Source: Emami Reports, Dabur Reports, AC Nielsen, McKinsey Global Institute (MGI)

titled The Bird of Gold, Booz & Company, Aranca Research

Favourable demographics and rise in

income level to boost FMCG market

Rise in rural consumption to drive the

FMCG market

Total consumption

expenditure set to increase

Overall FMCG market expected to

increase at a CAGR of 14.7 per cent to

USD110.4 billion during 2012 20

The rural FMCG market expected to

increase at a CAGR of 16.3 per cent to

USD100 billion during 2011 25

Total consumption expenditure to reach

nearly USD3600 billion by 2020 from

USD991 billion in 2010

36.8

110.4

2012 2020E

FMCG market size (USD billion)

CAGR: 14.7%

12

100

2011 2025

Rural FMCG market size (USD billion)

CAGR: 16.3%

991

3600

2010 2020

Consumption expenditure (USD billion)

CAGR: 13.8%

Source: Emami Reports, Dabur Reports, AC Nielsen, McKinsey Global Institute (MGI) titled The Bird of Gold, Aranca Research

Note: Germany population is estimated to reach 81.26 million by 2016

double the total population of the US

(361.6 million) by 2030

the total population in Germany by 2016

set to increase

Working population (aged between 15 and

64 years) estimated to increase from 780

million in 2011 to 900 million by 2030

estimated to reach 267 million by 2016

from 160 million in 2011

is estimated to rise to USD631 in 2020

from USD411 in 2010

780

900

2011 2030

Working population (In million)

CAGR: 0.8%

160

267

2011 2016

Middle income population (In million)

CAGR: 10.8%

411 631

2010 2020

Annual per capita disposable income in rural region (USD)

CAGR: 4.3%

The engineering sector is delicensed; 100 per cent FDI is allowed in the sector Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 February 2012, making up 8.6 per cent of total FDI into the country in that period

Growing demand

Source: Emami, Estimates by AC Nielsen, Live Mint, Jan 13, Aranca

Note: FTMTS - First Time Modern Trade Shoppers

Growing demand

Rising incomes and growing youth

population have been key growth

drivers of the sector

Brand consciousness has also

aided demand

First Time Modern Trade

Shoppers spend is estimated to

triple to USD1 billion by 2015

Tier II/III cities are witnessing

faster growth in modern trade

Attractive opportunities

Low penetration levels in rural market offers room for growth

Disposable income in rural India has increased due to the direct cash transfer scheme

Growing demand for premium products

Exports is another growth segment

Policy support

Investment approval of up to 100 per cent foreign equity in single brand retail and 51 per cent in multi-brand retail

Initiatives like Food Security Bill and direct cash transfer subsidies reach about 40 per cent of households in India

Higher investments

Industry has witnessed healthy FDI inflow, as the sector accounted for

FDI inflow over April 2000 to March 2013

Many players are expanding into new geographies and categories

Organised retail share is expected to double to 14-18 per cent of the overall retail market by 2015

2011

Rural

FMCG

market size:

USD

12billion

2025E

Rural

FMCG

market size:

USD

100billion

Advantage

India

Source: HUL

Notes: OTC is over the counter products; ethicals are a range of pharma products

FMCG

Household care Personal care Food & Beverages

Fabric wash, Household cleaners

Oral care, hair care, skin care, cosmetics/deodorants, perfumes, feminine hygiene

and paper products

Health beverages, staples/cereals, bakery

products, snacks, chocolates, ice cream, tea/coffee/soft drinks, processed fruits and

vegetables, dairy products, and branded flour

Health care

OTC products and ethicals

Source: Dabur Annual Report 2011-12, Economic Times Apr 2013, May 2013, Emami Annual

Report 2011-12, Mckinsey Global Institute, Aranca Research

FMCG is the fourth largest sector in the Indian economy

The FMCG sector has grown at an annual average of about 11 per cent over the last decade

Retail market in India is estimated to reach USD450 billion by 2015, with organised retail accounting for a 14 18 per cent

share; this is likely to boost revenues of FMCG companies

Indian FMCG industry (USD

billion)

Gross block of FMCG industry

(USD billion)

Market size of chocolates (USD

million)

Market size of personal care

(USD billion)

(Per cent) >50

Source: Booz & Company, Dabur, AC Nielsen, Aranca Research

Trends in FMCG revenues over the years

(USD billion)

The FMCG sector in India generated revenues worth

USD36.8 billion in 2012, a 5.7 per cent rise compared to the

previous year

The strong growth in 2012 should come as no surprise

given the impressive performance of the sector over the

years

Over 2006-12, the revenues posted a CAGR of

15.2 per cent 15.7

17.8 21.3

24.2

30.2

34.8 36.8

2006 2007 2008 2009 2010 2011 2012

CAGR: 15.2%

Source: Dabur, Aranca Research

Market break-up by revenue (2009) is the leading segment, accounting for 43.0 per cent of the overall market

Personal care (22.0 per cent) and fabric care (12.0 per cent)

are the other leading segments

43%

22%

12%

8%

4%

4% 2%

5% Food products

Personal care

Fabric care

Hair care

Households

OTC products

Baby care

Others

Source: Dabur, AC Nielsen, Aranca Research

Urban- rural revenue break-up (2011) The urban segment is the largest contributor to the sector, accounting for over two-thirds of total revenue

Semi-urban and rural segments are growing at a rapid pace;

they currently account for 33.5 per cent of revenues

FMCG products account for 53.0 per cent of total rural

spending

66.5%

33.5% Urban

Rural

Source: Mckinsey Global Institute April 2010, Aranca Research

The shift of households from the deprived and aspirers

category having income less than USD1,985.9 per annum

to the seekers and strivers category having income between

USD4,413.1 and USD22,065.3 per annum will change the

outlook for the industry over the coming years

The number of middle class households (earning between

USD4,413.1 and USD22,065.3 per annum) will increase

more than fourfold to 148 million by 2030 from 32 million in

2010

It is estimated that the population earning more than

USD22,065.3 per annum would increase from 1 per cent in

2008 to 3 per cent by 2020 and 7 per cent by 2030

The rising number of middle class and the rich has

accelerated the purchase of premium products

All India household by income bracket (2010)

1% 3% 7% 2% 6%

17% 12%

25%

29% 35%

40%

32% 50%

26% 15% Deprived

(22065.3)2008 2020 2030

Income segment Million Household,100%

222 273 322

Source: Mckinsey Global Institute: The Bird of gold AC Nielsen,

Aranca Research

Annual per capita disposable income level

in rural region (USD)

In 2012, rural India accounted for more than 33 per cent of

the total FMCG market

Total rural income, which is currently at around USD572

billion, is projected to reach USD1.8 trillion by FY21

During 2010-20, annual per capita disposable income in the

rural region is estimated to increase at a CAGR of 4.4 per

cent to USD631

As income levels are rising, there is also a clear uptrend in

the share of non-food expenditure in rural India

Share of non-food expenditure in rural India rose from 36.0

per cent in FY08 to 46.4 per cent in FY10

411

516

631

2010 2015 2020

Source: AC Nielsen, Aranca Research, Dabur Reports

Note: * - MAT, MAT - Moving Annual turnover

FMCG industry Rural (USD billion) The Fast Moving Consumer Goods (FMCG) sector in rural and semi-urban India is estimated to cross USD20 billion by

2018 and USD100 billion by 2025

During September 2011 to September 2012, FMCG Moving

Annual Turnover (MAT) increased 16.4 per cent to USD11.7

billion in rural areas

10.0

11.7

Sep '11* Sep '12*

CAGR: 16.4%