FMCG SECTOR

FMCG Fast Moving Consumer Goods (FMCG) are popularly named as consumer packaged goods.The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion and it creates employment for 3 mn people in downstream activities. Within the FMCG sector, the Indian food processing industry represented 6.3 per cent of GDP and accounted for 13 percent of the country's exports in 2003-04 . It has a strong MNC presence and is characterized by a well-established distribution network, intense competition between the organized and unorganized segments

FMCG Category and products

1.Household Care Fabric wash (laundry soaps and synthetic detergents); household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish and furniture polish). 2.Food and Health beverages; soft drinks; staples/cereals; 3.Beverages bakery products (biscuits, bread, cakes); snack food; chocolates; ice cream; tea; coffee; soft drinks; processed fruits, vegetables; dairy products; bottled water; branded flour; branded rice; branded sugar; juices etc. 4.Personal Care Oral care, hair care, skin care, personal wash soaps); cosmetics and toiletries; deodorants; perfumes; feminine hygiene; paper products.

WHY INDIA?

1.Large domestic market 2.Growing incomes at both the rural and the urban level 3.India - a large consumer goods spender 4.Availability of raw materials

5.Low-cost labour force-(results in lower cost of production)

6.Presence across value chain

Career Aspects

The FMCG sector is growing at a steady 12-13 per cent. Provides significant direct and indirect employment opportunities Major players are extending their hiring plans and ask for good interpersonal skills and team player attitude Key skills depend upon the type of position one wants to pursue, i.e. marketing, human resources, finance, etc.

The investment potential in rural markets

The Indian rural market with its vast size and demand base offers a huge opportunity for investment. Rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income. With population in the rural areas set to rise to 153 million households by 2009-10 and with higher saturation in the urban markets, future growth in the FMCG sector will come. Technological advances such as the internet and e-commerce will aid in better logistics and distribution in these areas. Already Indian corporate such as HUL and ITC have identified the opportunity and have initiated projects such as 'Project Shakti' and 'e-Choupal' to first, expand rural income, and then, to penetrate this market

Identifying the segments in FMCG

1.Household care Fabric wash market-US$ 1 billion Household cleaners-US$ 239 million 2.Personal care Personal wash products-US$ 989 Hair care products at US$ 831 million (leading players-HLL, Nirma, Godrej Soaps and Reckitt & Colman) Skin care and cosmetics market is valued at US$ 274 Branded coconut oil-US$174 million 3.Food and Beverages Food processing industry is around US$ 65.6 billion

SWOT ANALYSIS OF FMCG SECTOR

Strengths: Well-established distribution network extending to rural areas. Strong brands in the FMCG sector. Low cost operations Weaknesses: Low export levels. Small scale sector reservations limit ability to invest in technology and achieve economies of scale.

Opportunities: Large domestic market. Export potential Increasing income levels will result in faster revenue growth. Threats Imports Tax and regulatory structure Slowdown in rural demand

The health beverage industry- US$ 230 billion Bread and biscuits- US$ 1.7billion Chocolates- US$ 73 million and ice creams -US$ 188million. Semi-processed/ready to eat- US$ 1.1 billion. Coffee market is 19,600 tonnes or US$ 87 million. Mineral water market in India is a 65 million crates (US$ 50 million)

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