No articles found to show on this page.
MUMBAI: Global consumer companies such as Unilever, Colgate-Palmolive and Mondelez are upbeat about opportunities in India and said the country remains a bright spot after reporting significant sales growth in the latest quarter.
“In terms of the countries, specifically, where we see pickups, we see India getting better,” Unilever CEO Paul Polman said during an investor call to declare December quarter performance last week. India accounts for 2-9% of global sales for most consumer multinationals and has been one of their last bastions for growth.
Several companies have posted double digit year-on-year volume growth for the December quarter, mainly because of the low base after a demonetisation-induced dip in demand in the year-ago quarter. They said a steady demand recovery is under way when compared with sequential quarter, and appreciate the government’s policies.
“While the general sales tax and demonetisation might give us short-term shocks and disturb these quarters a little bit, they are also the right long-term things for the country,” Polman said. After revival in sales during October 2016, demand for consumer goods fell by a third in the next two months, when the government’s decision to withdraw currency notes of Rs 500 and Rs 1,000 denominations caused a temporary liquid cash crunch.
Ditto during the 2017 April-June quarter, which saw tepid sales growth despite healthy consumer demand because of destocking by trade, especially wholesalers and retailers who purchased limited inventory in the run-up to the GST. The companies seem to have recovered now.
“India is very strong, we had a 27% growth in Q4, but that’s of course lapping the demonetisation. Still, we grew double-digits without that and overall for the year, India is up 12%,” Brian Gladden, CFO at Mondelez, said in an earnings call last week. “We see a growing middle class, we still have a low per capita consumption of chocolates, and the GDP growth rates are pretty strong. So we are overall very bullish on India,” he said.
Last week, Amazon said more people joined its Prime programme in India in the first year than they have seen in any other country while technology major Apple reported double-digit growth in its revenue from India for the quarter ended December.
Demand for daily groceries and home and personal care products peaked in November with 9% volume growth, the most since 2010, according to data from market tracker Nielsen. Companies expect a volume boost from price-cuts that started in July last year and were further accelerated after the GST Council dropped tax rates on 200 products, including chocolates, toothpaste, shampoo, washing powder and shaving creams, to 18% from 28%.