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FMCG SECTOR

Top Ten Players in FMCG Sector

S. NO. Companies
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8 Britannia Industries
9. Procter & Gamble Hygiene and Health Care
10. Marico Industries

The Indian FMCG sector is the fourth largest sector in the economy with a 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 labor 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.
Growth is also likely to come from consumer 'upgrading' in the matured product categories. With
200 million people expected to shift to processed and packaged food by 2010, India needs
around US$ 28 billion of investment in the food-processing industry.
Automatic investment approval (including foreign technology agreements within specified
norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies
(OCBs) investment, is allowed for most of the food processing sector.
What are FMCGs?

WE regularly talk about things like butter, potato chips, toothpastes, razors, household care
products, packaged food and beverages, etc. But do we know under which category these things
come? They are called FMCGs. FMCG is an acronym for Fast Moving Consumer Goods,
which refer to things that we buy from local supermarkets on daily basis, the things that have
high turnover and are relatively cheaper.

FMCG Products and Categories

- Personal Care, Oral Care, Hair Care, Skin Care, Personal Wash (soaps);

- Cosmetics and toiletries, deodorants, perfumes, feminine hygiene, paper products;

- Household care fabric wash including laundry soaps and synthetic detergents; household
cleaners, such as dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides
and mosquito repellents, metal polish and furniture polish;

FMCG in 2006

The performance of the industry was inconsistent in terms of sales and growth for over 4 years.
The investors in the sector were not gainers at par with other booming sectors. After two years of
sinking performance of FMCG sector, the year 2005 has witnessed the FMCGs demand growing.
Strong growth was seen across various segments in FY06. With the rise in disposable income
and the economy in good health, the urban consumers continued with their shopping spree.

- Food and health beverages, branded flour, branded sugarcane, bakery products such as bread,
biscuits, etc., milk and dairy products, beverages such as tea, coffee, juices, bottled water
etc, snack food, chocolates, etc.

- Frequently replaced electronic products, such as audio equipments, digital


cameras, Laptops, CTVs;other electronic items such as Refrigerator, washing machines,
etc. coming under the category of White Goods in FMCG;
Sector Outlook

FMCG is the fourth largest sector in the Indian Economy with a total market size of Rs. 60,000
crores. FMCG sector generates 5% of total factory employment in the country and is creating
employment for three million people, especially in small towns and rural India.

Analysis of FMCG Sector

Strengths:

1. Low operational costs

2. Presence of established distribution networks in both urban and rural areas

3. Presence of well-known brands in FMCG sector

Weaknesses:
1. Lower scope of investing in technology and achieving economies of scale, especially in small
sectors

2. Low exports levels

3. "Me-too" products, which illegally mimic the labels of the established brands. These products
narrow the scope of FMCG products in rural and semi-urban market.

Opportunities:

1. Untapped rural market

2. Rising income levels, i.e. increase in purchasing power of consumers

3. Large domestic market- a population of over one billion.

4. Export potential

5. High consumer goods spending

Threats:
1. Removal of import restrictions resulting in replacing of domestic brands

2. Slowdown in rural demand

Career in FMCG Sector


FMCG (Fast Moving Consumer Goods) are nothing but the products, which are inexpensive and
are sold in mass quantity. FMCG is also called as CPG (Consumer Packaged Goods). Although
profit in FMCG sector is comparatively low, but as the products are sold in mass quantities, the
overall collective profits are huge. FMCG shares are the relatively stable and are not affected by
global variation. In most of the Stock exchanges, FMCG companies are the key players. Fast
Moving Consumer Goods include wide range of products like soaps, packaged food and
electronic applications for bikes, auto and cosmetics among others. FMCG sector has strong
MNC presence and global network, good supply system and low operational cost. That is why
people vie to start a career in FMCG sector.

Scope of FMCG sector in India:

FMCG (Fast Moving Consumer Goods) sector is one of the strongholds and the fourth
largestsector in Indian economy.

FMCG sector is long established and over the years, sustaining ups and downs of the Indian
economy. FMCG sector has total market size of around 14 billion US$. This is one outstanding
achievement in itself.

FMCG companies in India

Jobs in FMCG sector are gaining fast popularity again.

Fresh graduates, students are looking forward for jobs in the FMCG sector, which have given a
boost to the Indian economy. The ongoing management boom, retail craze and good salaries are
the key factors. Some of the top companies that offer good career prospects in the FMCG
sector are -Hindustan Unilever, Godrej, Nestle, Parle, PepsiCo, Coca-cola, ITC, Colgate-
Palmolive, Dabur, HLL, Modi Revlon, J&J, Cadbury India, Amway, Amul, Parrys
confectioneries, Dharampal Satyapal, Nirma etc.

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