Unilever, Colgate-Palmolive and Mondelez India are very excited about business opportunities. Looking at the good sales growth achieved in the recent quarter, India has remained a bright spot for them. Paul Polman, Chief Executive Officer of Unilever, said, “India’s position is improving, especially among the countries where growth has accelerated. Most of the consumer multinational companies have sales of 2 to 9% in India and this is one of the important markets for them.
Volume growth of many companies doubled on an annual basis in the December quarter. The biggest reason for this is the low base deals made in December 2016 due to Demonetization. Polman appreciated the policies of the central government and said that there is a consistent recovery in demand on a quarter-on-quarter basis.
“We had a short-term setback due to GST and Demonetization and there were some obstacles in the last few quarters, but these are the steps taken in the right direction for the country if thought for long-term,” Polman said.
After sales revival in October 2016, demand for consumer goods companies declined by one third in the next two months when the government suddenly announced to ban the high-value currency notes of Rs 500 and Rs 1000. This caused a temporary lack of cash in the system. The same happened in the June quarter of 2017, despite having a healthy consumer demand due to the trade, particularly the wholesale and retailers, the sales growth of the companies remained sluggish as they bought the inventory before the implementation of GST. Now it seems that the companies have been recovering.
Brian Gladden, Chief Financial Officer of American confectionery company Mondelez said, “India is in a very strong position. Our growth in the fourth quarter is 27%. Due to demonization, it had been hampered. Otherwise, Indian business growth has been in double digits and annual growth is 12%. The size of the middle class is increasing, GDP growth has been strong, yet the consumption of chocolate per person in India is very low. Therefore, we are bullish on India.”
Last week, the legendary e-commerce firm Amazon had said that the number of subscribers subscribing to their prime program in India was higher than any other country launch. Apart from this, veteran technology firm Apple had announced that its Indian revenue growth in the December quarter was in Double Digit.
The Indian market will give much more than it is anticipated.