FMCG Sector INTRO

Fast Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) sector satisfies the elemental and day-to-day household needs other than grocery, ranging from packaged foodstuff,dairy products, cooking oil, bread, butter, cereals, beverages like tea&coffee, pharmaceuticals, confectionery, biscuits, glassware, stationary items, watches, toiletries, detergents, shampoos, skin care products, cosmetics, toothpaste, dish washing liquid, shaving cream, razor, batteries, shoe polish, energy drinks, soft drinks, clothing, furniture and household accessories to electronic goods like cell phones, laptops, computers, digital cameras etc. that are usually categorized as Fast Moving Consumer Electronics or FMCEs. A major portion of the monthly budget of each household is spent on FMCG products. FMCG sector in India has been experiencing a phenomenal pace of growth since last decade owing to increasing consumer incomes and rapidly changing consumer tastes and preferences. Large scale and low cost production, modern retailing strategies, branding and maintenance of intense distribution network have given FMCGs an edge over others in raising hovering revenues. At present Indian FMCG sector is worth Rs. 1300 billion and expected to be around a whopping value of Rs. 4000 to Rs. 6000 billion by 2020. Henceforth FMCG and its closest companion Retail sector, both are likely to create most of the jobs in India in the coming years primarily in functions like marketing, sales, advertising, supply chain, logistics, human resources, product packaging and development, finance, operations, general management, supervising and so on. Gujarat Co- operative Milk Marketing Federation Ltd (GCMMF), Hindustan Unilever Limited (HUL), Dabur India, Nestl India and Indian Tobacco Company (ITC) Limited are the oldest FMCG companies in India. Globalization has broadened the list of FMCG Companies in India. Foreign players like Cadbury, Pepsi Co, Johnson & Johnson, Procter & Gamble (P&G), Godfrey Phillips, Gillette, Britannia and Reckitt Benckiser, have registered a firm presence in India for last so many years now. Among other Emami, Asian Paints (India), Marico Industries Ltd., Colgate-Palmolive (India) Ltd., Henkel Spic, Modi Revlon, GlaxoSmithKline, Nirma Ltd and Godrej Consumer Products Ltd lead the FMCG Companies chart in the country. FMCG Companies are among the top contenders that pursue the brand positioning process to establish their products in market. Product differentiation, portable & attractive package styling, tag lines and punchlines in advertising, competent marketing and innovative product promotion strategies are very important for this industry to perform well. Due to high competition in the FMCG sector pressure on margins is very high that makes advertisement a prerequisite for this sector. Subsequently, FMCG industry has actually been responsible for the growth of advertisement industry in India and consequently for creating a large number of jobs in this sector also. FMCGs have also raided rural markets and have been performing well even there. FMCG Companies mostly produce labor intensive products and not capital intensive. This has also widened the scope of job opportunities in this sector. Despite inflationary pressures sale of FMCG products is not adversely affected due to price hikes because demand for these products can never shrink and there is also a scope for FMCG companies to gain through product diversification and introducing new variants of the existing products. For instance, Dabur has a wide range of varying products Dabur Amla & Vatika hair oil, Dabur Honey, Gulabari,

Glucose D Dabur, Sharbat-e-Azam, Chyawanprash, Haimola, Dabur Red Toothpaste, Honitus and so on that keeps it distinguished from others. Hindustan Unilever is among the best known for its promotional strategies for Kissan, beverages Lipton, Bru, Brooke Bond Taj Mahal and assorted Knorr soups. Emami's 'Project Navodya' to revamp its products and their styling has also improved performance of its products mainly Fair and Handsome, Sona Chandi Chyawanprash and Zandu Balm. Sportstars and Bollywood celebrities have always been roped in as a part of one of the best brand promotional strategies of FMCG companies, like Amitabh Bachhan promoting Cadbury, Shah Rukh Khan endorsing Sunfeast & Pepsi and Mahendra Singh Dhoni as a brand ambassador for Zandu, Boost, Parle and so on. Such strategies are very essential for the FMCG companies to excel in performance and establish themselves in market. Many have succeeded in doing this and many are looking forward yet to achieve a mark in this sector. FMCG sector has been fourth largest industry in India and Indian FMCG companies have already attained an admirable position in the global market but are yet to hit the bull's eye.