If you can't read please download the document
Upload
ashish-chopra
View
4
Download
0
Embed Size (px)
Citation preview
Source: Emami Reports, Dabur Reports, AC Nielsen, McKinsey Global Institute (MGI)
titled The Bird of Gold, Booz & Company, Aranca Research
Favourable demographics and rise in
income level to boost FMCG market
Rise in rural consumption to drive the
FMCG market
Total consumption
expenditure set to increase
Overall FMCG market expected to
increase at a CAGR of 14.7 per cent to
USD110.4 billion during 2012 20
The rural FMCG market expected to
increase at a CAGR of 16.3 per cent to
USD100 billion during 2011 25
Total consumption expenditure to reach
nearly USD3600 billion by 2020 from
USD991 billion in 2010
36.8
110.4
2012 2020E
FMCG market size (USD billion)
CAGR: 14.7%
12
100
2011 2025
Rural FMCG market size (USD billion)
CAGR: 16.3%
991
3600
2010 2020
Consumption expenditure (USD billion)
CAGR: 13.8%
Source: Emami Reports, Dabur Reports, AC Nielsen, McKinsey Global Institute (MGI) titled The Bird of Gold, Aranca Research
Note: Germany population is estimated to reach 81.26 million by 2016
double the total population of the US
(361.6 million) by 2030
the total population in Germany by 2016
set to increase
Working population (aged between 15 and
64 years) estimated to increase from 780
million in 2011 to 900 million by 2030
estimated to reach 267 million by 2016
from 160 million in 2011
is estimated to rise to USD631 in 2020
from USD411 in 2010
780
900
2011 2030
Working population (In million)
CAGR: 0.8%
160
267
2011 2016
Middle income population (In million)
CAGR: 10.8%
411 631
2010 2020
Annual per capita disposable income in rural region (USD)
CAGR: 4.3%
The engineering sector is delicensed; 100 per cent FDI is allowed in the sector Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 February 2012, making up 8.6 per cent of total FDI into the country in that period
Growing demand
Source: Emami, Estimates by AC Nielsen, Live Mint, Jan 13, Aranca
Note: FTMTS - First Time Modern Trade Shoppers
Growing demand
Rising incomes and growing youth
population have been key growth
drivers of the sector
Brand consciousness has also
aided demand
First Time Modern Trade
Shoppers spend is estimated to
triple to USD1 billion by 2015
Tier II/III cities are witnessing
faster growth in modern trade
Attractive opportunities
Low penetration levels in rural market offers room for growth
Disposable income in rural India has increased due to the direct cash transfer scheme
Growing demand for premium products
Exports is another growth segment
Policy support
Investment approval of up to 100 per cent foreign equity in single brand retail and 51 per cent in multi-brand retail
Initiatives like Food Security Bill and direct cash transfer subsidies reach about 40 per cent of households in India
Higher investments
Industry has witnessed healthy FDI inflow, as the sector accounted for
FDI inflow over April 2000 to March 2013
Many players are expanding into new geographies and categories
Organised retail share is expected to double to 14-18 per cent of the overall retail market by 2015
2011
Rural
FMCG
market size:
USD
12billion
2025E
Rural
FMCG
market size:
USD
100billion
Advantage
India
Source: HUL
Notes: OTC is over the counter products; ethicals are a range of pharma products
FMCG
Household care Personal care Food & Beverages
Fabric wash, Household cleaners
Oral care, hair care, skin care, cosmetics/deodorants, perfumes, feminine hygiene
and paper products
Health beverages, staples/cereals, bakery
products, snacks, chocolates, ice cream, tea/coffee/soft drinks, processed fruits and
vegetables, dairy products, and branded flour
Health care
OTC products and ethicals
Source: Dabur Annual Report 2011-12, Economic Times Apr 2013, May 2013, Emami Annual
Report 2011-12, Mckinsey Global Institute, Aranca Research
