This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent

DRAFT10th February, 2015

$35BnDigitally influenced FMCG sales by 2020 (1/3rd of overall FMCG)

Infant Care, Beauty, Male GroomingDigital Pioneers of 2020

How to win?Winning strategy for Indian FMCGs

$5BnFMCG sold online by 2020 (50X growth)

250MnConsumers shopping online by 2020 (1/3rd of internet users)

Executive Summary

Consumers

Source: eMarketer; TRAI; IndiaStat; Euromontor

49% 25% 79% 53% 33% 58% 77% 79% 87%

Online Population (MM)

2014

658

300252

10884 83

50 395

China India US Brazil Indonesia Russia UK South Korea Norway

Internet

Penetration

Source: eMarketer; TRAI; IndiaStat; Euromontor; Morgan Stanley Research estimate

Screenagers Women Rural

By 2020

Indians will be online

650 Mn

*Screenagers: Born 1996-2005Source: comScore, United Nations (UN), Morgan Stanley Research estimate; Nielson Informate Smartphone Analytics Aug’14

Screenagers

*Screenagers: Born 1996-2005

Source: comScore, United Nations (UN), Morgan Stanley Research estimate; Nielson Informate Smartphone Analytics Aug’14

15-24

25-34

35-44

45-54

55+ 4%

10%

21%

35%

31%

200mins daily time spent on their phone today

100MnWill be

Shopping Online

2xTime spent by

working women

on internet

30%of Indian women

will be Online

200Mn+ Women

Source: IAMAI Digital Bharat, Google estimates, Bain-Google consumer research

Rural users

Source: CNNIC, IDC, Forrester, IAMAI, Morgan Stanley Research

6X growth in ONLINE SHOPPER base

2014 2016 2020

40

250

100

in m

illio

ns

Decoding the digital Influence

$35Bn Digital sales getting influenced by digital platforms

*Use internet at least once a month

• 1600 internet users (Male & Female)

• FMCG decision makers/ key influencers

• 13 cities across India in two different \ town-classes

• 8 FMCG categories

• Conducted between Oct - Dec 2014

Consumer Survey

Infant CareMale Grooming

Hair Care FoodsSkin care Oral careBeverages Home Care

Source: Bain-Google consumer research

35%Men strongly influenced by digital sources while

purchasing FMCG

22%women are influenced by digital sources while purchasing

FMCG

Source: Bain-Google consumer research; Numbers for women only

How To/Review videos

Brand website

Search engines

Social networking site

Online advertising1

2

3

4

5

Video/Banner/Text

With Influence coming from multiple digital platforms

© 2014 Forrester Research, Inc. Reproduction Prohibited

15

Year on Year Query Growth as of December 2014

Reflecting in faster growth in FMCG searches

97%

75%

57%55%

46%

38% 37%

Apparel Beauty Foods Infant Care Arts & Entertainment Travel & Tourism Finance

Source: Google internal, Growth of searches in Q4’14/Q4’13

Source: Bain-Google consumer research

Notes: Position on graph is based on relative ranking of categories. Women respondents considered for all rankings, except Male grooming

High

Low

Digital Density (% buying online)Low High

Digital Influence

on Purchase

Emergent Front-runners

Followers

Skin care Hair Care Male GroomingInfant Care

Oral care

Home Care Foods

Beverages

Beauty is set to explode on digital

2ndBiggest searched FMCG category

Only 15%Searches are branded

100%YOY growth in Shopping searches

Source: Google internal data for Oct-Nov’14

#1Searched category

in FMCG

Source: Google internal data for Oct-Nov’14

HighestInterest in Recipes in India

On YouTube

Top 5Most watched categories on

YouTube

Foods is the next big story

Channels

~50% online shoppers purchased

FMCG online

2in3buy more

when Shopping online

Consumers are already purchasing FMCG online…

40% women likely to purchase FMCG

in next 12 months

How likely are you to purchase any FMCG product online in the next 12 months? (Base: Women, Internet users)

Source: Bain-Google consumer research

Strong willingness in non-shoppers to buy

We expect India share to reach 5% by 2020

Notes: FMCG Online sales includes alcoholic drinks. Fresh food is excluded from overall FMCG sales.

Source: Euromonitor, TRAI, eMarketer, Bain analysis

$5BnFMCG Online Sales by 2020

0.3%

5.0%

2014 2020

50X Growth

Infant Care

Beauty

Male Grooming 25-30%

20-25%

8-10%

Notes: FMCG Online sales includes alcoholic drinks. Fresh food is excluded from overall FMCG sales.Source: Euromonitor, TRAI, eMarketer, Bain analysis

With the channel-mix of many categories

tilted towards online

How to Win?

Uncover category’s digital

truths

Wisely choose digital

battlefields

Ensure digital reinforces brand

strategy

Organize around consumers, not

screens

Re-allocate resources

• Impact of digital

• Profit pool shifts

• De-average consumers and portfolio

• Create seamless on/offline experiences that

• How digital fits within the brand’s strategy (vs. brand’s digital strategy)

• Create vs. just tell stories

• Deliver Perfect Online Sales Experience

• Shift media spends – follow your consumer

• Invest in technology/ IT/ Analytics

• Invest in new capabilities,

• Build new ecosystem partnerships

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Act NOW

Summary

$35BnDigitally influenced FMCG sales by 2020 (1/3rd of overall FMCG)

Infant Care, Beauty, Male GroomingDigital Pioneers of 2020

Act NOW

$5BnFMCG sold online by 2020 (50X growth)

250MnConsumers shopping online by 2020 (1/3rd of internet users)