India shines for global consumer goods giants despite urban demand slowdown and global market turmoil
As global markets grapple with uncertainty and turmoil, India has emerged as a positive outlier for multinational consumer goods firms, even amid a slowdown in urban demand.
Senior executives from leading companies — including Unilever, Procter & Gamble (P&G), Pernod Ricard, Reckitt, PepsiCo, Heineken, and L’Oréal — have highlighted India’s significant contribution to growth among emerging markets during the recent quarter, according to a report by The Economic Times.
While companies acknowledged softness in urban markets due to modest wage growth and inflationary pressures impacting household spending, they expressed optimism about a robust recovery in the current fiscal year.
“India is driving mid-single-digit growth very nicely,” said P&G Chief Financial Officer Andre Schulten during an investor call last week. “The market gets better every time we look at it. We feel very solid about the growth opportunity there,” he added.
Over the past decade, sales of branded daily essentials in India — a nation of 1.4 billion people — have increasingly depended on rural markets, home to over 800 million people whose purchasing behavior closely tracks agricultural output.
After a prolonged period of sluggishness that weighed on overall market performance until last year, rural demand has shown marked improvement over the past three quarters. However, urban India continues to experience subdued demand for a range of products, from groceries to lifestyle goods, for over a year now.
“In India, the urban market continues to be soft, and we had anticipated that it would come back a little bit faster this year,” said Noel Wallace, chief executive of Colgate-Palmolive, during an investor briefing late Friday.
Despite challenges in the mass-market segments, demand for premium products has remained resilient. Companies like PepsiCo, Reckitt, and L’Oréal reported particularly strong performances across emerging markets during the March quarter, with India serving as a key growth driver.
India remains the second-largest market for both Unilever and Pernod Ricard. While urban market softness could mean India does not retain its earlier position among the fastest-growing markets, both firms continue to view India as essential to their growth strategies.
Fernando Fernandez, chief executive of Unilever, praised India’s consistent performance, saying, “This is a market where we will be unblinking in our defence. When we get our growth engine moving, we know how to drive earnings ahead of growth,” during a recent investor call.
Pernod Ricard, the world’s second-largest distiller and owner of premium brands like Absolut vodka and Chivas Regal Scotch whisky, reported continued strong demand and premiumisation trends in India.
Similarly, Heineken Chief Financial Officer Harald Van den Buch, owner of the Kingfisher beer brand, expressed confidence in India’s growth momentum. “In India, beer volume grew by a mid-single digit, continuing its growth momentum with premium volume growing in the 20s,” he said during an analyst call in mid-April.
