The top executives of several global consumer-facing corporations in their recent quarterly earnings calls indicated short-term pressure on sales of daily essentials and mass-priced products in India, even as demand remained strong for premium and discretionary products.
The management commentary from companies such as Unilever, Coca-Cola, Colgate-Palmolive, Pernod Ricard, Skechers and Whirlpool also underlined this contrasting purchasing trends in India's consumption sector over the past few quarters.
“In India, volume decline in states impacted by higher-than-normal monsoon. In geographic areas that were unaffected, volume grew in mid-single digits,” CocaCola chairman and chief executive James Quincey said during the Atlanta, US-based beverages maker’s quarterly earnings call. But he expects this to be a temporary factor, and the company to return to growth as “heavy monsoons tend to be a good predictor of agricultural yield, which would be better next year”.
In India where about half the population is engaged in agriculture and related activities, farm output is a key factor in driving consumption.
The seasonal disruption that Quincey highlighted comes amid slowing demand for groceries, home care and personal products. Unilever, which counts India as its second biggest market behind the US, posted tepid 3% volume growth and a flat revenue expansion in its India business in the quarter ended September 30.
For Pernod Ricard, sales growth in India slowed to 2% due to weak demand for products in its lowest price points, but the French distiller that sells brands like Absolut Vodka said it expects to fully revert to double-digit growth in the next quarter.
Premium brands in the fast-moving consumer goods sector, meanwhile, have been growing about twice the speed of their non-premium counterparts in India. Similar trends are observed in the tech and durables sector as well, driven by increasing income levels, urbanisation, smartphone penetration and a more aspirational consumer base.
Whirlpool said it continues to invest in India, a part of the world where the home appliances company wants to grow. “India is very strong, we picked up, and we feel very good about market share, in particular premium small domestic appliances,” said Whirlpool Corp chairman and CEO Marc Robert Bitzer.
While shoe maker Skechers said its sales in India grew 24% and that the country is an incredibly important strategic priority for the company, AO Smith Corp saw India sales increase 12%.
Even with FMCG, companies skewed towards premium products performed well. “Some of our larger markets, particularly Brazil, India and Mexico continue to perform very, very strongly. And if you look long-term strategically, this is where the growth is going to come from,” Noel Wallace, president and CEO of Colgate-Palmolive Co, told investors. “There continues to be per cap opportunities, premiumisation opportunities in those markets, which we think we are executing very well.”
A report released on Friday by market research firm NielsenIQ indicated that products with premium features were seeing 50% growth in India, with consumers increasingly seeking out items that promise convenience and improved lifestyle quality. As much as 41% of urban Indian consumers are willing to pay more for tech products that simplify their lives, it said.
The management commentary from companies such as Unilever, Coca-Cola, Colgate-Palmolive, Pernod Ricard, Skechers and Whirlpool also underlined this contrasting purchasing trends in India's consumption sector over the past few quarters.
“In India, volume decline in states impacted by higher-than-normal monsoon. In geographic areas that were unaffected, volume grew in mid-single digits,” CocaCola chairman and chief executive James Quincey said during the Atlanta, US-based beverages maker’s quarterly earnings call. But he expects this to be a temporary factor, and the company to return to growth as “heavy monsoons tend to be a good predictor of agricultural yield, which would be better next year”.
In India where about half the population is engaged in agriculture and related activities, farm output is a key factor in driving consumption.
The seasonal disruption that Quincey highlighted comes amid slowing demand for groceries, home care and personal products. Unilever, which counts India as its second biggest market behind the US, posted tepid 3% volume growth and a flat revenue expansion in its India business in the quarter ended September 30.
For Pernod Ricard, sales growth in India slowed to 2% due to weak demand for products in its lowest price points, but the French distiller that sells brands like Absolut Vodka said it expects to fully revert to double-digit growth in the next quarter.
Premium brands in the fast-moving consumer goods sector, meanwhile, have been growing about twice the speed of their non-premium counterparts in India. Similar trends are observed in the tech and durables sector as well, driven by increasing income levels, urbanisation, smartphone penetration and a more aspirational consumer base.
Whirlpool said it continues to invest in India, a part of the world where the home appliances company wants to grow. “India is very strong, we picked up, and we feel very good about market share, in particular premium small domestic appliances,” said Whirlpool Corp chairman and CEO Marc Robert Bitzer.
While shoe maker Skechers said its sales in India grew 24% and that the country is an incredibly important strategic priority for the company, AO Smith Corp saw India sales increase 12%.
Even with FMCG, companies skewed towards premium products performed well. “Some of our larger markets, particularly Brazil, India and Mexico continue to perform very, very strongly. And if you look long-term strategically, this is where the growth is going to come from,” Noel Wallace, president and CEO of Colgate-Palmolive Co, told investors. “There continues to be per cap opportunities, premiumisation opportunities in those markets, which we think we are executing very well.”
A report released on Friday by market research firm NielsenIQ indicated that products with premium features were seeing 50% growth in India, with consumers increasingly seeking out items that promise convenience and improved lifestyle quality. As much as 41% of urban Indian consumers are willing to pay more for tech products that simplify their lives, it said.
You may also like
Amid Trump's stern stand on immigration policies, new report says Musk worked illegally in US in 1990s
DWP Attendance Allowance payments of up to £434 for these conditions after new data
David Raya backs Arsenal teammate to bounce back in warning to Liverpool
Road Fatalities Rise Despite Drop In Overall Accidents In Indore; Experts Urge Highway Patrol & Road Engineering Fixes
Finding Balance In A World Full Of Chaos
