The Indian market has showcased remarkable performance in contrast to the rest of the Asia Pacific, including China, for numerous major global consumer goods companies, as per their post-earnings management comments in the past quarter.
Several of these companies, including Mondelez International, PepsiCo, Coca-Cola, Pernod Ricard, Colgate-Palmolive, Unilever, Levis Strauss & Co, Yum! Brands, Honeywell International, and AO Smith, reported robust growth, with some achieving double-digit increases in their India operations during the July-September quarter. Their India performance stood out as one of the strongest across all emerging markets for these multinational corporations. Apple and Coca-Cola, for instance, achieved their highest sales and volume performance in several years, while major players in the alcohol beverage industry, Pernod Ricard and Budweiser Brewing Company, anticipate their India business to significantly contribute to their global figures in the current fiscal year, thanks to the notable trend of premium product demand.
The senior leadership of these corporations affirmed that the demand in India continued to exhibit remarkable strength.
Mondelez’s Chairman and Chief Executive, Dirk Van de Put, noted that consumer demand in India during the previous quarter reached its highest point in four years.
Coca-Cola’s Chairman and CEO, James Quincey, mentioned that the company is witnessing strong consumer demand in Latin America, India, and various regions within Central and Southeast Asia. However, he noted that consumer spending confidence has not fully rebounded in Africa and China.
Global consumer goods giants are experiencing renewed optimism at a juncture when industry observers have consistently reported month-on-month improvements in demand for various products in India, including fast-moving consumer goods, groceries, consumer electronics, and mobile phones. This positive trend coincides with a moderation in inflation.
In October, the initial month of the current quarter, demand has shown further enhancement, driven by increased festive spending and a growing emphasis on premiumization, as reported by industry executives.
Quincey said Coca-Cola delivered double-digit volume and revenue growth in India, which resulted in the highest value share gain over the past three years even as China was a drag in volumetric terms. “We’re winning in the (Indian) marketplace by generating 2.6 billion transactions at affordable price points and driving availability across rural regions,” he said.
For the first time ever, Apple CEO Tim Cook began his earnings call by focusing on India’s performance, highlighting the record-high revenue and iPhone sales in the Indian market during the last quarter. Cook expressed his enthusiasm for the Indian market, attributing its success to the expanding middle-class segment, improved distribution networks, and various positive factors. He also noted that the two retail stores established in India have outperformed their initial expectations.
During the earnings call, Mondelez’s management reported that the company’s India operation experienced double-digit growth in the September quarter, whereas China expanded at a high single-digit rate, in contrast to the 3.4% volume growth in all emerging markets combined. Colgate-Palmolive executives, on the other hand, mentioned a 4% decrease in net sales for the Asia Pacific region in the last quarter, with a 1.5% decline in organic sales growth. However, they highlighted that the India business continued to demonstrate strong organic sales growth.
According to Reserve Bank of India Governor Shaktikanta Das, India’s GDP growth for the September quarter is expected to surpass earlier estimates. Furthermore, India’s goods and services tax revenue saw a notable 13% increase in October, reaching Rs 1.72 lakh crore. This marks the second-highest monthly collection since the introduction of the levy in July 2017.
International corporations engaged in discretionary sectors such as alcohol have confirmed that the premiumization trend remains unabated.
Helene de Tissot, Pernod Ricard’s Chief Financial Officer, remarked that in India, the fundamental performance is exceptionally robust.
“That’s why we believe this is going to support our ambition to deliver strong growth in the rest of the year and strong growth in the full year and in India. The fundamentals are excellent. There’s an ongoing premiumisation trend, geographic structural tailwind…So this is a key market for us with a very strong potential. That’s why our ambition is very strong for the year,” Tissot said.
Budweiser Brewing Company APAC, one of the major beer companies in the Asia Pacific, reported robust double-digit growth in its premium and super-premium portfolios in India during the last quarter. This substantial growth in these segments contributed to a strong double-digit increase in overall revenue for the company’s India business.
