December 10, 2023

Business Visa

The Business Visa Is Mightier Than Sword

india business: India is shining now for global consumer firms

Nearly a dozen global consumer-facing companies said their India business posted strong growth in the January to March quarter, surpassing even pre-Covid levels with a high double-digit pace for some, despite the Omicron wave.

For several of these companies including Unilever, Visa, Whirlpool and Pernod, India is among the top-performing regions, their global top management executives said in recent earnings calls.

American appliance maker Whirlpool Corp in its earning presentation said the company’s focus is on the Americas and India. Chairman Marc Bitzer said it will drive high growth and profitable business in India as penetration rates accelerate the expansion. “In the not-too-distant future, India will be among the three largest global markets and we are well-positioned to win there,” he said.

Categories including liquor and lifestyle retail also outpaced their pre-Covid growth during the quarter. “India, a must-win market, was up 19% last year and up 12% versus pre-Covid, with broad-based growth both in terms of our Indian whiskey portfolio, but also in terms of our imported brands, our strategic international brands that are in a very, very strong growth there,” Pernod Ricard chairman Alexandre Ricard told analysts.


The country also saw big discounts on some discretionary products such as apparel and shoes across platforms, as companies liquidated inventory amid rising Covid-19 cases and local restrictions.

Payment technology company Visa chief financial officer Vasant M Prabhu said India recovered strongly, up almost 20 points from December. “India has been our fastest-growing market in Asia, up almost 80% since 2019, fuelled by a tripling of ecommerce volumes,” he said, while adding that travel into parts of Asia like India, Thailand and Indonesia was picking up fast.

“India is doing very well. We are up almost 30%. And there’s lots of infrastructure investment,” said George Oliver, chairman of Johnson Controls International that makes Hitachi ACs.


Several company CEOs also indicated they are expanding their investment in India. Coca-Cola Co chairman James Quincey said in India, the beverage company “drove excellence in integrated execution as consumer mobility improved across channels, by stepping up product availability, adding approximately 240,000 outlets and over 50,000 coolers.”

Shoemaker Skechers chief operating officer David Weinberg said it has finalised the location for its new distribution centre in India which will open next year.

For several foods and beverages companies, the Omicron wave impacted out-of-home consumption in the first two months of the last quarter, but demand rebounded thereafter.

For instance, Danish brewer Carlsberg said its Indian business had a slow start to the year, with January and February being impacted by the outbreak of Omicron. But volumes in March rebounded, delivering record-high monthly volumes.

Rival Heineken said its beer volume in India grew by a high single digit and the company experienced progressive growth during the quarter with the declining impact of the Omicron variant of Covid-19.

“With further easing in Covid restrictions, we saw strong contributions from India and Latin America, where system sales were up 44% and 18%, respectively,” said David Gibbs, chief executive officer, Yum Brands, which operates KFC and Pizza Hut.


A report by Axis Capital said the current economic environment will further exacerbate the already stark difference in the outlook for high-end consumption, which is reasonably strong, and weakening low-end consumption. “We see further challenges to the growth outlook for low-end consumption, both in rural and urban India. Expect weak demand for staples to continue. On the other hand, the outlook for discretionary spend would likely be an interplay of better rural demand but weaker urban demand,” the report added.

For daily household products and essentials, sales expanded largely due to price hikes, as companies increased price tags to offset rising cost of raw material, energy, packaging and transport. Prices of crude and palm oil, key ingredients for soaps, shampoos and detergents, have risen 60%, while packaging material costs went up by 20% during the quarter from a year ago. With Russia’s invasion of Ukraine further fuelling commodity and supply chain costs, companies also warned there will be further price hikes.

Unilever said 2022 began well for its priority markets, the US, India and China. “India posted 10.4% growth with flat volumes and this is against a backdrop of flat value market growth and negative market volume. So overall, we are growing well ahead of the market with business winning an excess of 75%,” chief executive Alan Jope told investors last week.