CAN THE INTERNATIONAL BRAND'S ENTRY IN INDIA BECOME PROBLEM FOR LOCAL FMCG BRANDS?

From last few years, we are founding that there are a lot of International MNC FMCG companies entering in India with their products in different segments. These companies includes the top companies also (ex. Lore'l, Kraft, Tura, Cape Gemini etc.). In one hand these companies are totally diversifying the Indian market with different products , at other side, these are creating a tough competition for our national as well as prior ones. There was a time when HUL become market leader in all the segment's with having more then 50% share in every segment, but now it is trebling in it's core business also. This is not only happening with HUL, but it is the same story with other brands.

In the year 2001-02, there was a US based company, named Amwey, entered in India with it's chain of cosmetic products and become a good success story in India. This company has not been much successes in rural market due to it's high price. But it was just an entry, within couple of years, there was a lot of MNC companies entered in Indian market even they are also providing the products in affordable prices. We have an example of Lore'l, It enters with It's global leader brand Garnier, at the time it was introduced in very limited segments (ex.Hair color) and preferred by only middle and higher class people. But at the present time, there are a line of products of Lore'l are available in the market. These products are also about the same price range as it's competitive products are available. Like that, a lot of companies are giving more competition for the national brands.

Now a days nobody like to use the products of our domestic companies. It is a problematic issue on which the govt. has to look upon and take vital steps. Otherwise our domestic companies will go down as well as no any new entrepreneur will be bother to start new venture in the FMCG sector. The govt. should limited the entry of MNC's in India.

ITC Q4 net profit surges 27% to Rs 1,028 crore

Diversified business firm ITC today reported a 27 per cent growth in its net profit to Rs 1,028.2 crore in the quarter ended March 31, 2010.

The company had a net profit of Rs 808.99 crore in the quarter ended March 31, 2009, ITC said in filing to the Bombay Stock Exchange (BSE).


The hotel-to-tobacco major has declared a special dividend of Rs 5.50 per share of Re 1 each and a dividend of Rs 4.50 per ordinary share for the financial year ended March, 2010.
The Kolkata-based company also said that its board will meet on June 18, 2010, to consider the issue of bonus shares.

During the quarter, the company's net income grew by 29 per cent to Rs 5,131.61 crore from 3,985.92 crore recorded in the same period in the 2009-10 fiscal.

In the 12-month period ended March 31, 2010, the company had a net profit of Rs 4,061 crore, as against Rs 3,263.59 crore posted in the year-ago period.

ITC's net income during the period jumped to Rs 18,382.24 crore from Rs 15,806.54 crore recorded in the same period of the previous fiscal.

Shares of ITC were up by 2.23 per cent and were quoting at Rs 268.40 in the late afternoon trade on the BSE.

HUL’s biggest national roll-out may add Rs320 cr sales in first yr

Mumbai: Consumer goods firm Hindustan Unilever Ltd (HUL) could add around Rs320 crore to its revenue, following the roll-out of its most ambitious trade initiative called Perfect Stores, said an executive at Technopak Advisors Pvt. Ltd, a retail consultancy firm.
For HUL, India’s largest packaged consumer goods company by revenue, it is one of the largest and fastest roll-outs of a marketing strategy to get back its lost market share.

In the first three quarters of fiscal 2010, HUL’s revenue was Rs13,208 crore.
The maker of Lux, Wheel, Dove and Kissan tomato ketchup, HUL is rolling out the Perfect Stores concept across 80,000 stores in 72 cities with a population of at least 100,000 in the next six weeks. The objective is to raise sales in these stores by 30%. All these stores will have similar in-store display and merchandising.
Go-to-market: The firm will extend the new concept to the top 80,000 stores of the one million retail outlets that it reaches out to directly. Indranil Bhoumik/Mint
Since the average size of a neighbourhood grocery store is around 200 sq. ft and sales per sq. ft are Rs6,000 a year, typically one such store has a turnover of Rs12 lakh a year, according to Raghav Gupta, president of Technopak Advisors.
If HUL products account for 25% of such sales, then the sales of these products at one such store will be to tune of Rs3 lakh a year, he said.
Going by Gupta’s calculation, if this initiative leads to a 15% increase in sales, then HUL products will record a rise of Rs45,000 a year in each of these 80,000 stores. The overall increase in sales of HUL products at these stores will be Rs360 crore and, after removing the retailers’ margin, the growth will be Rs317 crore.
Gupta, however, has taken a conservative estimate of 15% rise in sales while the company itself expects a 30% rise.

Perfect Stores is the last mile of HUL’s go-to-market strategy that was started about three years ago. The company aims to rationalize its distribution network, make it more efficient, deliver stocks to retailers faster and reduce inventory on their product shelves.

Traditionally, HUL took time to react to competitive pressures as it had a pipeline of stocks to exhaust. It typically took 10-12 weeks for price cuts to reach its customers. With a quick turnaround of stocks, the company is aiming at a zero or, at the most, one-day stocking level.
Ahead of the roll-out, it ran a pilot in January-March in Coimbatore, Tanali (Andhra Pradesh), Chandigarh, Bhubaneswar and Thane.
Now, the Perfect Store concept has been extended to the top 80,000 stores of the one million retail outlets that HUL reaches out to directly.
The company’s joint venture Hindustan Unilever Field Services Pvt. Ltd, which was formed for modern trade channels with Smollan Holdings, an in-store execution and field services firm in South Africa, in November 2007, has now been extended to cover general trade.

The national roll-out began early this month, and in the first week, HUL created around 20,000 Perfect Stores.

“The creation of Perfect Stores has been made possible due to a three-year history of the stores sales,” said Suhas Jain, a supervisor at Mumbai with HUL.
“There has been an increase of 30% in sales in Perfect Stores,” said Hemant Bakshi, executive director (sales and customer development) at HUL.

The focus on general retail trade is among one of the many initiatives that the Anglo-Dutch Unilever’s Indian unit is looking to double its revenues.
Over the year, it has been engaged with rival Procter and Gamble Co. in price wars and legal battles over washing powder supremacy.

General trade accounts for 97% of the overall consumer packaged goods industry in India and grew at a rate of 13% in 2009 in value terms over a year ago, according to Nielsen Co., a market research firm.