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How India GCCs are driving core retail and CPG value
In this EY India insights episode, we explore how India based GCCs in retail and consumer products are evolving beyond cost efficiency to drive strategic value.
In this episode of EY India Insights podcast, we explore how India based Global Capability Centers (GCCs) in the Retail and Consumer Products sector are evolving beyond cost efficiency to become strategic value drivers. Arpit Dharma, Partner, Business Consulting, EY India and Aniket Deshpande, Partner, Global Business Services, EY India, discuss how GCCs are powering core industry processes such as merchandising, supply chain, store operations and customer experience. The discussion also highlights the growing role of analytics, AI and agentic capabilities, alongside the importance of differentiated talent strategies and enterprise integration. Together, they examine how Retail and Consumer Product Goods (CPG) GCCs are shaping global decision making, accelerating transformation and delivering sustained business outcomes.
Key takeaways
Retail and CPG GCCs in India are moving beyond cost efficiency to become strategic partners driving enterprise‑wide value.
India based GCCs now own core retail and CPG processes, including merchandising, supply chain, store operations and customer experience.
Analytics, AI and agentic capabilities are increasingly embedded in GCC operations to improve decision quality, speed, scalability and business outcome.
Differentiated talent strategies and strong EVPs are critical as GCCs shift from volume hiring to quality, collaboration and enterprise ownership.
The next phase of GCC evolution will be AI native, outcome driven and deeply integrated with enterprise strategy and partner ecosystems.
The GCC narrative has shifted from cost to niche skills and transformation, with value creation now the primary driver.
Arpit Dharma
Partner, Business Consulting, EY India
The next phase of GCC value creation lies in AI led decision making, powered by strong data foundations and ecosystem partnerships.
Aniket Deshpande
Partner, Global Business Services, EY India
For your convenience, a full text transcript of this podcast is available on the link below:
Hello and welcome to this episode of EY India Insights. I am Arpit Dharma, Partner, Business Consulting, EY India. I lead the retail industry vertical in our GCC consulting practice. Today, we will discuss how India-based Global Capability Centers (GCCs) in Retail and Consumer Products (CPR) sector are transforming the industry globally, moving beyond the traditional cost efficiency play to a bigger, larger, more strategic business outcomes play.
I am joined by my colleague Aniket Deshpande, Partner, Global Business Services, EY India, who works closely with clients in Consumer Products to design, build, scale and transform GCCs as long-term value creators. Together, we will explore how GCCs are enabling core processes, embedding advanced analytics and AI into operations, and evolving talent and operating models to drive sustained value.
Today, Retail and Consumer Products GCCs support critical processes such as merchandizing, demand forecasting, supply chain, customer experience, and more. Which of these areas have seen the most meaningful transformation, and why does it matter so much for business performance overall?
Aniket
Consumer Products and Retail (CPR) as a sector has been a pioneer in adopting the GCC model. So, they were among the first centers after FS started and it has been one of the sectors which has delivered multiple functions beyond the traditional function.
Most of the CPR GCCs in India also have India as one of their key hubs from where they are delivering not only the high-volume work, but a lot of niche capabilities. And some of those that you mentioned include merchandizing and demand forecasting. Beyond that, they are also focusing on capabilities like store operations, design planning, inventory management, and supply chain. So, many global organizations contract this work to the media and marketing agencies, which in turn also sometimes deliver it from their India hub.
Also, a fair amount of action is in sales operations and customer service – an area where the focus is not just labor arbitrage and cost saving, but also to free up the sellers’ time, which is one of the main objectives, ensuring that the customer processes and policies are diligently applied and providing an omnichannel customer experience.
That is how it is changing in terms of landscape of processes and how things are transforming.
While we are on it, I also have a question for you. Cost efficiency is a thing of the past and everybody is expected to deliver on it. Typically, it is a lot more focused in the initial phase of a GCC setup, but eventually what starts becoming important is the value. From your perspective and experience in this space, what are the most significant ways in which GCCs are now shaping core business decisions and overall enterprise outcomes? What are you seeing in the market in the CPG and Retail GCCs?
