Fmcg sector in india _by - mayank saxena

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THE GIST OF FMCG SECTOR IN INDIA - By - MAYANK SAXENA

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Fmcg sector in india _by - mayank saxena

  1. 1. FMCG SECTOR IN INDIA By- MAYANK SAXENA IBS MUMBAI
  2. 2. INTRODUCTION  Fast Moving Consumer Goods (FMCG) goods, popularly named as consumer packaged goods  Its principal constituents are household care, personal care, food & beverages  characterized by a well established distribution network, low operating cost ,lower per capita consumption  have intense competition between the organized and unorganized segments with quick turnover & low cost
  3. 3. INDUSTRY OVERVIEW  It is the fourth largest sector the economy with a total market size of US $13.1 billion 7 constitutues 2.15 % of GDP  FMCG sector has grown at an average of 11% a year; in the last five years, annual growth accelerated to 17%  It is highly related with population and expected to maintain a robust growth rate in india  Rural India accounts for more than 700 Million consumers or 70% of the Indian population and accounts for 40% of the total FMCG market
  4. 4. SWOT ANALYSIS STRENGHTS • Moderate operating costs • Presence of established distribution networks in both urban and rural areas • Presence of well-known brands in FMCG sector • Favorable government policies WEAKNESSES • Lower scope of investing in technology and achieving economies of scale, especially in small sectors • Low exports levels • Counterfeit Products OPPORTUNITIES • Untapped rural market • Rising income levels, i.e. increase in purchasing power of consumers • Large domestic market- a population of over one billion • Export potential • High consumer goods spending THREATS •Removal of import restrictions resulting in replacement of domestic brands • Slowdown in rural demand • Tax and regulatory structure
  5. 5. POLITICAL FACTORS:  GST REGIME & FDI  TRANSPORTATION & INFRASTRUCTURAL DEVELOPMENT IN RURAL AREAS HELPS IN DISTRIBUTION NETWORK  RESTRICTIONS IN IMPORT POLICIES HELP FOR AGRICULTURAL SECTOR ECONOMICAL FACTORS  GDP RATES INCRESES ALONGWITH  INCREASE IN DISPOSABLE INCOME  INDIAN FMCG HAS RECORDED 16% SALES GROWTH IN LAST FISCAL  IT IS 4TH LARGEST SE CTOR OF INDIA SOCIAL FACTORS  RURAL EMPLOYMENT  VOLUME DRIVEN GROWTH IN RURAL MARKET  MAJOR YOUNG POPULATION CAN INCREASE REVENUE  INDIAN CULTURE ,SOCIAL & LIFE STYLES ARE CHANGING DRASTICALLY TECHNOLOGICAL FACTORS  TECHNOLOGY HAS BEEN SIMPLIFIED & AVAILABLE IN FMCG INDUSTRY  FOREIGN PLAYERS HELP IN HIGH TECHNOLOGICAL DEVELOPEMENT PEST ANALYSIS (FMCG)
  6. 6. TOP FIVE FMCG COMPANIES
  7. 7. HINDUSTAN UNILEVER LTD
  8. 8.  It is India's largest consumer goods company based in Mumbai, Maharashtra.  It is owned by the British-Dutch company Unilever which controls 52% majority stake in HUL.  HUL was formed in 1933.  Its products include foods, beverages, cleaning agents and personal care products.  Revenue22,116 crore (US$4.03 billion)(2011-2012)  Net income2,691 crore (US$489.76 million)(2011-2012)  Employees-16,500 (2011)  Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country
  9. 9. ITC LTD
  10. 10.  It was formed in 1970 by Henry Overton Wills and Yogesh Chander Deveshwar, (Chairman).  Headquarters in Kolkata, West Bengal, India.  In FMCG, ITC has a strong presence in : 1. Cigarettes 2. Foods 3. Apparel 4. Personal care 5. Stationery 6. Safety Matches and Agarbattis
  11. 11. NESTLE’ INDIA
  12. 12.  It is a multinational nutritional and health-related consumer goods company headquartered in Vevey, Switzerland. It is the largest food company in the world measured by revenues.  Nestlé was listed No. 1 in the Fortune Global 500 as the world's most profitable corporation.  Nestlé's products include baby food, bottled water, breakfast cereals, coffee, confectionery, dairy products, ice cream, pet foods and snacks.  Nestlé's india’s first production facility was set up in 1961 at moga (punjab)  The Nestlé india head office is located at Gurgaon along with other branch offices in Delhi,Mumbai,Chennai and kolkata.  It has 2,50,000 employees,500 factories and 8000 range of products across the globe.
