EY - India - a pulse on the consumer products market

India — a pulse on the consumer products market

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EY - Key economic indicators

What to watch for

  • With slowdown in spending, consumers are trading up and down across products.
  • Pressures from volatility in input costs being aggravated by depreciating rupee.

What does a changing Indian consumer bode for consumer product companies and retailers?

Key trends

EY - Consumer consumption has slowed down

Consumption has slowed down among both urban and rural consumers. There is growing consciousness about family budgets and tightening discretionary spend.

Hubs of purchase are evolving. There is a rapid shift from traditional to modern and digital channels.

EY - Hubs of purchase are evolving
EY - E-commerce is gaining traction

E-commerce is gaining traction as a new sales channel for both business and retail customers.

The India growth story is slowing, but is on track. This requires players to take a long-term approach and adapt to changes in the market.

EY - The India growth story is slowing
EY - Discretionary spending power at the bottom of the pyramid has increased

Discretionary spending power at the bottom of the pyramid has increased, thanks to government schemes such as National Rural Employment Guarantee Act (NREGA), which provides employment for 45 million households.

The increasing presence of Indian managers in global headquarters (HQ) is driving greater focus to the Indian market.

EY - The increasing presence of Indian managers in global

Key questions for management

  1. How can you profitably service India’s middle and bottom of the pyramid? How can you tackle the slowdown in growth of consumer spending?
  2. Given the market trends and regulatory environment on pack sizes, food laws, etc., is there a need to revisit the strategy covering product mix, pricing, supply chain and related processes?
  3. How do you simultaneously manage the growth of traditional and modern trade in India, especially when the modern trade’s bargaining power is increasing?
  4. How do HQs implement international practices for compliance and governance in India without hampering the speed of growth?

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