Showing posts with label MNC. Show all posts
Showing posts with label MNC. Show all posts

Friday, April 12, 2013

Getting Back, Getting Even

From a Time when they were Playing for Survival Against MNCS, a select few Indian FMCG firms are Quickly Turning The Tables. Still, The Head-to-Head Score goes in Favour of MNCs

Even though some Indian FMCG players like Godrej and Dabur have a legacy of more than 100 years, yet they have traditionally been players with modest ambitions till the 1980s. But like other industries, the big churn came in post-liberalisation era. Over time, and especially post liberalisation, foreign players like Nestle, HUL, P&G and Reckitt Benckiser significantly grew in size and stature in the Indian market, and left the Indian firms behind by miles.

The domestic FMCG majors had to desperately play the survival game. Local companies like Dabur, Marico, Emami, Himalaya, Amul, understood that the market was changing and that they had to change with it. They shed their regional ambitions and started investing into distribution, packaging, product innovation & marketing. Players like Godrej went for a complete brand repositioning, and brought in a more professional management structure that emphasised on youth and looked to go global. But to what extent has their radical transformation helped Indian companies move up the steep learning curve that they largely stayed away from earlier? Are Indian firms taking the score back from the MNCs?

A Booz & Company and Confederation of Indian Industry (CII) report pegs the Indian FMCG industry at around Rs.1.3 trillion. The sector witnessed a CAGR of about 11% from 2001 to 2010. The last five years have shown a CAGR of approximately 17%. If the industry could continue to grow with a CAGR of 12-17%, it will become a Rs.4-6 trillion industry by 2020.

The real inflexion point for Indian players was 2001. According to the report, large Indian players grew sales by 12% from 2001-2005 and by 19% from 2006-2010. MNCs, in turn, saw sales growth of just around 2% in 2001-2005 before recovering to see growth of around 16% from 2006-2010. This has reflected in key market share gains as well. Godrej No. 1 is the leading soap brand in Northern India and third largest overall. Wipro’s Santoor holds sway in South India; ahead of the likes of Lux, Lifebuoy or Dove. ITC (well, if you were to consider it an ‘Indian’ company) is giving sleepless nights to HUL with innovations in personal care and food categories. The USP of Indian FMCGs – natural and herbal-based products – is attracting Indian customers, for whom ‘foreign’ ostensibly doesn’t carry the same attraction as before. In fact, differentiated products like Chyawanprash, Navaratna oil and Parachute have been immensely beneficial, as MNCs have consciously not invested in these products.

Consider the situation in personal care and home categories. According to Euromonitor International, Indian companies have been either holding steady or steadily gaining market share since 2005 in these segments. Even as Hindustan Unilever’s market share dropped marginally from 36.6% in 2005 to 33.3% in 2010 in the personal care segment, Dabur marginally upped its market share from 4.7% to 4.9%; while Godrej raising its share to 4.5% from 3.9%. ITC has doubled its market share to 1.4% in 2010 from 0.7% in 2008. But other international players have been gaining ground as well. Colgate-Palmolive’s market share rose from 6.4% in 2005 to 6.8% in 2010. P&G India’s share has also risen from 4.2% to around 5.4%. In these rapidly growing segments, MNCs have a clear edge over Indian players.
 

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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Thursday, January 10, 2013

“In india, for india...”

B&E: How did you started off in India?

VR: GE Healthcare came to India in the year 1990 through a joint venture with Wipro Corporation. We obviously started at the bottom of the table as most of the big players had established business in India. GE Healthcare was represented through a GE business unit called IGE, which had some presence in the X-ray imaging business. Thus, our immediate vision was to establish ourselves as a top-of-the-line medical equipment supplier and a preferred partner for Indian healthcare practitioners.

B&E: So, how has been your journey till date?

VR: The biggest challenge we faced was do get business from the government. As we were a new entrant in the market therefore we could not grab a good mind share and were able manage only a meager percentage of its business. It took us time to educate them on our technology and service capabilities. However, today, with our investments in technologies, resources, education, et al, we are getting a good chunk of government business as well. Other learning was to bring in more local products and solutions for the local market. We believe we could have accelerated with “In India, for India” solution a lot earlier.

B&E: What is your advice to a MNC that plans to enter the Indian market in the near future?

VR: India is a huge market, but it’s a unique market. On one hand, it has an urban market, which is at par with the developed world, on the other it has a huge under-developed market that is crying for basic necessities. I would say that the key to growth in India to get a deep understanding of the Indian consumer. One should be patient enough to play a long innings and should bring out products/solutions that are aligned to Indian consumer needs.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.
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Sunday, November 4, 2012

ASSET: MIND & MANPOWER

The real assets are perhaps those we overlook...

No wonder that Japan and the US are some of the richest nations of the world as they have allowed entrepreneurs to unleash the power of their minds and catapult the society to a higher paradigm.

Today, an operating system, a mobile phone or a micro processor can be called wealth but the real wealth are those whose gave shape to them. In the same league population was considered to be a major liability. But of late, two of the most populous countries of the world, China and India have realised that if they have ever done anything worthwhile, that was to nurture such huge population. In an era of market economy, the shrinking population and saturated market of the West, leaves the MNCs with only one choice, i.e. to invest and market in India and China. Not just as markets, India’s and China’s population can be considered wealthfor the incredible source of manpower they have become for the world. While the Chinese have specialised in being the manufacturer of the world, the Indians have specialised in the after sales service of the same.

But that this population doesn’t want to get restricted in it, is vindicated by the Tatas and Lenovos calling shots in global acquisitions.It doesn’t end here only. The biggest wealth of this world is still a calm mind and hope nurtured by the principle of self actualisation of East.Even wealthy West has accepted it. Against all odds, mankind still dream to live another day and wither the next Tsunami. So long this wealth of hope remains, other assets will work too.


Source : IIPM Editorial, 2012. An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
 
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Thursday, October 25, 2012

A lesson taught ...and learnt?

from the ceo to the office boy, from the business tycoon to the paan waala, from urban to rural; mobile handsets have travelled a great distance in india, and so has nokia. but thanks to the latest twists in the tale, nokia may need to adapt quite a bit very soon

The ‘Black & White’ era went into decline mode in India way back in 1982, when the first colour TV sets were introduced on the occasion of the Asiad Games (movies were already in colour, though; interestingly, India’s first indigenously produced colour film was Kishan Kanya; way back in 1937). But the ‘grey’ era continues to be strong till date. Not on your screens, my friend, but in markets. Ask the MNCs and they will recount, in horror, countless stories on how the grey market has, time and again, wreaked havoc with their plans.

And that was just the beginning of Nokia’s quagmires when it entered the Indian market in 1995. It was a market where mobile phones and services were a luxury item. With the prices that these models commanded, you could get a decent second hand Fiat car in those days!

There were a few key planks on which Nokia played its cards, and played them well. Firstly, they developed phones specifically for the Indian market, with durability to withstand Indian conditions and features like torch, vernacular SMS, news feeds, et al. Also, with other players like LG, Sony and Samsung being perceived as diversified consumer electronic companies, Nokia scored heavily on the fact that it had a core focus on mobile phones & developed strong brand equity.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

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