Arpit
I will answer this question in three parts. Firstly, from the number of discussions that we have had with potential GCC clients, we see that more GCCs are being set up for niche skill availability in the India market or for driving or ownership of transformation programs, rather than just necessarily focusing only on cost arbitrage, which used to be the main driver till some time back.
The narrative is – let us focus on niche skill; let us focus on transformation; cost will anyway come. That is a given. Hence, the fundamental driver of a GCC setup decision has significantly evolved over the years. It continues to do so even today. It has evolved from cost to skills to transformation, with more GCCs now talking about agentic (AI).
For example, there was one which we set up a few years back where they wanted to build a capability for a combination of retail industry and analytic skills, which they found difficult to get anywhere else in their existing locations all over the world. A cost-driven business case was not discussed so frequently during the setup program.
The steering committee and the sponsoring CXO went to the extent of showing more interest in getting the right quality of talent, while speed to hire talent was a secondary consideration. Rather than chasing, he said he needed to hire a certain number of people during a certain duration. His focus was more on the quality part. Today, the GCC has more than 50% of the company’s global retail analytics headcount in India. That has been their experience in the country. The team here is, for example, helping the store manager sitting somewhere in North America or Europe identify assortments in their respective stores. They are impacting the top line through insights generated from here (India).
Second part of the answer: the speed with which the GCCs are going up – the decision matrix. Example of this evolution comes from mature GCCs, which have been around for 10-15 years. They first started building products or services for their internal consumption to meet the metrics that they were supposed to, but after the success and effectiveness of those products and services, they started betting on go-to-market and offer these to other retailers in the industry. Similar work is being done to impact shopping experience, pricing decisions, commodity trading interventions and so on and so forth.
This shows the quality of work that that they have been doing over the years – how they have won the confidence of the global headquarters around their capabilities, their ability to deliver on difficult assignments and ownerships. A big testimony of the value delivered is Indian GCC leaders subsequently taking global leadership roles in their organizations, after spending a few years leading the GCC here. This is because of the visibility of the cross functional work and priorities that India-based GCCs are getting today.
A lot of action is also happening on analytics. Rather than the process or function part, a lot of work is happening on the analytics and AI side. They are increasingly working to embed those in the retail operations. Every conversation with a GCC leader focuses on how they are using these capabilities to improve speed, accuracy, scalability and not just focus on operational efficiency.
Do you have any thoughts based on your conversations with the retail GCCs?
Aniket
This has been the buzzword and a lot of discussions around AI in this space. There are multiple examples out there; we partly covered some of that in the store level assortment that is happening in a retail GCC. But beyond that, a lot of data is being collated and managed by GCCs and is now being used to improve efficiency at the store and the operations on the other hand. Much of this data that we have seen in one of the retail GCCs, which is being used to track performance of SKUs across the stores, help the store manager plan their inventory, plan the replenishment, what SKUs to keep, to the extent of helping identify the need of an additional store in the region depending upon how the business has been.
So, a lot of data that is being collected is also now being used for making some of those business decisions. I think GCCs are also addressing inventory shrinkage, which is a big issue in many retail companies, and this is being done by combining some of the data analytics and AI-enabled cameras, which monitor the store activity and detect anomalies.
Many of these GCCs are quickly moving from just supporting scaling of AI to making it more of an AI-realized GCC and we are seeing this trend in motion in the market.
Another thing I will add is that while all of this is happening, a lot of this is also driven by partnerships. Many of these GCCs are collaborating with the startup and academia ecosystem, which is helping them drive innovation at speed and scale. So, that is the buzzword, which is not just helping scale on the AI side, but also making sure that the AI benefits are realized through the combined strengths of the GCCs and the partner ecosystem.
That is my view of how things are moving. While we have talked a lot about different functions and AI, but at the core of it is people and talent. Based on your experience, as the work becomes more complex and AI focused, how do you think are talent strategies shaping the operating models?
