Group – 3

Jayanand, Kanchan, Priyanka, Shukla,

Diwakar, Vipul
The Fast-Moving Consumer Goods (FMCG) sector is the key
contributor of the Indian economy.

Fourth largest sector of Indian economy.

FMCG sector is more lucrative.

These products are daily consumed by each and every

strata of the society 
 Consumers becoming
In the overall revenue
Brand conscious and focus
generated by the FMCG
on product customization
sector, 60% is from urban
are reasons for high
and 40% is from rural.
investments in innovation.

In the FMCG industry,

Companies are preferring
Characteristics third-party manufacturing
which will help them to
Competition is high, the
threat from new entrants is

of FMCG focus on Front end

marketing.
medium, the bargaining
power of suppliers is low
and customers are high.

Introduction of GST on
April 1st, 2017 as a unified
tax regime helped FMCG
companies in refining
supply chain structure.
 GST and Rural Infrastructure
Impact of Demonetization projects

Budget (2019
– 2020)

Income tax
exemption limit
Organised sector and Unorganised sector
share
The industry is highly competitive due to presence of multi-national
companies, domestic companies and unorganized sector.

The ripple effect of urbanisation and lifestyle changes can be seen in

smaller towns as well.

As per reports 55% revenue from urban areas and 45% revenue
from semi-urban and rural areas.
 • 100 per cent Foreign Direct Investment (FDI) in
food processing and single-brand retail and 51
per cent in multi-brand retail.
• Consumer Protection Bill
Governmen • Goods and Service Tax(GST)
t Initiatives
Gap between market players and HUL

Investment in brands and people

Acquisition to fill gaps in the portfolio

Agility to focus on the core

No replication by its peers in the domestic market

  ITC
Year End 201903 201803 201703 201603 201503 201403
Net Sales 48352.68 43448.94 42776.61 39192.1 38834.81 35317.08
PAT 12824.2 11485.1 10471.26 9492.44 9765.63 8990.62
The Financial Key Ratios

Highlights Debt to Equity 0.01  0.02  0.03  0.02  0.02  0.04 

Current Ratio 3.17 2.85 3.69 3.73 2.1 1.9
ROCE 34.39 35.39 36.02 39.96 48.72 52.65
RONW 23.8 24.07 24.27 25.95 33.21 36.42
 Total Current 17062.41  14599.55  14437.61  16762.59  17991.21 
14617.47 
Assets          
Total Current 11681.91  11504.32 
9621.61   8856.60   6830.07   6354.27  
Liabilities    
 Mar 201
Year End Mar 2019 Mar 2018 Mar 2017 Mar 2016 Mar 2015
4
Net Sales  39311.00  35550.00  33252.00  32303.00  31972.19  29233.74 
 PAT  6060.00  5227.00  4490.00  4160.00  4375.51  3955.74 
Key
Ratios
   Debt to
1.3 1.4 1.5 1.22 1.3 1.4
Equity 
   Current
1.37  1.31  1.32  1.46  1.08  1.07 
Ratio 

HUL    ROCE 
   RONW 
113.29 
80.29 
102.53 
74.85 
94.42 
67.80 
111.89 
79.13 
165.63 
117.02 
162.44 
125.19 
Price /
Book 47.03  39.79  29.26  28.76  47.40  37.37
Value 
 Total
Current 9196.00   8773.00   6337.00   7763.00   7280.02   7070.20  
Assets
Total
Current 8667.00   8887.00   7714.00   7067.00   9201.66   8916.64
Liabilities
 Year End Mar 2019 Mar 2018 Mar 2017 Mar 2016 Mar 2015 Mar 2014

 Net
4462.43  4187.98  3981.82  3868.19  3981.94  3578.81
Sales 
 PAT  775.57  673.37  577.43  581.17  558.98  539.87 
Key
Ratios
   Debt to
0.06  0.00  0.00  0.00  0.00  0.00 
Colgate-
Equity 
   Current
0.98  1.05  0.93  0.91  0.91  0.90 
Palmolive Ratio 
   ROCE  74.97  70.26  73.88  92.74  113.91  133.63 
   RONW  52.37  48.32  50.48  64.94  81.59  99.11 
Price /
Book 23.72  18.94  21.41  22.08  35.55  31.14 
Value 
 Total
Current 586.80   491.82   395.41   357.68   311.90   262.25 
Assets
Positioning
strategies of
key players
HUL

• A leader in the FMCG market

• Brand Visibility
• Financially strong position parent
company
• Strong Product line
• Distribution strategy 
• Brand equity 
Nestle

• Marketing
strategy : broad brand portfolio 
company ,strong research
& development 
• Distribution strategy :extensive
network of distributors, uses a
multi-channel strategy 
• Brand
equity : does individual brandin
g of their brands 
Patanjali

• Marketing strategy :Baba Ramdev being the

promoter , made up of herbal and natural
components ,cost-effective products, Low or no
advertising and promotion expenses .
• Distribution strategy :more than 4600 retail
outlets ,distributing its products through e-
commerce sites, supermarket chains like future
group’s BigBazaar, Reliance retail outlets
• Brand equity :Baba Ramdev himself being the
face of the promotions (TOMA)
Professional
Trade Bodies
.
FICCI
 (Federation Of Indian Chambers Of
Commerce And Industry)

• (FICCI) is an association of business organisations

in India.
• A non-government, not-for-profit organisation and
draws its membership from the corporate sector,
both private and public, including SMEs and
MNCs.
• Actively involved in the issues related to policy &
strategy, capacity building and global recognition
to the Indian FMCG industry.
FSSAI (Food Safety and
Standards Authority of India )

