This document provides an analysis of the FMCG (Fast Moving Consumer Goods) sector in India through SWOT, PEST, Porter's Five Forces, and market type analyses. Some key points: 1) The FMCG sector in India has strengths such as its large market size and role in the economy, but weaknesses include low rural market penetration and increasing costs. 2) Opportunities for growth include digital/e-commerce expansion and policy changes like GST, while threats include increased taxation and weather issues impacting consumption. 3) Political, economic, social and technological factors are analyzed in the PEST framework. 4) Porter's Five Forces analysis examines high competition and bargaining power of consumers

1. FMCG SECTOR
SWOT Analysis
STRENGHT WEAKNESS
1 One of the largest sectors in India Low penetration in rural markets as
compared to urban
2 Fourth largest in economy Increasing cost leading to an increase in the
cost of raw materials
3 Market size of US$13.1 billion year 2015
4 $37 billion in 2013 to $49 billion in 2016
OPPORTUNITY THREATS
1 Digitalcommunication, e-commerce and
premium products are foreseen as key
drivers for growth
0.25% hike on excise duty of cigarettes for
length not exceeding 65mm and by 15% for
cigarettes of other lengths was announced
2 Implement Goods and Service Tax bill
(GST bill) by April 2016, which would
provide a respite to the industry
plaguing from several taxation
structures
Stressed on rural consumption for the next
two-three quarters
shortfall in rains
3 Consumer care business which was up
by 10% yoy
4 Industry has lined up capex of around Rs.
500 crore
5 Government has allowed 100 percent
Foreign Direct Investment (FDI) in the
electronics hardware-manufacturing
sector through the automatic
6 51% FDI in multi-brand retail and 100
per cent in single-brand retail in order to
attract foreign investment for the sector
7 The market is estimated to grow to US
$100 billion by 2025
8 New value to customer, new players in
the value network and new technologies
for making and delivering the product or
service

2. PEST Analysis
POLITICAL ECONOMICAL
1 Transport and infrastructural
development in rural areas help in
distribution
Increase in disposableincome at 10% for the
next 8years
2 Restrictions in import policies 4th largest sector in India
3 Help for agricultural sectors GDP rate of India is increasing every year &
is expected to get better compared to
others
4 Good political stability hence leading to
better business
New policies being adopted by the
government & RBI to control inflation
Direct employment is estimated to be 6% of
turnover
SOCIAL TECHNOLOGICAL
1 Rural employment has increased as
there are factories set up over there in
order to make use of the tax relief
Technology has been simplified and
available in the industry
2 Major young population in India that has
led to an increase revenue
Foreign players help in high technological
development.
3 Distribution of income Companies will have to spend on R & D to
continuously find out more about the on
going trend
4 Change in lifestyle and increase in the
disposal income has led to an increase in
spending and growth of the FMCG
sector
5 Consumerism is helping the FMCG
sector to grow

3. Porters Five Forces Model
Rivalry amongst existing players
 Rivalry amongst existing players is very high as it’s a close knit market with high
competition
 Highly saturated industry
Potential Entrants
 FDI
 GST
 Licensing
 Food security bill
 Strong distribution network required
 High capital requirement
 Already existing strong brand names
 Low resistance and complex structure therefore firms can easily enter
 Development of substitute products
 There are complex needs that cannot be satisfied alone
 Plenty of substitutes available that can be replaced if consumers are not satisfied
 High consumer expectations
 Wide range of expectations give space for new product development
Bargaining power of suppliers
 Bargaining power of both raw materials and intermediate goods is not very high
 Many suppliers available
 No monopoly in supplier side because they are competing themselves
Bargaining power of consumers
 Many options available hence consumers are not reluctant to buy new products
 High bargaining power

4. Type of market
I would call the FMCG market as a market of perfect competition. There cannot be price
monopoly unless there is something more on the product improvement or better product
package is offered.