Brief about the industry:

Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer
Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG generally
include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics,
tooth cleaning products, shaving products and detergents, as well as other non-durables such as
glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include
pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and
chocolate bars.

A subset of FMCGs are Fast Moving Consumer Electronics which include innovative electronic products
such as mobile phones, MP3 players, digital cameras, GPS Systems and Laptops. These are replaced
more frequently than other electronic products.The Indian FMCG sector is the fourth largest in the
economy and has a market size of US$13.1 billion.

Major players in market:

Indian FMCG Sector

THE TOP 10 COMPANIES IN FMCG SECTOR

S. Companies
NO.
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

Source: Naukrihub.com

Major activities performed:

Indian industries engaged in sectors such as FMCG, Chemical and IT/ITES have been most
active in taking up corporate social responsibility during first quarter of 2010-11.It involve
activities that focus more towards the under-privileged community that lives around the
vicinity of company plants, facilitating education and health care and supporting projects
that lead to employment generation.
 Top 5 Major theme areas undertaken by India Inc. during Q1 2010-11

Total  companies CSR initiatives 

CSR theme areas 
Share (in %)
Community Welfare  19.83
Education  15.65
Environment  12.72
Health Care  9.05
Rural development  5.16

Source: Assocham Research Bureau

Structural Analysis Of FMCG Industry

Typically, a consumer buys these goods at least once a month. The sector covers a wide gamut of products such as
detergents, toilet soaps, toothpaste, shampoos, creams, powders, food products, confectioneries, beverages, and
cigarettes. Typical characteristics of FMCG products are: -

1. The products often cater to 3 very distinct but usually wanted for aspects - necessity, comfort, luxury.

2. Individual items are of small value (small SKU's)

3. The consumer spends little time on the purchase decision.

4. Limited inventory of these products

5. Brand switching is often induced by heavy advertisement 

  
 
By the turn of the 20th century, the face of the
Indian retailing industry had changed
significantly. The retailing industry, which, until
the early 1990s, was dominated by the
unorganized sector, witnessed a rapid growth in
the organized sector with the entry of corporate
groups such as Tata, RPG, ITC and Bennett
Coleman & Company into the retailing market.

With the liberalization and growth of the Indian

economy since the early 1990s, the Indian
customer witnessed an increasing exposure to new
domestic and foreign products through different
media, such as television and the Internet.

Apart from this, social changes such as increase in the number of nuclear families and the growing number of
working couples resulting in increased spending power also contributed to the increase in the Indian consumers'
personal consumption.

These changes had a positive impact, leading to

the rapid growth in the retailing industry. Food
retailing was a key area that saw some action at
the national level, with players like Foodworld
and Subhiksha, establishing stores all over India.
While supermarket and departmental chains
replaced traditional grocery and general store
formats, introduction of fast foods (McDonalds),
packaged foods (MTR, Namma MTR), vending
machines    and specialty beverage parlors
(Nescafe, Tata Tea, Café Coffee and Barista)
brought about significant changes in the eating
habits of Indian consumers.

However, it was the non-food sector that saw tremendous action, with the introduction of new product segments.
These segments mainly comprised lifestyle/apparel/ fashion/accessories (eg. Shoppers Stop, Westside, Lifestyle,
Pantaloons, Reebok), books/music (Landmark and Crosswords), drugs and pharmacy and beauty (Health & Glow,
CavinKare and Shahnaz Husain).

SWOT Analysis:

Strengths:

 Well established distribution network

 Extending to the rural areas.
 Low cost operations

Weakness:

 Low export levels

  Small scale sector reservations limit ability to invest in technology and achieve economies of scale
 Several me- too products

Opportunities:

 Large domestic market

 Export potential
 Increasing income level will result in faster revenue growth

Threats:

 Import policies
 Tax and regulatory structures
 Slow down in rural demand
 Growth of unorganized markets.