Fmcg - Key Points

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  #1  
Old 1st April 2006, 02:00 PM
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Default Fmcg - Key Points



KEYPOINTS:


Supply
Abundant supply in metros. Distribution networks to penetrate the rural areas.
Demand
Potential is high. HLL expects the FMCG market to triple in market size by FY10
Barriers to entry
Huge investments in promoting brands, setting up distribution networks and intense competition, but the sector is not capital intensive.
Bargaining power of suppliers
Some of the companies are integrated backwards, which reduces the supplier's clout. Manufacturing is largely outsourced.
Bargaining power of customers
In case of branded products, there is little that the consumer can influence, but intense competition within the FMCG companies results in value for money deals for consumers (e.g. buy one, get one free concept).
Competition:

Competition faced from both domestic, MNCs and also from cheaper imports, increasingly visible in urban markets. Price wars are a common phenomenon.

Growth Trends:
§ The sector seems to be back in good times after a difficult recent past, when price wars amongst major players led to eroding margins and slow profit growth.
§ Pricing pressures have tapered off.
§ Consumer spending moving back towards higher-prices products (up-trading).
§ Rural markets outpacing their urban peers in terms of growth - to be the main growth driver over the long-term.
§ Latest figures (February 2006) show highest growth for the sector in five years - expected to sustain.
§ Organised retail just 4% of the retailing sector, to grow to higher levels, which is expected to help the FMCG sector as well.
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  #2  
Old 1st April 2006, 02:33 PM
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Default Re: Fmcg - Key Points

Nice One Watchout. Hope you are coming with such kind of informations time and again. Just ensure that the information is latest like this FMCG story.

Thanks & Regards,
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  #3  
Old 2nd April 2006, 11:21 AM
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Default Re: Fmcg - Key Points

i agree watchout i also expect fmcg sector to do well for next 2-4 years.there is lot of demand.pricing powers have return to the sector.one of the unsung heroes of fmcg sector has been godrej consumer products.so many things going for it-good results and acquisitions,investor friendly management,land story as well.
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