India remains a strong growth market for global consumer companies

Chief executives of more than a dozen large global consumer goods companies said their India business continues to be resilient and was the bright spot in the Asia region in the April-June quarter despite the 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 grew at a high double-digits pace, partly attributed to volume growth due to lower base of corresponding quarter of last year, when the country was under Covid restrictions, and pentup demand in categories like fashion and summer products.

CEOs of Apple and Coca-Cola said the last quarter sales in India were a record high for them. Apple CEO Tim Cook, on Friday morning, told analysts that there was "a near doubling of revenue in India" in the June quarter. Even in the services business, Apple posted all-time records last quarter in many countries including the US, Mexico, Brazil, Korea and India.



Beverage giant The Coca-Cola Company CEO James Quincey earlier this week told analysts that the company delivered its best-ever quarter and "added one billion incremental transactions in the quarter, led by affordable single-serve packs." He said the company reached its highest-ever outlet availability in the country. The upswing in consumption last quarter is also reflected in payment data of Visa. Payment volume in India in the June quarter was up by 184% over 2019 with ecommerce above 300%, said CEO Alfred F Kelly, Jr.

Mondelez grew June quarter sales in India by 30%, while AO Smith by 79%. Companies like Whirlpool and Skechers said India business drove overall growth in the Asia-Pacific region last quarter.

Diageo said India net sales grew 17%, driven by strong consumer demand in the off-trade channel, recovery of the on-trade channel and strong premiumisation. Budweiser Brewing Co APAC, a unit of AB InBev, saw its India business outperform the industry as volumes recovered to above pre-pandemic levels. Its combined premium and super premium portfolio doubled in volume, helped by low base from last year's Covid outbreak.

Analysts said India has been resilient amid slowing global growth. The IMF has slashed the 2022 global GDP growth forecast to 3.6%. While India's growth outlook has tempered too, at 8% expectation in 2022 and 7-8% growth forecast, India remains an outlier, " said a report by Emkay.

Not all growth for consumer goods was driven by actual demand. In India, consistent price hikes across categories continue to squeeze household expenses and impact demand for several FMCG categories. While this has led to higher value for companies, volumes or number of products people purchase has fallen consistently over the past three quarters.