
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Key Trends: Increasing industry horizons, innovation
emergence of life style products and focus on rural consumers
ConsolidationIndian FMCG companies are either increasing their focus on certain segments or
are consolidating their existing business portfolios.
Eg. Dabur India merged its wholly owned subsidiary Dabur Foods with itself.
Product Innovation
Rural Marketing
Lifestyle products
Expanding horizons
Several companies have taken to innovation by launching or customising their
existing product portfolios for new consumer segments.
Eg. Emami launched men’s fairness cream, Nestle/Amul launched probiotic
products by providing active ingredients in regular offerings, GSK launched foodles.
Lifestyle and premium range products are the next target product segment among
Indian FMCG players.
Eg. P&G launched Olay range of products, HUL launched Aviance.
Several Indian companies are exploring the business potential of overseas markets
and under-penetrated regional markets
Eg. Tata Tea acquired 30% stake in Energy Brands Inc (US based specialty watercompany), Marico is marketing beauty soaps in several African markets
Rural markets account for almost 30% of the consumption pie. Companies are
devising exclusive marketing strategies gain rural foothold.
Eg. ITC’s e-choupal initiative, GSK launched Asha (low cost variant of Horlicks),
Britannia launched Tiger Iron Zor, Nestle launched Maggi Rasile
Source: IBEF report, ICMR, D&B Economy outlook, Unitedworld live content engine
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Lifestyle & Premium products
Fast evolving lifestyles, rapid urbanization andincreasing disposable incomes there exists anopportunity for high-end products.
Rural Market – New growth frontier
With more than 33% of Indian consumer basepresent in rural markets, it will be a key growthdriver for domestic business.
Innovation
Indian consumers being highly receptive to newproducts demonstrates an opportunity to offernew products targeting specific segments.
Geographical Expansion
Fast growing emerging markets as well asculturally compatible markets offer a newdimension to further growth.
Growth drivers, Challenges and Opportunities
Opportunities Growth drivers
Challenges
Increasing disposable income
Growth in organized retail
High consumer confidence
Well established distribution network
Consumer receptiveness to innovation Rapid urbanization and changing lifestyles
Diverse consumer preferences Increasing competition
Rising logistics, procurement costs
Ability to win rural consumers
Source: IBEF report, D&B Economy outlook,
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Strategic Imperatives
1 Foray and win in rural markets
2
3
4
5
6
7
The road ahead…
Build and expand product portfolio
Unleash the power of innovation
Deliver on environmental sustainability commitments
Enhance customer service
8 3rd Party manufacturing
9 Human resource development
Diversify across geographies/categories/products
Manage costs across supply chain
Source: IBEF report, BizVantage analysis
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