CONSUMER & INDUSTRIAL MARKETS - KPMG Report

Witnessing rapid change,offer new opportunities and challenges. attributed toa.dramatic shifts in buying behavior,b. growing urbanization,c. emergence of the service sector,d. changing trends/lifestyle, e. increasing power of the retailer

CONSUMER MARKETS

CONSUMER MARKETS

Consumer market broadly classified into: Consumer products Food and beverages Retail

CONSUMER MARKETS

CONSUMER PRODUCTSSalient features Intense competition, shifting customer loyalties, aggressivemarketing and the presence of global players.

Current SituationCompanies are realigning their activities towards meeting specific customer needs,Radically changing business models Exploring new ways of collaboration-buyers & sellers. Adherence to WTO norms, exerting further pressure on local industries, forcing them to either enter into alliances and be competitive or exit

M & A and marketing tie-ups impact companies and businesses.

CONSUMER MARKETSSUB SEGMENTS IN THE SECTOR CONSUMERPRODUCTS: Air conditioners Apparels Bicycles Consumer electronics Consumer durables Domestic electrical appliances Cosmetics and toiletries Fast Moving Consumer Goods (FMCG) Furniture Gems and jewellery

[NCAER data]

CONSUMER MARKETSFOOD AND BEVERAGES

Exceptional growth opportunities Increased consumer awarenessChanging lifestyles and perceptions.Brand loyalty and positioning significantAdherences to international safety standards and certification –e.g.US FDA acceptable norm.

CONSUMER MARKETS

SUB SEGMENTS IN THE SECTOR:

Bakery and milling products Beer and alcohol Beverages Cocoa products and confectionery Dairy products Distilleries Frozen foods Meat and poultry Packaged foods / snack foods

CONSUMER MARKETS

RETAIL SEGMENT

Increasing influence of western culture & media on IndianHousehold radically altered lifestyles & spending patterns giving rise to new business opportunities.

Increased sophistication resulted in big retail chains Characterized by low margins and high growth. Companies need to be dynamic and respond to the ever-changing trends in consumer lifestyle and behaviour.

Need to focus on providing VFM & generate loyalty for repeat purchase.

CONSUMER MARKETS

SUB SEGMENTS IN THE SECTOR: Convenience stores Department stores Food chain outlets Mail order / catalogue services Specialty stores Supermarkets Franchises

INDUSTRIAL MARKETS

Companies with traditional competitive models are experiencing diminishing returns, & scale benefits can not be taken for granted.

Companies must go beyond obvious in order to find new sources of profitable growth & maintain their competitive edge.

INDUSTRIAL MARKETS

The industrial markets can broadlybe classified into: Chemical & pharmaceutical Energy and natural resources Industrial and automotive

INDUSTRIAL MARKETS

CHEMICAL & PHARMACEUTICAL

The chemical industry is characterized by sluggish growth andrelatively low international and local demand in thetraditional areas of bulk / commodity chemical products.These are typically large volume commodity productsproduced in capital intensive plants, sold to industrial andprocessing customers and distinguished by a very high degreeof price.

The pharmaceutical industry is poised for substantial growthwith large-scale consolidation being the hallmark ofcompanies in this sector. Companies globally are eithermerging to form mega companies with unmatched productportfolios or else entering into strategic and marketing tie ups With others in the same or even different product categories.

INDUSTRIAL MARKETS

Metals including aluminum, copper, iron and steel etc Abrasive Asbestos Alloys Biotechnology Crop protection chemicals Caustic soda Carbon black Cement Cotton and blended yarn

Dyes and pigments

Explosives Industrial gases Paper and pulp Plastic and rubber Pharmaceutical Sugar Sulphuric acid Fertilizers and pesticides Textiles

INDUSTRIAL MARKETS

ENERGY AND NATURAL RESOURCES

A rapidly increasing population, and growing urbanisationhas put immense pressure on energy and natural resources in India as traditional sources of energy such as fossil fuel reserves are rapidly depleting. Alternatives to traditional fossil fuels are vital to help the country avert an impending energy crisis. Natural gas is a growing alternative to coal and all out efforts should be made to harness this valuable resource and set up infrastructure for the supply and distribution of natural gas as a substitute to coal.

Increasing pollution in large urban metros has also resulted in demand for alternatives like CNG and ultra low sulphur diesel with low particulate emission to ensure relatively low emission as per internationally accepted norms.

INDUSTRIAL MARKETS

SUB SEGMENTS IN THE SECTOR:

Crude oil and natural gas Coal and lignite Forestry and timber Oil and gas Precious metals

INDUSTRIAL MARKETS

INDUSTRIAL AND AUTOMOTIVE SECTORThe industrial sector is characterized by relatively low investment demand and overcapacity. It is inextricably linked to the infrastructure projects being set up in the country. As a result the fortunes of companies in this sector are directly linked to the general state of economy, with a less than modest rate of economic growth resulting in a downward spiral in growth and profitability.

INDUSTRIAL MARKETS

Ball bearings Communication equipment Cars Two wheelers / Three wheelers Commercial vehicles Automobile ancillaries Electronic components and equipment Electrical equipment Fasteners Industrial hardware

Heavy engineering Glass and glassware Machinery manufacturers Defense and air- conditioning Machine tools and tool rooms Semi conductors Ship building