India has become the new focal point for major packaged goods companies such as PepsiCo, Unilever, and others, seeking to offset the slower recovery in China. With India’s economy growing rapidly compared to other major emerging markets, these companies are adapting their strategies to cater to the country's diverse and expanding consumer base.
"While the last decade had companies focused on selling into China, the next decade is about selling into India," said Brian Jacobsen, chief economist at Annex Wealth Management. "You have to go where the demographic and economic tailwinds are at your back."
The rise of India's economy, bolstered by anticipated higher government spending, an improved monsoon season, and a resurgence in private consumption, is expected to drive consumer spending upward in the coming quarters. This positive outlook is projected to increase the combined market share of the top five multinational companies—Coca-Cola, P&G, PepsiCo, Unilever, and Reckitt—to 20.53% in 2023, up from 19.27% in 2022. This growth is particularly notable in sectors like baby care, consumer health, cosmetics, beverages, and household products, according to research firm GlobalData.
In contrast, the market share of these companies in China is expected to decline to 4.30% in 2023 from 4.37% in 2022. Wall Street's mixed performance on Monday reflected investor uncertainty as they awaited further economic data to gauge the Federal Reserve’s next moves.
K Ramakrishnan, Managing Director of South Asia at Kantar's Worldpanel Division, noted, "China went through a long and extended COVID ... they even went through a brief period of negative growth, and after this, growth has been very sluggish. In comparison to that, the growth rate in India hovering around 4% seems like a healthy growth for total fast-moving consumer goods."
Both urban and rural areas in India have shown growth, with rural areas performing slightly better. Consumer goods companies are investing heavily in India, launching new products and enhancing their offerings. For example, PepsiCo introduced Kurkure Chaat Fills, Coca-Cola upgraded its packaging to extend product shelf life, and Nestlé plans to launch its premium coffee brand Nespresso by year-end.
Data from Kantar reveals that Coca-Cola's household penetration in India increased by 24% for the 12 months ended June, PepsiCo’s by 12.7%, Nestlé’s by 6.7%, and Reckitt’s by about 3.8%. Mondelez International is also expanding its footprint with new product offerings and partnerships, including a collaboration with Lotus Biscoff.
Coca-Cola reported double-digit volume growth in India, and Unilever saw sequential improvement in the country. PepsiCo anticipates India to be a significant growth area within its Africa, Middle East, and South Asia region, reflecting a stark contrast to the muted growth experienced in these regions last year.
Meanwhile, China has experienced weak demand, with Nestlé reporting a decline in total sales in the Greater China region and noting weaker-than-expected economic and consumer sentiment. "China has always been considered kind of the darling of growth for investors, but as we have seen that bloom is off the rose there," said Don Nesbitt, senior portfolio manager at F/m Investments.
(Source:www.siliconindia.com)
"While the last decade had companies focused on selling into China, the next decade is about selling into India," said Brian Jacobsen, chief economist at Annex Wealth Management. "You have to go where the demographic and economic tailwinds are at your back."
The rise of India's economy, bolstered by anticipated higher government spending, an improved monsoon season, and a resurgence in private consumption, is expected to drive consumer spending upward in the coming quarters. This positive outlook is projected to increase the combined market share of the top five multinational companies—Coca-Cola, P&G, PepsiCo, Unilever, and Reckitt—to 20.53% in 2023, up from 19.27% in 2022. This growth is particularly notable in sectors like baby care, consumer health, cosmetics, beverages, and household products, according to research firm GlobalData.
In contrast, the market share of these companies in China is expected to decline to 4.30% in 2023 from 4.37% in 2022. Wall Street's mixed performance on Monday reflected investor uncertainty as they awaited further economic data to gauge the Federal Reserve’s next moves.
K Ramakrishnan, Managing Director of South Asia at Kantar's Worldpanel Division, noted, "China went through a long and extended COVID ... they even went through a brief period of negative growth, and after this, growth has been very sluggish. In comparison to that, the growth rate in India hovering around 4% seems like a healthy growth for total fast-moving consumer goods."
Both urban and rural areas in India have shown growth, with rural areas performing slightly better. Consumer goods companies are investing heavily in India, launching new products and enhancing their offerings. For example, PepsiCo introduced Kurkure Chaat Fills, Coca-Cola upgraded its packaging to extend product shelf life, and Nestlé plans to launch its premium coffee brand Nespresso by year-end.
Data from Kantar reveals that Coca-Cola's household penetration in India increased by 24% for the 12 months ended June, PepsiCo’s by 12.7%, Nestlé’s by 6.7%, and Reckitt’s by about 3.8%. Mondelez International is also expanding its footprint with new product offerings and partnerships, including a collaboration with Lotus Biscoff.
Coca-Cola reported double-digit volume growth in India, and Unilever saw sequential improvement in the country. PepsiCo anticipates India to be a significant growth area within its Africa, Middle East, and South Asia region, reflecting a stark contrast to the muted growth experienced in these regions last year.
Meanwhile, China has experienced weak demand, with Nestlé reporting a decline in total sales in the Greater China region and noting weaker-than-expected economic and consumer sentiment. "China has always been considered kind of the darling of growth for investors, but as we have seen that bloom is off the rose there," said Don Nesbitt, senior portfolio manager at F/m Investments.
(Source:www.siliconindia.com)