Global brands across technology and consumer goods are pointing to India as their fastest-growing major market in the June quarter, according to a report by Writankar Mukherjee in ET Retail. Apple and Unilever led the chorus, with both companies reporting record or accelerated growth in India, even as rising inflation and input costs threaten to moderate the pace in coming months.
Apple's record quarter in India
Apple CEO Tim Cook told analysts Friday that the iPhone maker posted record June-quarter revenue in India, alongside the U.S., western Europe, China and Japan, with double-digit growth across most emerging markets, according to ET Retail. The company's Mac computer business also recorded its best-ever sales in India, growing in double digits.
The momentum is not expected to continue at the same pace. Market tracker Counterpoint Research said Friday that Apple's India growth is expected to moderate to single-digit volume growth and double-digit value growth, with a possible iPhone price hike, adding to recent increases in prices of its Mac computers and iPads. Memory chip prices have nearly tripled, forcing companies to raise prices, the report said.
FMCG multinationals see faster India growth
Among fast-moving consumer goods (FMCG) multinationals, Unilever, L'Oreal, Mondelez International, The Hershey Company, The Coca-Cola Company and Reckitt reported faster growth in India, with some saying demand exceeded expectations, ET Retail reported.
Unilever said India led its June-quarter performance, with growth accelerating to 10%. Unilever CEO Fernando Fernandez told analysts the company believes the next decade belongs to India. Both Unilever and Coca-Cola global CEOs said they will continue investing in India to strengthen market leadership positions.
Reckitt said emerging-market volumes rose 3.2% in the June quarter, driven by strong performance of Dettol in China and India, and Durex in India. Its India business grew in high single digits.
"Very strongly," Reckitt CEO Kris Licht said of India's performance, with consistent growth across all categories.
Mondelez International chairman and CEO Dirk Van De Put said consumer confidence across emerging markets remained stable, with India "very strong," while China was softer. The maker of Cadbury and 5 Star added 100,000 outlets in India during the quarter. Its licensed biscuit brand Biscoff has been such a "great success" that the company is "hurrying up" construction of a second production line.
| Company | India performance | Key detail |
|---|---|---|
| Apple | Record June-quarter revenue | Mac best-ever sales, double-digit growth |
| Unilever | Growth accelerated to 10% | India led June-quarter performance |
| Reckitt | High single-digit growth | Emerging-market volumes up 3.2%; Dettol and Durex strong |
| Mondelez | "Very strong" | Added 100,000 outlets; Biscoff second line |
| Yum! Brands | Key KFC expansion market | Taco Bell strong same-store sales, scaling up |
| AO Smith | "Innovation juggernaut" | Must move fast to keep pace with consumers |
Inflation, price hikes and headwinds
The optimism comes amid retail inflation in India rising in May and June due to higher fuel prices, costlier daily essentials and FMCG products following supply-chain disruptions from the West Asia crisis, rupee depreciation, and rising global freight costs, according to ET Retail. Several companies raised prices over the past two months to offset higher input costs, eroding a portion of the price-cut benefit from last year's goods and services tax (GST) rate reduction.
QSR expansion and consumer electronics
For American fast-food company Yum! Brands Inc., India was among the biggest contributors to KFC's global unit expansion in the June quarter, alongside China, Korea, Japan and Turkey, while Taco Bell reported strong same-store sales growth and continued scaling up in India.
U.S. water heater and purifier maker AO Smith described India as an "innovation juggernaut," saying the company has to move incredibly fast to keep pace with rapidly evolving consumer preferences.
Industry executives flagged key headwinds including the risk of an El Nino weather pattern this year, additional inflationary pressures stemming from the West Asia conflict, and rising input costs that could weigh on consumption in India over the coming months.
The June-quarter results indicate that India remains a strategic growth priority for multinational boards, according to the companies' statements reported by ET Retail. However, the combination of inflation, supply-chain pressures and a likely iPhone price increase suggests the pace of growth may face near-term friction. Investors and analysts will watch upcoming quarterly disclosures to see whether the moderation forecast by Counterpoint for Apple extends to the broader consumer market.
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