INTRODUCTION

FMCG SECTOR generally deals with FMCG products or Fast

Moving Consumer Goods
FMCG products have a quick turnover and relatively low cost
Indias FMCG sector is 4th largest Sector in the economy and
contribute to around 3million employment opportunities
FMCG Market is in excess of Rs. 85,000 Crores
It includes household care, personal care , food & beverages
FMCG Industry is characterized by a well established distribution
network, low operating cost, lower per capital consumption and
intense competition between the organized and unorganized segments

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 FMCG Products
Detergents Shampoos
Confectionaries

(Rs. 12,000 Cr.) (Rs. 2,700 Cr.)

(Rs. 2,100 cr.)

Beverages Soaps Creams

(Rs. 4,000 Cr.) (Rs. 3,500 Cr.) (3,400 Cr.)

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GLOBAL SCENARIO
12 Per capita
Per Capitaconsumption
Consumption(US$)in (US$)

10

0
India China Thailand South Africa

Laundry Shampoo Skincare Deodrants

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FMCG Market
(Indian Market)
 Market Analysis

Organized Retail change the industry

FMCG market is expected to increase

at 11.9% to touch $103.7B
by 2020 from $47.3 billion in 2015.

Retail market in India reach $1 trillion

by 2020 from $600B in 2015.
 Sector Break-Up

Hair Care is 23% of total market

Followed by Foods 18%,
Health Supplements 16%,
Oral Care 16% and OTC & Ethicals 10%
 Top selling FMCG by Revenue

Biscuits market is around $4.1B (2015).

(Britannia has 28% market share by value)

House hold items Packaged atta,

market is $1.2B in 2015
& expected to be $2.5B in 2019-20

Soft drinks market reached around $10.64B in 2015

& carbonated drinks stood at $4.09B
and fruit juice market stands at $1.31B
 Market Break-Up

The urban segment 65% of total revenue

and market size of around $20.74B in
2015

Semi-urban and rural segments

are growing at a rapid pace;
they currently account for
35% of revenues
 Rural Segment Quickly Catching Up

Total rural income $572B in 2015 which is

projected to $1.8T by FY21

Indias rural capita disposable income is

estimated to increase at 4.4% to $631 by 2020

As income levels are rising, there is also a clear uptrend

in the share of non-food expenditure in rural India
 Increasing Sales Top FMCG Companies

Financial performance of leading 10 FMCG companies

over the past 8 quarters displays that
the industry has grown at average 16-21%
in the past two years

Consumer Products Manufactures ITC,

Godrej Consumer Products Limited (GCPL),
Dabur & Marico reported health set sales in
FY15 & FY16

ITC (FMCG) has generated highest revenue till FY16

 Large
Market

Rise of Rural
FDI Support
Consumer

Growth
Drivers
Growing
Popularity of Increasing per
organized Capita Income of
Retail Urban population

Changing
Profit &
Mind Set of
Consumer
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TOP 3 INDIAN FMCG COMPANIES
DABUR

Headquarters in Ghaziabad,Uttar Pradesh

Largest ayurvedic medicine and related

products manufacturer

Revenue of over 8,436 crore

Experience of over 131 years

AMUL
A-Anand M-Milk U-Union L-Limited

Headquarters in Anand, Gujarat

No.1 Dairy brand in India

Revenue of over 23000 crore

Formed in 1946
ITC:

Headquarters in Kolkata

Turnover of US$8billion

Rated among worlds best big companies

Incorporated in 1910
 FMCGs GDP Contribution in
India
The FMCG sector revenues reached US$ 9.7 billion in FY15 and is
expected to reach US$ 12.5 billion in FY16

FMCG market expected to grow at CAGR of 13 per cent from FY15

to FY20

Around two third of the total revenue is generated from

urban population and rest is generated from rural population

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 FDI Policy

100% FDI in Single brand Retail Sector

51% FDI in Multi brand Retail Sector

24% foreign equity is permitted in the small-scale sector

It helps all FMCG companies to grow up at higher level

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ADVANTAGES TO INDIA:
The Indian FMCG sector, with a market size of US$ 25 billion (200708 retail
sales), constitutes 2.15 per cent of Indias GDP.
The industry is poised to grow between 10 to 12 per cent annually.
A well-established distribution network spread across six million retail outlets
(including two million in 5,160 towns and four million in 627,000 villages) low
penetration levels, low operating costs and intense competition between the
organized and unorganized segments are key characteristics of this sector.
Market Contribution:
Organized retail changing industry dynamics

The Indian retail market size is estimated at US$ 350.2 billion and is projected to grow at
13 per cent per annum to reach US$ 590 billion by 201112.

The current share of organized retail is estimated to be 4 to 5 per cent and is expected to
increase by 14 to18 per cent by 2015.

Organized retail has created new channels for FMCG players through diverse retail
formats such as departmental stores, hypermarkets, supermarkets and specialty stores.

With organized retailing emerging in a major way across the country, the revenues of
FMCG companies are expected to surge.
Rural market the new growth frontier:
Rural India accounts for close to one-third of the total consumption pie.
Robust consumption in the rural economy is one of the key drivers of
Indias sustained growth.

FMCG companies are devising exclusive rural marketing strategies to tap

the rural consumer base.

A large number of FMCG companies derive a significant proportion of their

overall sales from outside the top few 100 towns/cities, which reflects the
growing economic importance of India's rural consumer base.
Economic contribution:

Employment:
1) Direct employment is estimated at approximately 6% of turnover, i.e. US$ 1.5 billion4 (Rs. 7,000 crores)
2) approximately 12-13 million retail stores in India, out of which 9 million are FMCG kirana stores. Thus the sector is
responsible for the livelihood of almost 13 million people.

Fiscal Contribution:
Cascading Multiple Taxes by the FMCG sector(Import duty, service tax, CST, income tax). 30% revenue of the sector goes into
both direct and indirect taxes. estimated size of $25 billion (Rs. 120,000 crores), that would constitute a contribution to the
exchequer of approximately US$ 6.5 billion (Rs. 31,000 crores).

Social Contribution:
create employment for people with lower educational qualifications. FMCG firms have also undertaken some specific
projects to integrate with upcountry and rural areas for both inputs and for distribution as well as to fulfil CSR.
Opportunities:
Untapped rural market, changing life style.
Rising income levels, i.e. increase in purchasing power of consumers.
Large domestic market with more population of median age 25.
High consumer goods spending.
India is the largest milk producer in the world, yet only around 15 per cent of the milk is processed. The
organized liquid milk business is in its infancy and also has large long-term growth potential. Even investment
opportunities exist in value-added products like desserts, puddings etc.
Only about 10-12 per cent of output is processed and consumed in packaged form, thus highlighting the
huge potential.
India is under penetrated in many FMCG categories as shown in below diagram. With rise in per capita
incomes and awareness, the growth potential is huge.
Lower price and smaller packs are also likely to drive potential up trading for major FMCG products
SWOT Analysis

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strengths Low operational cost
Strength Well established distribution network
Strong brand &large market

Weakness High advertisement cost

Low export level
Lower scope of investing in technology

opportunities Large domestic market

Rising income level
Online social network

Threat Tax and regulatory structure

Rural demand is cyclical in nature
Different Monsoon
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 Bibliography
Google
Govt. Websites
FDI Policy of India
www.ibef.org
http://seminarprojects.com/Thread-fmcg-in-
indian-economy#ixzz2aDXescyL

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THANKYOU

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