The FMCG & Retail SectorAnalysis

Introduction-[FMCG]

FMCG is Fast Moving Consumer Goods, also known as packaged consumer Goods.

Daily or periodic use items like: soap ,packaged & processed foods, toothpaste,pickles,tea,coffee etc.

Introduction-[Retail] The basic place of exchange.

Interface between seller and individual consumer.

Shopping Malls, super markets, hyper markets, mini stores , showrooms and kirana stores.

History [FMCG] Origin undefined.

Early Prominent Players like ,HLL(Hindustan lever),ITC(Imperial Tobacco company),Colgate, Nestlé etc.

Provided items of daily use.

History (Retail) Presence of Unorganized* retail

from a long time back in history.

Organized* Retail from early 90s

Pantaloons was the 1st.

Classification of FMCG

FMCG

HouseHoldCare

PersonalCare

Food &Beverage

s

House Hold Care like – Dish soaps, pot holders , paper towels ,Cleaning agents etc.

Personal care like – Deodorants, perfumes , make up , hair gel, mouthwash etc.

Food & beverages like – Wheat,Rice,Vegetables,Tea,pizza etc.

Classification of Retail

RETAILON

THE BASISOF

EXISTANCE

ORGANIZED RETAIL

UNORGANIZED

RETAIL

RETAIL ON THE BASIS OF PRODUCT

FOOD & GROCERY

BOOKS &

MUSIC

CLOTH & FOOTWERE

CONSUMER DURABLES

JEWELS

PHARMA &COSMETICS

Organized Retail Are those retail which are licensed

& Registered for sale and service tax and are nation wide.

Wall-mart, Tesco, Big bazaar, Easy day etc are examples of Organized Retail stores.

Unorganized Retail Stores which operate on local

level.

Stores like local kirana stores, paan thelas, local vegetable vendors and road side stall are example of unorganized Retail.

According to Products

Food and grocery

Consumer durable

Jewllery & Gems

Clothing & Retail

Pharmaceutical and Cosmetics

Books & Music

Analysis Of The Sector

Part I

Governing Body The FICCI -> Federation of Indian

Chamber Of Commerce & Industries.

Set up In 1927,the largest and oldest apex business organization in India.

Nationwide membership of 500 regional chambers of commerce & business associate.

Also focuses on social work & National Issues.

What Does FICCI do? Defines Rules and regulation on

which a industry or Retail works.

Monitors trade frame work.

Organizes Trade fairs.

Regulates Regional chambers of commerce.

Provides license for authentication.

The Introduction to

Liberalization,

Privatization & Globalization

L.P.G & its Effects The Liberalization, Privatization &

Globalization Policy. i.e. L.P.G.

Introduced in 1991,during the government of Late.Mr.P.V.Narsimha Rao of The Indian National Congress, Basic idea was of Privatization by late Mr. Rajiv Gandhi in the Mid 1980s.Improved Later.

India opened Its gate for the International Market for Trade.

Before L.P.G.The Pre `91 scenario.

Growth rate of economy in 1980 was 3.5%

Huge public sectors, State owned enterprises made heavy losses because of inferior technology & insufficient research.

Infrastructural investments were poor because of the Public sector Monopoly due to lack of modernization.

No or less scope of foreign Investments.

. Less avaibility of variety products.

No foreign trade treaties.

Less Exports & high imports caused the disturbance of balance of trade.

Industrial sickness.

High import duties

The Post `91 effect. Decreased import duty.

New Export policy was adopted. Like LERMS [Liberalized Exchanged Rate Management System].

The FDI limit was increase from 40 to 50%, auto mobile was given 100 %.

Foreign institutes & corporate were allowed to operate in the capital market of India.

India signed GATT on 15 April 1994,which is for relaxing trade restrictions.[General Agreement on Trade & Tariff],Now replaced by WTO [World Trade Organization].

Arrival of MNCs Increase in industrial growth. Increased Privatization. Development of Export

Oriented Industries. Increase of growth rate at

around 5 %*. [up till 2010]

Major Change From 1990 t0 2000 in FMCG

Segments Major Brands in India,Pre ’91

Major Brands in India,Post ’91

Creams & Lotions

Pond’sHimalaya

Olay,Garnier

Processed Food

M.D.H., EVERESTParle

NISSINHeinz

Detergents Fena,Lakhani,Ghadi.

Ariel ,Tide

Soaps Nirma,lifeboy

Dove,Dettol

The Famous FMCG Brands.

Major Emergence in Retail

Big Bazaar

Wal Mart

Nike

Adidas

Pantaloons

FDI limits FDI. The Foreign Direct

Investments

Limited to certain sectors

Limited up to 51 % in one brand Retail .

100 % in wholesale Trading.

51 % in FMCG.

Current Trends.YEARS MOVING

REVENUE (US. $ billion)

MOVING AVG. REVENUE (US. $ billion)

FLUCTUATION(US. $ billion)

1998 201 ---- ----

2000 204 202.5 1.5

2002 238 221 17

2004 278 258 20

2006 321 299.5 21.5

2008 368 344.5 23.5

2010 421 394.5 26.5

AVG.ANNUAL GROWTH-- 36.66 %.

1998 2000 2002 2004 2006 2008 20100

50

100

150

200

250

300

350

400

450

MOVING AVG. REVENUE

MOVING AVG. REVENUE

Predicted Avg. Revenue

YEARSMOVING AVG.

REVENUE

2010 394.5

2012 434.5

2014 472.5

2016 520

2018 596

2020 619

1 2 3 4 5 60

100200300400500600700

MOVING AVG. REVENUE

MOVING AVG. REVENUE

Data for succeeding ten years

And so..

In present, The FMCG & Retail sector contributes 17.2 % in the GDP.

The expected FMCG & Retail Contribution will be around 24 % towards GDP.

Sectorial AnalysisPart II

Major Changes Expected

Entry of new Players.

More variety.

New technology

New Mergers Acquisitions.

Extension of present Retail chains.

And Also… Employment Creation.

Social welfare.

Cost efficient.

Top Ten Players FMCG

1. Hindustan Unilever.

2. ITC Ltd.

3. Nestle India

4. GCMMF [AMUL]

5. Dabur India

6. Asian Paints

7. Cadbury

8. Britannia

9. P & G

10. Marico

Top Ten Retail Players

1. Shoppers Stop

2. Westside

3. Pantaloons

4. Lifestyle

5. RPG retail

6. Crossword

7. Wills Lifestyle

8. Globus

9. Pirmals

10. Ebony Retail

Recommendations Globalization should not exploit local

kirana stores.

Special courses to enhance manpower for these sectors.

Should be concerned towards ‘Social Marketing’.

Bringing more retail shops for better shopping and convenience.

Stretching their reach to rural sector through mini store etc. for development of rural face of India

Government should be more strict towards malpractices.

Mega retail store should avoid heavy pricing.

Better Customer relationship and after sales service which creates a feeling of security to the consumers.

More environment friendly products.

Street Analysis

Face 2 Face with the Retailers.

The Final Cut

The Dark Past. The Awakening. A Slow & Steady Start. The Promising Present. The Shining Future.

END