This document discusses the fast moving consumer goods (FMCG) sector in India. It provides background on major players in the Indian FMCG market such as Hindustan Unilever Ltd., ITC, Nestle India and others. It then analyzes the market structure, with food and beverages making up 53% of the market. The document outlines opportunities for growth in the FMCG sector in India, such as the large untapped rural market and rising income levels. It also presents a SWOT analysis and notes that the FMCG sector is the fourth largest in the Indian economy, contributing 2.5% to India's GDP.

1. Presented by:
Sudhanshu Pandey

2. Introduction
 Fast-moving consumer goods (FMCG) or consumer packaged goods
(CPG) are products that are sold quickly and at relatively low cost.
 Examples include non-durable goods and soft drinks, toiletries and grocery
items.
 Though the absolute profit made on FMCG products is relatively small they
generally sell in large quantities, so the cumulative profit on such products
can be substantial.

3. Background
 In India companies like ITC, HLL, Colgate, Cadbury, Parle, Britannia and
Nestle have been a dominant force in the FMCG sector well supported by
relatively less competition and high entry barriers.
 These companies were therefore able to charge a premium for their
products.
 The margin were also on the higher side with the gradual opening up of the
economy over the last decade, FMCG companies gave been forced to fight
for a market share.

4. Major Players
 Hindustan Unilever Ltd.
 ITC (Indian Tobacco Company)
 Nestle India.
 Dabur India Ltd.
 Cadbury India.
 Britannia Industries Ltd.
 Parle Biscuits Ltd.
 Amul India.
 Asian Paints (India)
 Gillette India Ltd.
 Wipro
 Nirma Ltd.

5. Market Structure
53%
20%
15%
10%
2%
Food and Beverages
Personal Care
Tobacco
Household care
Lightening

6. Current Scenario
 As per Consumer Survey by KSATechnopak, of the total consumption
expenditure almost 40% and 8% was accounted by groceries and personal
care products respectively.
 India offers a large and growing market of 1 billion people of which 300
million are middle class consumers.
 India offers a vibrant market of youth and vigor with 54% of population
below the age of 25 years.
 Domestic demand is expected to double over the ten-year period from 1998
to 2007.

7.  The number of households with “high income” is expected to increase by
60% in the next four years to 44 million households.
 The Indian FMCG sector is the fourth largest sector in the economy with a
total market size in excess of US $13.1 billion.
 The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$
33,4 billion in 2015.
 India is one of the world’s largest producers for a number of FMCG
products but its FMCG exports are languishing at around Rs.1,000 crore
only.

8. SWOT Analysis
 Strengths:
o Low operational costs.
o Presence of established distribution networks in both urban and rural
areas.
o Presence of well-known brands in FMCG sector.
Weakness:
o Lower scope of investing in technology and achieving economies of
scale, especially in small sectors.
o Low exports levels.
o “Me-too” products which illegally mimic the labels of the established
brands. These products narrow the scope of FMCG products in rural
and semi-urban market.

9. SWOT Analysis
 Opportunities:
o Untapped rural market.
o Rising income levels i.e. increase in purchasing power of consumers.
o Large domestic market- a population of over one billion.
o Export potential.
o High consumer goods spending.
Threats:
o Removal of import restrictions resulting in replacing of domestic
brands.
o Slowdown in rural demand.
o Tax and regulatory structure.

10. Contribution to Indian economy
 Fourth largest sector contributed in Indian economy.
 Contributed to 2.5% of GDP (Gross domestic product).
 Urban market growth rate is 25% and Rural is 40%.