FMCG sector

-SHRENIK SHAH ( PRN : 13020241048 )

Country Profile

INDIA Status : Developing

Region : South-central Asia

Currency : Indian Rupee (INR)

Population : 1.237 billion (2012)

( 2nd in The World )

Capital : New Delhi

GDP : 1.842 trillion USD (2012)

GDP growth rate : 3.2% annual change (2012)

Gross national income : 4.749 trillion PPP dollars (2012)

Exports of goods and services: 23.8%

Imports of goods and services: -25.6%

(2012 est.)

Coastline: 7,000 km

USA Status : Developed

Region : Northern America

Currency : U.S. Dollar (USD)

Population : 313.9 million (2012)

( 4th in The World )

Capital : Washington, DC

GDP : 16.02 trillion USD (2012)

GDP growth rate : 2.2% annual change (2012)

Gross national income : 15.89 trillion PPP dollars (2012)

Exports of goods and services: 13.9%

Imports of goods and services: -17.5%

(2012 est.)

Coastline: 19,924 km

INDIA Unemployment, youth ages 15-24:

Total: 8.5%

97th in the world

Industry :

Textiles

Chemicals

Food processing

Steel

Transportation equipment

Cement

Mining

Petroleum

Machinery

Software

Pharmaceuticals

USA Unemployment, youth ages 15-24:

Total: 17.3%

76th in the world

Male: 18.7%

Female: 15.7% (2011)

Industry :

Petroleum

Steel

Motor vehicles

Aerospace

Telecommunications

Chemicals

Electronics

Food processing

Consumer goods

Lumber,

mining

FMCG Sector Profile

INDIA 4th largest sector in the Indian economy.

Total market size in excess of US$ 13.1 billion.

It has a strong MNC presence and is characterized by a well-established distribution network, intense competition between the organized and unorganized segments and low operational cost.

Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage.

The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.

Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc. in India is low indicating the untapped market potential.

Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products.Source - CII

USA According to the Grocery Manufacturers Association, the 2011 US CPG market was

worth $2.1 trillion which employs 14 million U.S. workers, and contributes over $1 trillion in added value to the nation's economy.

With retail sales up about 4.9%, according to Moody’s Economy.

the global FMCG market size can be projected to be more than $10 trillion which is about one-seventh of the global economy.

consumer spending in these emerging markets is expected to grow between 7.7% and 15.2% a year between 2013 and 2016 compared with 4.5% in the USA.

Source-LinkedIn-Article Source-global store focus

Diversity Insights

History - INDIA One of the fastest growing sector in early 1980’s till 1990’s.

The dream of every creative man, any investor, advertising agency, or B-school graduate to work in or for FMCG company.

After 1990’s, FMCG started losing their sheen due to introduction of other product types Total lack of imagination on the part of FMCG companies.

By the turn of 20th century, With the liberalization and growth of economy, the Indian customer witnessed an increasing exposure to new domestic and foreign products through different media, such as television and the Internet.

During 2010, Consumers willingness to upgrade to better, value added products helped FMCG.

History - USA One of the fastest growing sector since 18th century till today.

The Colgate-Palmolive ( since 1806 ) was one of the first company to enter into FMCG industry, followed by Reckitt Benckiser – Healthcare products( since 1814 ) and Procter & Gamble Co ( since 1837 ).

The brands that make up this sector are the high profile ones, the ones everybody knows and loves. Think Coca-Cola, Dettol and Dove, PepsiCo, P&G, Uniliver. This is an industry that puts you in living rooms, kitchens and bathrooms across the globe.

Features / Uniqueness

Innovation Innovation is more than just launching new products.

Innovation is a wide concept which aside from creating, launching and marketing new products.

FMCG innovation is less about creating a stir, more about presenting a complex set of benefits in a simple and compelling way.

Convenience, making life easier and value for money are as important in FMCG as in other markets.

In FMCG, it’s about encouraging consumers to experiment with new tastes, new looks or a more effective delivery of benefits

Innovation It also includes improving shopping processes, providing consumers with a range

of tools to purchase products as also ensuring that the entire organization is focused on the singular goal of improving the customer’s overall experience.

To meet this demand, FMCG companies need to focus on R&D and innovation as a means to grow the business.

At the same time, product lifecycles are shrinking, companies across categories (e g., consumer durables and electronics) are launching new products, and the pressure to market new products, quickly, is strong.

Innovation is a survival tactic.

Top 3 Buyers from USAChina CanadaUK

India is one of the world’s largest producers of a number of FMCG products but its exports are a very small proportion of the overall production.

Total exports of food processing industry were $6.9billion in 2008-09 and marine products accounted for 40 per cent of the total exports.

Though the Indian companies are going global, they are focusing more on the overseas markets like Bangladesh

Pakistan

Nepal

Middle East

because of the similar lifestyle and consumption habits between these countries and India. Hindustan Lever Limited (HLL), Godrej Consumer, Marico, Dabur and Vicco Laboratories are amongst the top exporting companies.

Top Buyers from India

Percentage contribution to the country’s GDP of FMCG sector

India : 2.4 per cent of the country’s GDP from Rs 47,000 crore in 2000-01 to Rs 130,000 crore in 2010.

United States : Food, beverage and consumer products companies directly employed more than 1.7 million workers in manufacturing and directly and indirectly contributed more than 6 percent of the U.S. GDP, according to new study commissioned by the Grocery Manufacturers Association (GMA) and conducted by PricewaterhouseCoopers, LLP (PwC). 

Source

Indian FMCG Companies

United States FMCG Companies

Conclusion Rural market is still an untapped market potential that can be one of the most

feasible market for the development of the FMCG in INDIA as 70% of the total population resides there.

Companies like HUL, ITC, etc have different marketing strategies and marketing budget allocation for rural areas. This helps them to target the consumer base that gets easily influenced by such strategies.

Many companies are embracing the need for product innovation as well as understanding consumer and market needs as part of their R&D activities.

Sources http://

www.mbaskool.com/fun-corner/top-brand-lists/7764-top-10-fmcg-companies-in-india-2013.html

http://www.ibef.org/artdisplay.aspx?art_id=33899

https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

https://www.cia.gov/library/publications/the-world-factbook/geos/in.html

http://www.globalintelligence.com

http://www.pwc.com

http://www.nielsen.com

http://www.unilever.com

http://www.emarketer.com

http://www.stealingshare.com/pages/A%20comprehensive%20study%20of%20consumer%20packaged%20goods.htm

Thank You..!!!