FMCG in India
MARKET SEGMENT
FMCG
Household
Care
Personal
Care
Fabric wash, Household
cleaners
Food &
Beverages
Oral care, hair care,
skin care, cosmetics /
deodorants, perfumes,
feminine hygiene and
paper products
Health beverages,
staples/cereals,
bakery products, snacks,
chocolates, ice cream,
tea/coffee/soft drinks,
processed fruits & veg’bles,
dairy products,
branded flour
Health
Care
OTC products & ethicals
2
MARKET SIZE
135
(Values in USD Bn)
44.9
2013
2020E
Segment wise
Market Size
Geography wise
Market Size
43%
22%
12%
8%
4%
4%
2%
5%
66%
34%
Food Products
Personal Care
Fabric Care
Hair Care
Households
OTC Products
Baby Care
Others
Urban
Rural
$ 19.3 Bn
$ 9.9 Bn
$ 5.4 Bn
$ 3.6 Bn
$ 1.8 Bn
$ 1.8 Bn
$ 0.9 Bn
$ 2.2 Bn
$ 29.6 Bn
$ 15.3 Bn
YoY Sales Projection (USD Bn):
103.7
CAGR 15.3%
15.7
17.8
21.3
24.2
30.2
2006
2007
2008
2009
2010
34.8
36.8
2011
2012
47.3
2015F
2020F
3
MARKET PENETRATION LEVEL
Area wise: Top FMCG Products Penetration Level
Category wise FMCG Products Penetration Level
Toilet Soap
95.7%
Washing Powder
92.3%
Detergent Bar
Toothpastes
Hair Oils
72%
88.6%
Hair Oil
74.5%
Tooth Paste
72.8%
Shampoo
Shampoo
56%
Toilet Cleaners
51.0%
Fairness Cream
18.6%
Anticeptic Cream
1.6%
Cold Cream
1.1%
Glucose
10%
Branded Baby Oil
22%
4%
2%
Urban
Among those where the penetration is higher, per capita
consumption is comparatively low, hence offering scope for high
growth in future
Penetration of major products such as fairness cream, antiseptic
cream & cold cream, is just 18.6%, 1.6% & 1.1%, respectively
69%
21%
13%
Toothpowder
84%
45%
12%
60.4%
Talcum Powder
91%
63%
Rural
Hair oils, toothpastes and shampoos have significantly high
penetration in both urban and rural markets
Glucose and toilet cleaners are picking up in the rural areas
due to increased awareness
4
MARKET DISTRIBUTION NETWORK
Distribution Remains a Priority:
Sales Channel Breakdown
Grocers
59%
General Stores
13%
Chemists
8%
“
NOT JUST DISTRIBUTION EXPANSION BUT
THE RIGHT DISTRIBUTION EXPANSION CAN
MAKE ALL THE DIFFERENCE TO GROWTH.
Paan Plus
6%
Majority of sales still move through traditional trade, availability of
products in stores will continue to drive sales to a large extent.
Modern Trade
6%
A blanket approach to store expansion might not help; going to
stores which matter more for the respective category and brand, will
make all the difference in maximizing returns and growth.
Food Stores
Others
3%
5%
A small proportion of stores account for a large proportion of sales;
hence going to these stores and ensuring presence and avoiding
churn will play a pivotal role.
 In 2013, 8.4 million outlets served 1.26 billion people and
accounted for US$37 billion in sales
Grocers are the dominant retail format, accounting for 59%
5
MARKET LEADERS
(Values in USD Mn)
FY12
1012
1177
1102
1132
828
GCPL
FY13
Dabar
844
830
825
Marico
HUL(F&B)
Skin Care
Hair Oil
Shampoo
Oral Care
42%
46%
50%
774
847
ITC (Foods)
Fruit Juice
Market
Leader
Other
58%
Dabar – 15%
P&G – 24%
HUL – 22%
L’oreal – 13%
Bajaj – 8%
CavinKare – 10%
Dabar – 13%
P&G – 10%
Emami – 5%
Dabar – 6%
50%
Pepsico – 45%
Emami – 9%
6
MARKET STRATEGY
•FMCG companies are trying to influence consumers with intelligent deals
•Firms like ITC offers combo deals to the consumers.
For example, in the case of soaps and cosmetics; four soap cases are
offered at the price of three, selling the range of deodorants for men and
women at a discounted price
Promotions
&
Offers
Research Online
&
Purchase Offline
•The internet enables consumers to make their own research
on the kind of products or commodities they want to purchase.
One in three FMCG shoppers goes online first and then to the stores
•Almost half of the automobile consumers follow the Research Online
Purchase Offline (ROPO) method
Production
Innovation
•Indian consumers have become choosy and are less likely to stay loyal to a brand
•Emami is coming up with a new glucose energy drink under Zandu known as Zandu Gluco Charge
•Dabur has launched India’s first drinking yogurt and Real Supafruits under its brand Activ.
7
MARKET FACTORS - DRIVING SALES
8 Factors
55%
33%
CONTROLLABLE
AVAILABILITY
SACHET
45%
20%
18%
OFFERINGS
13%
03%
AWARENESS
07%
01%
VALUE
PACKS
05%
NOT DIRECTLY
CONTROLLABLE
EMPLOYMENT
RATE
INDEX OF INDUSTRIAL
PRODUCTION (IIP)
GDP
CRUDE OIL
PRICES
INNOVATIONS THROUGH SACHETS AND THE RIGHT ASSORTMENT:
•Reports say, Marketers now need to boldly innovate and come out with appealing packs which are affordable and can get consumers into the fold.
•Given the economic environment, affordable low volume packs will play an important role in driving consumer adoption and sales.
•Sachets/ low volume packs are a part of assortment theme and stand out as a key driver given the nature of the Indian market and purchase dynamics.
8
MARKET TRENDS - FMCG
Consolidation
Product
Innovation
Brand
Consciousness
Focus on
Rural Market
Expanding
Distribution
Network
•This approach has helped FMCG companies focus on
front-end marketing
Indian FMCG companies are consolidating their existing
business portfolios
Third Party
Manufacturing
Several companies have started innovating or customizing
their existing product portfolios for new consumer segments
Focus on
Smaller Size Packs
Consumers are becoming more brand conscious and prefer
lifestyle and premium range products given their increasing
disposable income
Enhancing
Presence in Africa
Companies are now focusing on the rural market segment
which is growing at a rapid pace and contributes about 34
per cent to the total FMCG market
Reducing carbon
footprint and ecofriendly products
FMCG players in India are increasingly focusing on reducing
their carbon footprint by creating eco-friendly products.
They generate the required energy from renewable sources
and earn CER credits for the same
Private Label
Penetration
With the rise of retail players, private label has become
popular in the FMCG space. Private Label goods are
considered substitutes of premium branded goods
Companies are now focused on improving their distribution
networks to expand their reach in rural India
•Reservation of several items for SSI as well as additional tax
incentives have made third party manufacturing a popular
route for many big players
Companies are increasingly introducing smaller stock
keeping units at reduced prices. This helps them to sustain
margins, maintain volumes from price-conscious customers
and expand their consumer base
•FMCG companies entering Africa as it helps to be close to
consumption markets within Africa
•Such foreign investments are encouraged by local
governments, as they offer incentives to enter the markets
9
Thank You
Reference : India Brand Equity Foundation Report – FMCG Aug’14 , Featured Insights Delivering Consumer Clarity by Nielsen