ASHISH K NAINAN
Introduction to FMCG
Porter’s 5 force model & BCG Matrix - Procter and Gamble
4P’s –ITC Limited.
SWOT,Brand laddering,STPD,Brand etc.
Dabur- Journey from herbal ayurvedic to a global FMCG giant.
FMCG – THE BIG STORY
Fast Moving consumer goods – How fast are
they moving in India.
FMCG Stands for fast moving consumer goods.
The fast-moving consumer goods (FMCG) sector is an important contributor to India’s GDP
and it is the fourth largest sector of the Indian economy.
It broadly constitutes 4 product categories:
Home care products
Personal care products
Food and beverages.
Spirits and tobacco
In India, the fmcg sector is roughly worth $35billion and grows at an industry staggering
rate of 17% y-o-y.
Rise in rural income has given a boost to the FMCG industry in particular.
Products belonging to the FMCG segment generally have the following
They are used at least once a month
They are used directly by the end-consumer
They are non-durable
They are sold in packaged form
They are branded
MORE DATA AND STATISTICS
Major FMCG companies in India:
Unilever India, Procter and Gamble India,Himalaya,Nirma,Colgate-
Benckiser,etc to name few.
Common FMCG products include food and dairy
products, glassware, paper products, pharmaceuticals, consumer
electronics, packaged food products, plastic goods, printing and
stationery, household products, photography, drinks etc. and some
other examples of FMCG products are coffee, tea, dry cells, greeting
cards, gifts, detergents, tobacco and cigarettes,watches, soaps etc
Some of the merits of FMCG industry are low operational cost, strong
Population growth is another factor which is responsible behind the
success of this industry.
The Indian FMCG sector is highly fragmented, volume driven and
characterized by low margins.
The sector has a strong MNC presence, well established distribution
network and high competition between organized and unorganized
FMCG products are branded while players incur heavy
advertising, marketing, packaging and distribution costs.
The pricing of the final product also depends on the costs of raw
The growth of the sector has been driven by both the rural and urban
India is becoming one of the most attractive markets for foreign FMCG
players due to easy availability of imported raw materials and
cheaper labour costs.
URBAN VS RURAL
The urban segment is the biggest contributor to the sector, accounting for two-thirds
of total FMCG sector revenue. The semi-urban and rural segments which are
growing at a brisk pace, currently account for 33.5% of revenues of the FMCG
sector. FMCG products account for 53% of total rural spending. During FY 11, over
80% of FMCG products grew at a faster pace in rural markets as compared to urban
ones with premium skin care brands growing twice as fast in rural areas than urban
brands. Lower priced packs have increased the penetration of the FMCG sector in
rural India. The sectors that are witnessing high growth include salty snacks, refined
edible oil, healthcare products, iodised salt, etc. Hair oils, toothpastes and
shampoos have quite high penetration in both urban and rural markets while the
sales of instant noodles, floor cleaners and hair dyes is increasing in rural markets
due to higher awareness. There are a total of 12-13 million retail outlets in India, with
kirana stores being the majority of them. Some of the major FMCG players in India
include ITC, HUL, Nestle, Dabur, Godrej Consumer, etc.
SCOPE IN INDIA- AT A GLANCE
Huge growth potential as the per capita consumption of almost all products in the
country is amongst the lowest in the world.
Prospect could be increased further if these companies can change the consumer's
mindset and offer new generation products.
Due to agro-economic diversity, availability of raw materials gives India the
Low cost labour gives India a competitive advantage.
Indian companies have their presence across the value chain of FMCG sector, right
from the supply of raw materials to packaged goods in the food-processing sector.
Largely dependent on rural demand to garner volumes in 2013 when sales of
discretionary items were affected in a slowing market.
India’s FMCG market is mature, competitive, and crowded with local and global
brands. In this market, innovation is critical for:
• Remaining competitive
• Generating new avenues for sales and profits
• Driving growth by entering new categories through relevant innovation
• Increasing market share and moving towards market dominance positions in:
- Brand share
- Overall FMCG market share
- Category share
• Growing product and category penetration
• Creating products that match consumers’ evolving tastes, preferences and needs
• Reaching new customers
• Growing the share of wallet from current customers