FAST MOVING CONSUMER GOODS (FMCG)

1 June 2020 For updated information, please visit MOVING CONSUMER GOODS (FMCG)Table of ContentsAdvantage Overview ..6 Strategies Industry updated information, please visit SUMMARYF inal consumption expenditure (US$ trillion) FMCG market in India (US$ billion) (FY)2020F2025 FFMCG market in India (US$ billion)Source: World Bank, Emami Reports, Dabur Reports, AC Nielsen, CRISIL, Nielsen Report, 2018 Favourable demographics andrise inincome levelwillboost theFMCG market. FMCG marketinIndiais expectedtogrow ata CAGRof percenttoreachUS$ $ inFY18. FMCG sectoris the fourth largest sectorin the Indian economy.

2 The FMCG sectoris expectedtogrow at9- 10 per centin2019 and2020. Final consumption expenditureis settoincrease ata CAGRof cent during is expectedtoreach nearlyUS$ 2020 fromUS$ in2017. Rise inruralconsumptionwilldrivetheFMCG market. It contributesaround 36 per centto the overall FMCG spending. The rural FMCG marketinIndiais expectedtogrowtoUS$ 2025 fromUS$ INDIAFor updated information, please visit INDIA Rising income and growing youth population have been key growth drivers of the sector. Brand consciousness has also aided demand. India s contribution to global consumption is expected to more than double to per cent by 2020.

3 Rural India is witnessing increased demand for quality GOODS and services driven by upgraded distribution channels of FMCG companies. Low penetration levels in rural market offers room for growth. Dabur stepping-up product launches to sell only on E-commerce platforms. Disposable income in rural India has increased because of the direct cash transfer scheme. Exports is another growing segment. E- commerce segment is forecast to contribute 11 per cent to the overall FMCG sales by 2030. RP-Sanjiv Goenka Group to invest capital fund of US$ million in FMCG startups. Supa Star Foods Pvt Ltd, a packaged food and beverage maker, has received its second investment from Roots Ventures, which will help the company grow its distribution network and add more products.

4 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. The minimum capitalisation for foreign FMCG companies to invest in India is US$ 100 : Emami, BCG and CII report, NielsenFMCGMARKET OVERVIEWFor updated information, please visit OF FMCG IN INDIAS ource:Dabur Annual Report, Economic Times, Emami Annual Report, McKinsey Global Institute, CII, Boston Consulting Group Report, TRA's Brand Trust Report 2018 Current FMCG market reached US$ billion in FY18.

5 The rural FMCG market reached US$ billion in FY18. FMCG sales at India's organisedretail stores rose 22 per cent y-o-y in 2018. FMCG market is expected reach US$ billion by 2020. The rural FMCG market is expected to grow to US$ 220 billion by 2025. The online FMCG market is forecast to reach US$ 45 billion in 2020. FMCGis the fourth largest sectorin the Indian economy. India s household and personal careisthe leadingsegment,accounting for50percentoftheoverall market. Healthcare(31percent) and food and beverages(F&B)(19 per cent) comesnextinterms of market share. Growing awareness, easier accessandchanginglifestyleshavebeen the key growth drivers for the sector.

6 Thenumber ofonlineusersin Indiais likelytocross850millionby2025. FMCG industryis expectedto centin Q12020. Retail marketin Indiais estimatedto reachUS$ ,withmodern tradeexpectedtogrow at 20-25 per cent per annum,whichis likelyto boost revenues of FMCG companies. People are gracefully embracing Ayurveda products,whichhasresultedin Patanjali being rankedasthe mosttrustedFMCG brandin updated information, please visit MAIN SEGMENTS OF FMCGF&BHealthcareHousehold and personal care It accounts for 19 per centof the sector. Thissegmentincludeshealthbeverages,stapl es/cereals,bakeryproducts,snacks,chocola tes,icecream,tea/coffee/softdrinks,proce ssedfruitsandvegetables,dairyproducts,an dbrandedflour.

7 Itaccounts for 31 percent of the sector. ThissegmentincludesOTCproductsandethical s. It accounts for 50 per centof the sector. Includesoral care, haircare,skincare,cosmetics/deodorants,p erfumes,femininehygieneandpaperproducts, fabric wash, andhousehold : OTC is over the counter products; ethicals are a range of pharma products, Share per cent as of FY18 Source:Economic TimesFor updated information, please visit : E- Estimate,F Forecast, * -FY18 Revenue of FMCG sector (US$ )inFY17 and are estimatedtoreachUS$ in2020F. The Union Budget 2019-20initiativesto increase CONSUMER spendingamongmiddleclassis expectedtoboostconsumerconfidence andimprove demand generation for branded CONSUMER products.

8 FMCG sectorwillgain support for growthfromInland WaterwaysAuthority of India(IWAI)multi-modal transportation projectoffreightvillage at Varanasi,whichwillbring together retailers, warehouseoperatorsandlogisticsservicepro viders, and (US$ ). Nielsen India estimates the FMCG industry to grow at 9-10 per cent in 2020 as against percent in in FMCG revenues over the years (US$ billion) GROWTH IN INDIAN FMCG SECTORS ource:Dabur, AC Nielsen, EuromonitorInternational, ICICI securities, Nielsen IndiaFor updated information, please visit Rural industry Breakup in FY1955%45%US$ billionUrbanRuralURBAN MARKET ACCOUNTS FOR MAJOR CHUNK OF REVENUESS ource.

9 BCG , KPMG- , Deloitte Report, Winning in India s Retail Sector, CRISIL, State Bank of India, CRISIL report Accounting forarevenue shareofaround 55 per cent, urbansegmentisthe largest contributortothe overall revenue generatedby the FMCG sectorin India. Rural segmentisgrowing atarapid pace and accounted forarevenue share of 45 per centinthe overall revenues recordedbyFMCG account for50per centoftotal rural spending. In thelastfew years, the FMCG market has grown ata faster paceinrural India comparedto urban India. Demand forqualitygoods and servicesis on an upward trajectoryinrural areas on thebackof improved distribution channelsofmanufacturing and FMCG companies.

10 FMCG urban segment witnessed growth rate of8 per cent, whereas,rural segment grew at5 per centin quarter ended September updated information, please visit in Online Users to drive Online FMCG MarketINCREASING ONLINE USERS BOOST ONLINE FMCG SALESS ource: Google and BCG report September 2017 and February 2018 India s increasing internet penetration andrising digitalmaturityalongwithdeveloping infrastructurehashelped boost onlinetransactions. The onlineFMCG marketis forecasttoreachUS$ 45billion in2020fromUS$ 20billion in2017 backedbygrowthin online usersfrom 90million in2017to 200million in2020E. By2020, about 40 per centofFMCG consumptionis estimatedtobedigitallyinfluenced.