India: India remains a strong growth market for global consumer companies

Chief executives of more than a dozen major global consumer goods companies said their India business continues to be resilient and was a bright spot in the Asia region in the April-June quarter despite macroeconomic challenges.

Top companies Apple, Coca-Cola, Mondelez, Unilever, PepsiCo, Nike, Whirlpool Corp, AO Smith, Skechers, Domino’s Pizza and The Hershey Co said in recent earnings calls that their India business is growing at high double-digit rates, partly because of this. To volume growth due to lower base of corresponding quarter last year when the country was under Covid restrictions and pentup demand in categories like fashion and summer products.

The CEOs of Apple and Coca-Cola have said that sales in India reached record levels in the last quarter. Apple CEO Tim Cook told analysts on Friday morning that “revenue in India nearly doubled” in the June quarter. Even in its services business, Apple posted all-time records last quarter in multiple countries, including the US, Mexico, Brazil, Korea and India.

James Quincey, CEO of beverage giant The Coca-Cola Company, told analysts earlier this week that the company delivered its best quarter yet and “added a billion incremental transactions in the quarter with affordable single-serve packages.” He said the company has reached the highest sales point in the country. The increase in consumption last quarter was also reflected in Visa’s payment data. In the June quarter, payment volume in India grew 184% over 2019, and e-commerce grew over 300%, CEO Alfred F Kelly, Jr.

Mondelez increased its June quarter sales in India by 30% and AO Smith by 79%. companies like

and Skechers said its India business drove overall growth in the Asia-Pacific region last quarter.

Diageo said net sales in India increased 17% on the back of strong consumer demand in the non-trade channel, recovery in the trade channel and strong premiums. Budweiser Brewing Co APAC, a unit of AB InBev, saw its India business outperform the industry as volumes rose above pre-pandemic levels. Its combined premium and super premium portfolio doubled last year thanks to a low base from the Covid outbreak.

India has been resilient amid slowing global growth, analysts said. The IMF lowered its global GDP growth forecast for 2022 to 3.6%. Although India’s growth forecast has also weakened, with growth forecast at 8% and 7-8% in 2022, India remains an outlier,” Emkay said in the report.

Not all growth in consumer goods comes from actual demand. Consecutive price hikes across categories in India continue to squeeze household spending and impact demand across several FMCG categories. While this leads to higher value for companies, the volume, or number, of products people buy has fallen consistently over the past three quarters.


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