Arpit
We can continue talking about core industry functions, store operations and merchandizing and channel management, high-end technology and AI agent, but the core of it is talent and that is why perhaps most GCCs are coming to India. Hence, it becomes important to have a very robust talent strategy, the core of which is the differentiated employee value proposition (EVP) that GCCs can come up with from not day zero but day minus ten.
That is where it all starts. That proposition must reflect lived experience of the employees. It cannot just be put on paper and on billboards but has to be on the GCC walls. It has to be an experience that employees have to live. Also, access to leadership is extremely important. The employees cannot be just left like that in a GCC, and there has to be a real purpose behind the existence of the GCC.
If it is cost, it is cost. If it is value, it is value. If it is transformation, it is transformation. And if it is talent, it is talent. Hence, the EVP should focus on one or a combination of these few pillars. While setting up a retail GCC a couple of years back, I remember we worked on a pointed proposition. There was clear articulation of ‘what is in it for me’ for the employee in the communication – while doing the sourcing of profiles, doing the interviews, during the entire offer management process, the involvement of global leaders during the hiring process – all these things are extremely critical factors to convey to the employees that they matter; we (organization) is interested; to convey that it is not a back office and that employees are going to generate value for the wider organization or to convey things like employees will run the global rollout of a large transformation, maybe a large ERP transformation, or something like that. As a result of this EVP, the attrition rate for this GCC in the first 12 months of their existence during the peak of the Great Resignation wave was an absolute zero.
And no, there was no other number. It was an absolute zero. And that used to be talk of the town at that point in time. And hence what we learned was that EVP should not just remain a talent acquisition tool; it has to be a lived experience. It has to be used as a talent retention tool equally, if not more importantly.
What you sell at the time of hiring needs to be provided as experience by the leaders, by the organization. Otherwise, there is a new GCC coming up every month and the employee has an option. When it comes to the operating model, I believe a critical success factor is how well you have integrated the GCC at the enterprise level - is it a standalone entity, just a back office in a remote country, or is it well integrated with the ongoing conversations at the C-suite level? Have you carved out a specific talent investment budget because you are hiring so many new employees afresh, and have you outlined a budget for them, or for that matter, what does the governance look like? Is it when the weekly or a fortnightly or a monthly governance takes place, is the GCC reporting to the headquarter, or is it reporting a status with the headquarters as one team? And both those things make a big difference to the overall employee experience that is provided. Hence, the talent acquisition focus has been more on identifying and evaluating the collaboration skills with global teams.
You cannot just be a functional expert. They also check whether you can collaborate, articulate your thoughts in a different language, in a different time zone, in a different geography, rather than just focusing on the execution capabilities, where you take orders and deliver the work. Gone are the days of reporting just the number of software engineers we have hired in the first six months of incubation.
That will happen anyway because of the availability of talent. What the C-suite is asking is - when can I hire an enterprise architect? That is the kind of focus required from a talent acquisition point of view. Looking ahead, Aniket, how do you see the role of these GCCs evolving? And we talked about what has been the evolution journey of the last two decades of their existence. What do you feel is the path forward, and what should leaders start doing now to unlock their full strategic potential and not remain just a back office?
Aniket
It is an exciting time for CPG and retail GCCs, because I feel that many of these have been in India for a while. And in a way they have all foundational elements in place. So, they have the leadership, they have the depth and spread of the processes that they own and deliver. They have hired the right skills and capabilities and built on them. They have integrated technology teams, data SNPs that they are working on.
So many of these foundational elements are already there. In a way, they are all set to embark on the next wave of transformation, which is moving to a new operating model, as we see, which is more AI native, focused on outcomes, and build on a responsible AI framework. When we call this more intelligent GCCs, the CPG and retail GCCs are in good shape to run that path or that wave ahead. So, exciting times ahead, I would say.
Arpit
That perfectly summarizes the thoughts and experiences that we have had in this industry – what the GCCs are doing and gives a good directional view of where this, this industry is perhaps moving to. It is clear they are becoming central to strategy, to innovation and the execution globally in their own organization.
Good. This has been a great discussion, Aniket. Thank you to our listeners for joining us on this episode of EY India Insights. We look forward to continuing the conversation in our next episode.
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