Fast Moving Consumer Goods - Fmcg

Executive Summary

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.

Indiaʹs FMCG sector is the fourth largest sector in the economy and

creates employment for more than three million people in downstream

activities. Its principal constituents are Household Care, Personal Care and

Food & Beverages. The total FMCG market is in excess of Rs. 85,000 Crores. It

is currently growing at double digit growth rate and is expected to maintain a

high growth rate. FMCG Industry is characterized by a well established

distribution network, low penetration levels, low operating cost, lower per

capita consumption and intense competition between the organized and

unorganized segments.

The Rs 85,000-crore Indian FMCG industry is expected to register a

healthy growth in the third quarter of 2008-09 despite the economic downturn.

The industry is expected to register a 15% growth in Q3 2008-09 as compared

to the corresponding period last year. Unlike other sectors, the FMCG

industry did not slow down since Q2 2008. the industry is doing pretty well,

bucking the trend. As it is meeting the every-day demands of consumers, it

will continue to grow. In the last two months, input costs have come down

and this will reflect in Q3 and Q4 results.

Market share movements indicate that companies such as Marico Ltd

and Nestle India Ltd, with domination in their key categories, have improved

their market