FMCG is the fourth largest sector in the Indian economy
The FMCG sector has grown at an annual average of about 11 per cent over the last decade
Retail market in India is estimated to reach USD450 billion by 2015, with organised retail accounting for a 14 18 per cent
share; this is likely to boost revenues of FMCG companies
Indian FMCG industry (USD
billion)
Gross block of FMCG industry
(USD billion)
Market size of chocolates (USD
million)
Market size of personal care
(USD billion)
(Per cent) >50
Source: Booz & Company, Dabur, AC Nielsen, Aranca Research
Trends in FMCG revenues over the years
(USD billion)
The FMCG sector in India generated revenues worth
USD36.8 billion in 2012, a 5.7 per cent rise compared to the
previous year
The strong growth in 2012 should come as no surprise
given the impressive performance of the sector over the
years
Over 2006-12, the revenues posted a CAGR of
15.2 per cent 15.7
17.8 21.3
24.2
30.2
34.8 36.8
2006 2007 2008 2009 2010 2011 2012
CAGR: 15.2%
Source: Dabur, Aranca Research
Market break-up by revenue (2009) is the leading segment, accounting for 43.0 per cent of the overall market
Personal care (22.0 per cent) and fabric care (12.0 per cent)
are the other leading segments
43%
22%
12%
8%
4%
4% 2%
5% Food products
Personal care
Fabric care
Hair care
Households
OTC products
Baby care
Others
Source: Dabur, AC Nielsen, Aranca Research
Urban- rural revenue break-up (2011) The urban segment is the largest contributor to the sector, accounting for over two-thirds of total revenue
Semi-urban and rural segments are growing at a rapid pace;
they currently account for 33.5 per cent of revenues
FMCG products account for 53.0 per cent of total rural
spending
66.5%
33.5% Urban
Rural
Source: Mckinsey Global Institute April 2010, Aranca Research
The shift of households from the deprived and aspirers
category having income less than USD1,985.9 per annum
to the seekers and strivers category having income between
USD4,413.1 and USD22,065.3 per annum will change the
outlook for the industry over the coming years
The number of middle class households (earning between
USD4,413.1 and USD22,065.3 per annum) will increase
more than fourfold to 148 million by 2030 from 32 million in
2010
It is estimated that the population earning more than
USD22,065.3 per annum would increase from 1 per cent in
2008 to 3 per cent by 2020 and 7 per cent by 2030
The rising number of middle class and the rich has
accelerated the purchase of premium products
All India household by income bracket (2010)
1% 3% 7% 2% 6%
17% 12%
25%
29% 35%
40%
32% 50%
26% 15% Deprived
(22065.3)2008 2020 2030
Income segment Million Household,100%
222 273 322
Source: Mckinsey Global Institute: The Bird of gold AC Nielsen,
Aranca Research
Annual per capita disposable income level
in rural region (USD)
In 2012, rural India accounted for more than 33 per cent of
the total FMCG market
Total rural income, which is currently at around USD572
billion, is projected to reach USD1.8 trillion by FY21
During 2010-20, annual per capita disposable income in the
rural region is estimated to increase at a CAGR of 4.4 per
cent to USD631
As income levels are rising, there is also a clear uptrend in
the share of non-food expenditure in rural India
Share of non-food expenditure in rural India rose from 36.0
per cent in FY08 to 46.4 per cent in FY10
411
516
631
2010 2015 2020
Source: AC Nielsen, Aranca Research, Dabur Reports
Note: * - MAT, MAT - Moving Annual turnover
FMCG industry Rural (USD billion) The Fast Moving Consumer Goods (FMCG) sector in rural and semi-urban India is estimated to cross USD20 billion by
2018 and USD100 billion by 2025
During September 2011 to September 2012, FMCG Moving
Annual Turnover (MAT) increased 16.4 per cent to USD11.7
billion in rural areas
10.0
11.7
Sep '11* Sep '12*
CAGR: 16.4%