  13. 13. DABUR INDIA
  14. 14.  Dabur India Limited is the fourth largest FMCG Company in India with interests in Health Care, Personal Care and Food Products.  It is public company listed in NSE and BSE.  it has 17 ultra-modern manufacturing units spread around the globe and its products marketed in over 60 countries.  Products-Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola & Real.  It is most famous for Dabur Chyawanprash and Hajmola.  Founded in 1884 and the Founder is Dr. S K Burman,in kolkata (west bangal) and The company headquarters are in Ghaziabad,Uttar Pradesh, India.  Net income(INR) 1475 Crore (2008-09).Total assets(INR) 1559 crore (2008- 09).Employees3000 (Approx.)
  15. 15. CADBURY INDIA
  16. 16.  Cadbury India began its operations in India in 1948 by importing chocolates.  Its Headquarters in Mumbai, India.  It now has manufacturing facilities in Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh) and sales offices in Ne Delhi, Mumbai, Kolkata and Chennai.  Products Cadbury Dairy Milk, 5-star, Perk, Gems, Eclairs, Oreo and Bournvita.  It is the market leader in the chocolate confectionery business with a market share of over 70%.  The Brand Trust Report, India Study, 2011 published by Trust Research Advisory ranked Cadbury in the top 100 most trusted brands list.  Cadbury has worked with the Kerala Agricultural University to undertake cocoa research.  Current employees are 2000.
  17. 17. GOVERNMENT POLICIES  Investment Approval: Automatic investment approval up to 100 per cent foreign equity for NRI and overseas corporate bodies. These investments are allowed in food processing segments such as coffee and tea  FDI in organized retail: India currently allows 100 per cent FDI in Cash & Carry segment and 51% in single-brand retail, which is expected to be further increased to 100%. India is also expected to allow 51% FDI in multi-brand retail, which will boost the nascent organized retail market in the country  Priority Sector: The Government of India recognizes food processing and agro industries as priority sectors  Relaxation of license rules: Industrial licenses are not required for almost alk food and agro- processing industries, barring certain items such as beer, potable alcohol and wines, cane sugar, and hydrogenated animal fats and oils as well as items reserved for exclusive manufacturing in the small- scale sector
  18. 18. Investment in FMCG sector  The sector is considered defensive, which means its stocks are in high demand when the markets are falling  the demand for consumer goods, daily necessities like food and toothpastes, remains stable  FMCG stock indices have been performing quite well with CNX FMCG index on the National Stock Exchange returning 28.94% and the Bombay Stock Exchange FMCG index rising 27.26% in the one year to 26 April 2013
  19. 19. Contd…  in the January-March quarter, FMCG companies did well due to lower input costs. "Most FMCG companies that we track performed reasonably well in the last quarter despite the slowdown due to fall in input costs  "Government policies that have been positive for demand and strong economic activity until last year helped earnings of FMCG companies  Hindustan Unilver's (HUL's) parent Unilever Plc wants to buy a 22.52% stake in the Indian unit at Rs 600 per share. The market price of the stock was Rs 595 on 13 June 2013. After the open offer, Unilever will hold 75% in the company
  20. 20.  GlaxoSmithKline Plc increased stake in its Indian arm, GlaxoSmithKline Consumer Healthcare, from 42.3% to 72.5%.

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