‘India’s Seeing a Consumption Boom’

30 June 23

Demographics and the government’s infrastructure push are working in the country’s favour: P&G India CEO


Mumbai: Procter & Gamble (P&G) said India’s demographics and increasing work force, along with the pace of the government’s physical infrastructure thrust, have driven consumption over the past few years.


The company said a confluence of a few factors is working in India’s favour: the digital infrastructure that exists and the amount of insights across different dimensions are very different from any other market, along with the physical infrastructure, especially the thrust into rural areas, creating jobs among others.


“There is a perceptible change even over last year and now. The pace at which this is moving is not something that I have seen in the earlier phase,” LV Vaidyanathan told ET in his first media interview after becoming the CEO of P&G India last year. “We got to China about the same time as India, but the consumption boom started much earlier in China. We have been in India for the last 30 years, but the country has seen a consumption boom over the last 10 or 15 years.”


The Indian unit of the world’s second-biggest consumer goods maker has invested over Rs 20,000 crore over the past two decades in the country, which is already among its top 10 markets globally.


“When I left India, we had two plants. Now we have eight plants and 13 contract manufacturers. With our supplier eco-system, we invested about 1,500 crores, and to build women entrepreneurs, we invested 400 crores in the last couple of years,” said Vaidyanathan, who started his career with P&G nearly three decades ago and was in India until 2004 before shifting to ASEAN countries including Singapore, the Philippines, Thailand, and Vietnam.


P&G, with annual revenues of Rs 16,000 crore, competes mostly with Unilever’s local unit, Hindustan Unilever (HUL), which is nearly four times its size. The company controls more than half the market for sanitary napkins and shaving razors and has consistently gained shares in these segments despite being the market leader. However, shares have remained stagnant in large categories, including diapers, shampoo, and laundry, over the past few years.


“The focus really has been on category growth. There’s still a lot of runway to grow users and usage and start getting them to straddle across the portfolio offerings that we have in a particular category,” said Vaidyanathan, adding that it has made rapid strides in improving availability with a reach of almost 6 million stores and a direct network of 2.5 million stores. “We now have the portfolio to go across both urban and rural; we go across young consumers, older consumers, metros, and villages.”


Also, unlike other companies, which have nearly 40–45% of their sales coming from villages, P&G has historically been focused on premium and urban-centric products.


Focus ON Category Growth


The focus has really been on category growth. There’s still a lot of runway to grow users and usage and start getting them to straddle across the portfolio offerings that we have in a particular category.



Source – The Economic Times

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