• An autonomous body established under the 

Ministry of Health & Family Welfare, Government
of India
.
• It is a consolidating statute related to food safety
and regulation in India.
• responsible for protecting and promoting 
public health through the regulation and
 Key Players in
FMCG Industry
Hindustan Unilever Limited
• A British-Dutch manufacturing company founded in 1933 and
is headquartered in Mumbai, India.
• Portfolio has a wide range of product lines and includes foods,
beverages, cleaning agents, personal care products, water
purifiers and consumer goods.
• has the largest market cap with the market cap of Rs
4,69,591.03 crore.
• has its own website, hul.Co.In and has its app "Shikhar".
• Mr. Sanjeev Mehta
(Chairman and Managing director)
 Water Conservation Project (empowering local community
institutions to govern water resources and enhancing farm-
based livelihoods through adoption of judicious water
management practices. )

Swachh Aadat Swachh Bharat (to promote good health and

hygiene practices by stressing the need to adopt three clean
CSR activities  habits (‘Swachh Aadat’) of washing hands five times a day,
using a toilet for defecation and adopting safe drinking water
practices. )

Project Shakti (aims to financially empower and provide

livelihood opportunities to women in rural India)
Colgate –Palmolive

• American multinational consumer products company

incorporated in 1937 and is headquartered in New York,
United States.
• Business model is focused on the production, distribution
and provision of household, health care, and personal care
products.
• "hill's pet nutrition" under which it also manufactures
the veterinary products.
• Colgate has its website, colgatepalmolive.com for digital
promotion.
• It doesn’t have its own online store but has tie up with e-
commerce websites such as amazon etc
• Mr. Ram Raghavan
(Managing Director)
 Project Saksham  Read India Program
(2017-18)(Gender, (Education,
Equality and Employability and
WomenEmpowerment, Livelihoods
Senior Citizens Care)  Enhancement)

CSR Activities
by Colgate
Palmoloive Healthcare
Bright Smiles, Bright
Futures(oral health
Initiatives(Preventive
initiative, flagsjip
Healthcare, Water and
initiative by the
Sanitation)
company)
 ITC Limited
• an Indian multinational conglomerate company .
• Its portfolio includes consumer goods, cigarettes, apparel, education. Hotels & resorts,
paperboards & specialty papers, packaging, agri-business and information technology 
• The company has a market cap of USD 52 bn and revenue of USD 8.32 bn.
• ITC has its own website, www.Itcportal.Com
• doesn’t have its online store but has a store locator website, fmcgstore. Itcportal.Com which
helps customer in finding nearest ITC store for buying its products. It sells its products online
through e-commerce sites.
• Sanjeev Puri
(Managing Director)
CSR Activities of ITC

 
 An investment in the form of a controlling Involves participation in
ownership in a business in one country by management, joint-venture, transfer
an entity based in another country.
of technology and expertise.

A major monetary source Started in 1991 with beginning of

for economic development in India. economic liberalization.

FDI
 FDI

• 2015 - Received highest amount of FDI in the

world. Total investment - $32 billion.
• 2018-19 – Ranked 11th in terms of investment by
foreign entities.
• Total investment - $33.49 billion.
• Services sector investment grew by 36.5% to
$9.15 billion.
• Automatic route and Government route.
 FDI and FMCG

Third largest recipient of FDI in India. 

EFFECTS:

●
Economies of Scale 
●
Enhanced large scale production leading FMCG companies to earn more profit through economies of scale.
●
Large Scale employment
●
Jobs were generated by direct and indirect employment through development of organized retail. 
●
Supply Chain Efficiency 
●
Investments in upgrading technology and practices in the entire value chain
●
Wastage ranging between 24 per cent and 40 per cent has come down to a considerable value.
●
Inflation Control 
●
The scale of operation and technology help organized retailers score more, giving the consumers both cost and service advantages.
 Setting tariffs and
An ongoing other trade barrier
economic conflict s
between the  on China by
world’s two largest US. The goal is to
national economies. make changes to,
as per U.S., "unfair
US-China trade practices".

Trade war It would directly

Chinese companies harm the
manufacturing
are expected to
companies operating
dump their
in India, not only in
products in the the FMCG sector but
Indian market. many other sectors
also.
 Labor Issues
• Regulatory Issue
• Panoply of India’s restrictive labour regulations – about 200
labour laws, with over a fourth being central acts
• India is unable to grasp its natural comparative advantage
in labour-intensive products.
• Labour regulations effectively prevent firms from using labour-
intensive methods of production.
• Producers find it cost-effective to use relatively capital-
intensive production techniques.
• The Industrial Disputes Act (IDA)
• Requires firms with 100 or more workers to seek
government permission to retrench or lay off any worker. 
• The Industrial Employment (Standing Orders) Act, 1946
• Requires employers in firms with 100 or more workers
(50 or more in certain states) to seek permission even for
reassigning a worker from one task to another. 
 Labor Issues
• The Trade Unions Act
• Allows any seven employees to form a union, thereby
using up a large proportion of the firm’s managerial
resources in dealing with several unions within itself.
• Unions have the right to strike and represent workers in
legal disputes with employers.
• The Contract Labour (Regulation And Abolition) Act, 1970 
• Restricts, and even prohibits, the use of contract workers for
certain tasks. 
• Other Issues:
• Rising employee costs - Overtaking sales growth and input costs
for the year. 
• In the June’07 quarter, for example, staff costs grew at a
much higher rate than raw material costs, 14% compared
to 10%.
• Issue for FMCG companies as wages can’t be easily
reduced like input costs
• Hindustan Unilever’s June’07 figures - Staff costs grew 18% y-
o-y even as sales grew by just 12.9%.
• Decline in consumption leading to lack of liquidity in the This Photo by Unknown author is licensed under CC BY-SA-NC.