India proves to be high-growth market for consumer products MNCs: Report

New Delhi, April 24 India is quickly shedding its reputation as a daunting emerging market and is delivering superior returns to winning global consumer products companies, a new report said on Thursday.

For some leading multinational companies (MNCs), India affiliates deliver total shareholder return of between two and six times that of their global parents.

When looking at those with Indian revenue contribution of at least $100 million, the report by Bain & Company found that 60 per cent of the Indian affiliates’ revenues are growing at least double of their parent companies’ growth rate.

“Companies already investing in India are benefiting from accelerated growth, higher shareholder returns, and opportunities to shape globally relevant products,” said Ravi Swarup, head of Bain’s Consumer Products practice in India.

MNCs that have not entered the market must act now — or risk missing out on a vital growth engine and long-term strategic advantage, he added.

India is the third-largest contributor to consumer products growth among emerging markets over the past decade.

In the next 5-6 years, it will see the highest increase in working-age population globally and the fastest growth for income per capita among the top five consumer products emerging markets, which also include China, Brazil, Mexico, and Russia.

While India has traditionally been considered a difficult market for MNCs, it has made tremendous improvements to barriers.

Rapid digital adoption and widespread smartphone and internet penetration have enabled companies to effectively reach India’s diverse population.

According to the report, e-commerce and quick commerce have grown 2–3 times faster in value than traditional and modern trade channels, diminishing the need for an extensive traditional trade network to enter the market. Digital payments are also gaining popularity, with 45 per cent of Internet users adopting them for transactions.

Nikhil Ojha, head of Bain’s Strategy practice in the Asia-Pacific region, said that “What we are seeing is a market where both legacy players and new entrants can win, but only if they rewire their approach to be truly India-centric.”

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