FMCG firms still stuck to TV

The number of TV ads in the personal care, food and beverage categories increased in India last year, a trend fuelled by major players like Hindustan Unilever and Coca-Cola.

According AdEx India, the research firm, the volume of television commercials promoting personal care brands climbed by 64% in the fast-growing economy over the course of 2009.

Hindustan Unilever, the FMCG giant, was responsible for almost a third of these spots, having boosted its adspend by two-thirds during the last quarter.

Reckitt Benckiser and Colgate Palmolive both generated totals of 9%, followed by Pond's India, a sub-unit of Hindustan Unilever, on 8%.

This compared with figures of just 4% recorded by other multinational operators such as Procter & Gamble, L'Oréal and Johnson & Johnson.

In terms of specific products, "toilet soaps", examples of which include HUL's Lux and Wipro's Santoor, were the most widely-advertised goods in this sector, with a 38% share, ahead of toothpaste, on 15%.

As previously reported, "fairness creams" are attracting heightened interest from both consumers and manufacturers like Nivea and Emami in India at present.

These offerings contributed 13% of all personal care ads in the last 12 months, with Vaseline Healthy White Body and Fair & Lovely among the brands vying for shoppers' attention.

AdEx also reported that the amount of TV advertising for companies in the food and beverage industry expanded by 45% on an annual basis last year.

Within this, products in Coca-Cola's portfolio enjoyed the most on-screen exposure, with Cadbury's confectionary goods in second, and PepsiCo, which owns brands like Desi Beats and Aliva, in third.

"Aerated soft drinks" was the largest single category in the food and beverage segment overall, with a 19% share, with milk drinks on 10%, chocolate on 9%, and biscuits on 8%.

Services, a wide-ranging group which included pay-TV and internet service providers, as well as fast-food chains, registered a 20% increase in its television output in 2009.

Tata Sky was the most prominent player in this diverse area, according to AdEx India, with Dish TV, Bharti Airtel, McDonald's and Yum Restaurants also all making the top ten.

via Warc

Go rural

The potential of the rural market in India is huge. Even after all these years of studying and understanding the rural consumer, distribution channels still remain one of the biggest challenges of working in rural India. When compared to the consumerist urban society, the rural consumer's choices are need driven first, which results in him being a thrifty cost-conscious buyer. There is a conscious effort to spend less but this doesn't mean good quality products don't get picked up. In fact the rural market absorbs huge amounts of products and in certain categories they are faster than their urban counterparts. A study by the National Council of Applied Economic Research (NCAER) threw up some interesting facts. The rural market accounts for:

• 53% of FMCG sales
• 59% oc consumer durables sales
• Almost 100% of agricultural product sales
  

With the current slowdown ringing death bells n several firms, the focus has shifted towards Indian villages and custom made products to suit these consumers are being sold. This is a good sign. Like I said in the beginning, Indian rural consumer holds a lot of potential and is worth a look.

FMCG in India set to grow

THE 86,000 crore FMCG (fast moving consumer goods) sector in India is running full throttle and is expected to have a lot of action in 2010. As the fourth largest sector in the Indian economy, it is distinguished by a good distribution network and a strong competition between organised and unorganised segment. According to Financial Express, the sector will witness a growth of 15 per cent in 2010, compared to last year.

Present and the future

While the global economic ire consumed everyone in its fire, FMCG happened to be one area that stood tall and strong by overcoming its impact. Although the input costs were high, the sector didn’t witness any price rise in fairness/anti ageing creams, soaps and the likes. The Indian consumer continued to enjoy royalty and hence the sales saw a hike. The issue was balanced by downsising packaging. “The sector has coped well with recent challenges and grew by 15 per cent over the last year,” says industry chamber FICCI.

According to AC Nielson as reported by The Mint, the year 2009, also saw modern retail format stores and aggressive marketing which helped home-grown FMCG firms wrest market share from leader Hindustan Unilever Ltd (HUL). HUL’s share in the estimated Rs 8,000 crore personal care market fell to 44.5 per cent from about half last year, as others like ITC, Godrej and Wipro fought for space in markets like Uttar Pradesh, Bihar and Gujarat with a rural push, says AC Nielsen.

The sector saw rarely any merger and acquisition except for Wipro’s Rs 210 crore acquisition of United Kingdom’s Yardley. The optimism in Indian market was shown when PepsiCo, for the first time held its board meeting here. Its investments are up by another 100 million dollar from 500 million dollar that was announced last year.

Overall, the prospects of the FMCG sector remain good. According to FICCI, it has grown consistently during the last three to four years. The sector is expected to grow at 12 to 15 per cent over the next three to four years.