Fast-moving consumer goods companies have also been highlighting this trend in their quarterly earnings.
The Indian market has outperformed the rest of Asia Pacific including China for some of the biggest global consumer goods companies in the past quarter, according to their post-earnings management commentaries.
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 strong growth going up to double digits in their India businesses in the July-September quarter. The India performance was also among the best across all emerging markets for these multinationals. Apple and Coca-Cola posted their highest sales and volume performance in several years, while alcohol beverage majors Pernod Ricard and Budweiser Brewing Company said they expect the India business to drive their global numbers this fiscal year due to strong trends of product premiumisation.
The top executives of these companies said demand in India remained very strong.
Snacking giant Mondelez’s chairman and chief executive Dirk Van de Put said consumer demand in India in the past quarter was at a four-year high.
Coca-Cola chairman and CEO James Quincey said the company is seeing “consumer strength across Latin America, India and in parts of Central and Southeast Asia. On the other hand, consumer confidence in spending has yet to fully recover in Africa and China”.
The renewed optimism of global consumer goods giants comes at a time when industry trackers across products, such as fast-moving consumer goods, groceries, consumer electronics and mobile phones, have been reporting improving demand month-on-month in India with inflation moderating.
Demand has further improved in October, the first month of the current quarter, led by festive spending and premiumisation becoming stronger, industry executives said.
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 on Friday started his earnings call talking about the performance in India — it posted record high revenue and iPhone sales in the Indian market last quarter. “We see an extraordinary market, a lot of people moving into the middle class, distribution is getting better, lots of positives. We put two retail stores there...They’re doing better than we anticipated,” he said.
Mondelez management said in the earnings call that the company’s India operation grew in double digits in the September quarter, while China expanded at a high single digit, as compared to 3.4% volume growth in all emerging markets taken together. Colgate-Palmolive executives said its Asia Pacific net sales decreased by 4% last quarter, with a 1.5% decline in organic sales growth. In contrast, the India business continued to deliver solid organic sales growth.
Reserve Bank of India governor Shaktikanta Das has recently said that India's September quarter GDP growth would be higher than estimates. India’s goods and services tax revenue rose 13% in October to Rs 1.72 lakh crore, the second highest monthly collection since the levy was introduced in July 2017.
Global companies operating in discretionary segments like alcohol said the trend of premiumisation is continuing unabated.
Helene de Tissot, chief financial officer of Pernod Ricard, said in India, the underlying performance is very strong. “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.
One of the largest beer companies in the Asia Pacific, Budweiser Brewing Company APAC, said the business in India last quarter reported strong double-digit growth in premium and super premium portfolios supporting strong double-digit growth in overall revenue.
By Writankar Mukherjee & Sagar Malviya
Read More at https://economictimes.indiatimes.com/epaper/delhicapital/2023/nov/06/et-front/india-top-scorer-in-apac-for-consumer-goods-biggies/articleshow/104993699.cms
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