EY - India - a pulse on the consumer products market

India — a pulse on the consumer products market

December 2016

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*Source: Nielsen Global Consumer Confidence Report Q4 2014

Key questions for management

  1. How to increase market penetration and gain scale in the Indian market?
  2. How to measure effectiveness and optimize marketing spends in digital?
  3. How to manage margins in the face of increasing pressure from modern trade and e-commerce?
  4. How do HQs implement international practices for compliance and governance in India without hampering the speed of growth?
  5. How can Consumer Products and Retail companies sustainably tap the Indian e-commerce opportunity?
EY - Key economic indicators

What to watch for?

  • With slowdown in spending, consumers are trading up and down across products.
  • Maintaining margins tougher as pricing headroom is limited. Commodity volatility can increase the stress.
  • Pressures from volatility in input costs are being aggravated by depreciating rupee.

What does a changing consumer mean for the sector?

Key trends

EY - Consumer confidence rising high

Consumer confidence* remains high: India regained the top position in consumer confidence in Q3 2016, after losing it briefly in Q2 2016 to Philippines.

E-commerce is gaining traction as a sales channel for consumer products companies and consumers.

EY - E-commerce is gaining traction as a sales channel
EY - Renewed interest to invest in India

Renewed interest to invest in India: Government initiatives such as Make in India and changes in foreign direct investment regulations have strengthened India’s attractiveness as an investment destination.

Operational efficiencies, innovation and new launches help companies manage growth despite subdued volumes.*

EY - Operational efficiencies, price hikes and new launches
EY - Increased value trading

Increased value trading: Global CP companies compete with white labels and local brands, which adversely impacts their potential to charge a brand premium.

Volatility in most emerging markets along with ongoing struggles in China are driving greater focus on the Indian market.

EY - Volatility in most emerging markets along with ongoing struggles in China
EY - Efficiency and automation

Efficiency and automation will drive more growth as the sector adopts more technology.


*Source: Nielsen Global Consumer Confidence Report, Q3 2016

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