india — pulse of retail and consumer markets - de.ey.com fileindia’s attractiveness as an...
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December 2016
India — pulse of retail and consumer marketsWhat does a changing consumer mean for the sector?
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EY contact
For more information: ey.com/consumerproducts Follow us on Twitter: @EYconsumergoods
Pinakiranjan MishraPartner and National Leader,Retail and Consumer Products, EY India
[email protected]+91 226 192 0400
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?
* Source: Nielsen Global Consumer Confidence Report, Q3 2016
Key economic indicators
What to watch for• With slowdown in spending, consumers are
trading up and down across products.
• Maintaining margins is tougher as pricing headroom is limited. Commodity volatility can increase the stress.
• Pressures from volatility in input costs are being aggravated by depreciating rupee.
GDP growth 7.6%
IMF, October 2016
INR/US$ 66.8
OANDA, October 2016
IMF, October 2016
Inflation (CPI) 5.5%
MOSPI, April–June 2016
Consumer spending (% annual change) 6.7%
Key trendsConsumer 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.
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.
Volatility in most emerging markets along with ongoing struggles in China are driving greater focus on the Indian market.
Efficiency and automation will drive future growth as the sector adopts more technology.
Operational efficiencies, innovation and new launches help companies manage growth despite subdued volumes.
Increased value trading: Global CP companies compete with white labels and local brands, which adversely impacts their potential to charge a brand premium.