Industry Overview FMCG (Week 1 and Week 2 i.

e from 10th July to 18th July)

1. A brief History
India's consumer confidence continues to remain highest globally and showed
improvement in the fourth quarter of calendar year 2014 (Q4), riding on positive
economic environment and lower inflation. Nielsen's findings reveal that the
consumer confidence of urban India increased by three points in Q4 from the
preceding quarter. With a score of 129 in Q4, urban India's consumer confidence is up
by 14 points from the corresponding period of the previous year (Q4 of 2013) when it
stood at 115. The current score helps India stay on top of the global consumer
confidence index for the quarter and is followed by Indonesia and Philippines, each of
which have a score of 120.
2. Current Statistics
The growing purchasing power and the rising influence of the social media have
helped the Indian consumers to splurge on good things. A study done by a leading
industry body and Yes Bank has stated that the consumer spending in India is
expected to quadruple to US$ 4.2 trillion by 2017.
As per GSMA's study 'Smartphone forecasts and assumptions, 2007-2020' India ranks
fourth in the top 10 global smartphones markets. The country had 111 million
smartphone connections in the April-June quarter of 2014, behind leader China, US
and Brazil.
3. Factors that affects growth
Indias Internet economy will grow to almost Rs 10 trillion (US$ 161.29 billion) by
2018, accounting for 5 per cent of the countrys gross domestic product (GDP),
according to a report by the Boston Consulting Group (BCG) and Internet and Mobile
Association of India (IAMAI). Indias Internet economy, which was about Rs 3.6
trillion (US$ 58.06 billion) in 2013, contributed 3.2 per cent to the GDP, the largest
among the developing countries and sixth largest globally, the report said. About half
the population, or 580 million Indians, will be online in the next three years, including
people from all age groups, women and the rural population
The Government of India has allowed 100 per cent FDI in the electronics hardwaremanufacturing sector through the automatic route. It has also enabled 51 per cent FDI
in multi-brand retail and 100 per cent in single-brand retail to attract more foreign
investment into the country
4. Govt. Regulations
The Government of India has allowed 100 per cent FDI in the electronics hardwaremanufacturing sector through the automatic route. It has also enabled 51 per cent FDI
in multi-brand retail and 100 per cent in single-brand retail to attract more foreign
investment into the country
5. Leading Players
HUL, ITC, Nestle, P&G, Marico, Britannia, Parle, GSK, RB, etc.
6. Estimated size of the industry INR? Products/Services sold?
There is a lot of scope for growth in the FMCG sector from rural markets with
consumption expected to grow in these areas as penetration of brands increases. Also,

with rising per capita income, which is projected to expand at a CAGR of 7.4 per cent
over the period 2013-19, the FMCG sector is anticipated to witness some major
growth
7. Establish trends in sales over recent years (Financial/ Ratio Analysis)
Trends in FMCG revenues over the years in India

8. Determine current trends within the industry (Pestel Analysis)

9. What types of marketing strategies are prevalent within the industry? ( Porters 5
Forces)
Availability: The slowdown in distribution expansion has held up growth. The
distribution expansion in 2013 has slowed down to 1.1% from a healthy 2.3% in
2010.
Awareness: While the extent of the impact is smaller, yet, the effect of lower
television gross rating points (GRP) has affected sales.
Macro factors: Declining FMCG growth seems to be reflective of the Indian economy
as a whole. The key macroeconomic indicators have weakened; GDP slowed from
7.9% in 2009 to 5.7% as of Nov. 12, 2013. The Index of Industrial Production (IIP)
has also plunged from 5.8% in 2009 to 1.7% in November 2013. This has affected the
economy and the consumers purchasing power.
Sachet (Low volume packs): New product launches through sachets have fuelled
growth over the years. The growth in the number of low-volume packs hit 31.1%
from 2009 to 2010. The rate then dropped to 10.5% from 2012 to 2013. This drop in
sachet innovations has impacted FMCG growth.
10. Global Economic fluctuation and its impact on your Industry
No major effect, because FMCG is a recession proof industry and a gamut of Indian
manufacturing firms operate. Hence insulated.