The domestic FMCG companies have managed to outsmart the Indian arms of foreign multinational companies in terms of growth and profitability over the last ten years through new product launches, acqui
The domestic FMCG companies have managed to outsmart the Indian arms of foreign multinational companies in terms of growth and profitability over the last ten years through new product launches, acquisitions and successful diversification into international markets.
The revenues of domestic FMCG companies have grown at an average compounded annual growth rate (CAGR) of 21 per cent during FY05-FY15, while their profits have grown at a CAGR of 24 per cent during the period. As against this, the listed foreign MNC’s operating in the FMCG sector was able to register revenue CAGR of only 13 per cent. “In fact, MNCs have been least interested in some of the categories domestic FMCG firms operate in, owing to the smaller size of these segments. However, over the years, these segments have grown into fairly large categories such as coconut hair oil for Marico, digestives and chyawanprash for Dabur and balms and antiseptic creams for Emami. Today, these categories are cash cows for domestic FMCG companies, driving them to venture into more mainstream product categories and gain market share, sometimes in direct competition with MNCs,” said Ajay Thakur, consumer research analyst, Anand Rathi Financial Services.
Additionally, most of the domestic FMCG firms have set up overseas manufacturing facilities and have undertaken a slew of acquisitions.
