Global Brands Bet Big on India
Does that mean the Make-in-India narrative is going down the drain for the moment?
The union government has been rooting for indigenous products and services under the Make-in-India initiative while also providing local players with a level-playing field in the fast-growing eCommerce initiatives. However, if one were to go by what the top-10 global brands say, their Indian operations are stronger than ever before.
Of course, among these big names are the likes of Apple, Coca-Cola and Unilever that have significant local presence when it comes to manufacturing in India, but the other brands aren’t exactly falling over each other to add capital expenditure to their plans when it comes to using the country as a major hub for exports or even for local consumption.
Top global brands eye India growth
A recent report published by ET said as many as ten large consumer-facing companies told stakeholders in their quarterly earnings calls that their India businesses were resilient and in some cases the growth drivers among all emerging markets during the January-March quarter. What this meant is they didn’t perceive any slowdown in India over the near term.
These CEOs also mentioned that investments in India would continue with a long-term growth potential amidst reports that China was still some way off recovering to its pre-Covid consumption levels and sales. Apple CEO Tim Cook felt India was at a tipping point as more people entered the middle class and became targets for their iphones.
He noted that there were opportunities across the board in India for both products and services. The company said it broke several quarterly revenue records in markets such as India, Turkey, Indonesia and the UAE, often doubling from their previous levels a year ago. On his visit to India to set up Apple’s first couple of stores, Cook described the country as an exciting market that would remain a major focus for the company.
Meanwhile, Mondelez International CEO Dirk Van de Put felt India was growing at an accelerated pace, with strong double digit numbers with no real signs of a slowdown. He said the outlook for 2023 remained optimistic. The company announced investments of Rs.4,000 crore in India over four years in both manufacturing and supply chain.
Companies report pre-Covid revenues
Most of these companies also said that in terms of revenues these had reached the pre-Covid levels once restrictions were removed and the resilience for more than three quarters had made the country a crucial destination for these companies.
Most FMCG companies also claimed that India was moving towards recovery faster than any other country with the outlook remaining positive as inflation showed signs of abating and consumption in the rural markets expected to revive once a good bound of monsoon rains came by. However, reports of a drier year have to be built into these expectations.
Unilever said it saw strong growth in India with positive volumes in spite of facing tough trading conditions. “It’s a real strength for our business, the ability to disaggregate India geographically. This is one of Unilever’s powerhouses. And we are confident in our ability to navigate the turbulence,” said Alan Jope, chief executive of Unilever, parent of local unit Hindustan Unilever.
Meanwhile, footwear company Skechers reported 21% year-on-year growth in sales last quarter in the Asia Pacific region led by India and South Korea. Strong double-digit growth in India and single-digit growth in China led to growth of the wholesale business, the leadership team said.
For restaurant chain Yum! Brands Inc, India figured prominently in expansion plans for brands like KFC, Pizza Hut and Taco Bell with over 40 new outlets opened last quarter, top management said. Liquor giant Pernod Ricard CFO Helene de Tissot said the company is very ambitious about India in the short and mid long-term.
