It’s the rise of the local giant. Companies with Indian descent appear to be performing much better than multinationals in the domestic FMCG sector.

Domestic firms’ agility in innovation and their go-to-market attitude are holding them in good stead, according to an executive from Nielsen, a global measurement and data analytics company.

Sameer Shukla, Executive Director, Nielsen India, told BusinessLine : “When we looked at the big manufacturers with more than ₹1,000 crore offtake, we noticed that of the top 10 fastest growing manufacturers, nine were companies of Indian origin. This number has increased from seven in 2016 to nine in 2018. And a majority of the fastest growing companies are food companies.”

The implications of this are manifold, Shukla went on to add.

“Local giants are seen to be more agile in reacting to market trends and coming up with products catering to the local market. However, multinationals tend to differ on this aspect,” he added.

Moreover, as the rural-to-urban growth differential has picked up again, with wholesale channels bouncing back, “local giants appear to be stronger in the rural market”, he observed. “With rural markets growing faster than urban markets, domestic FMCG firms are spreading their reach.”

Unveiling its FMCG quarterly report for the quarter ended June 30, Nielsen India forecast that the sector is set to clock 12-13 per cent growth over the July-December period. This is closer to the growth range witnessed by the sector in 2017.

Providing a future perspective, the agency has said an increase in the minimum support price (MSP) of key rabi and kharif crops, coinciding with the festive season, is likely to provide a significant boost to recovering farm income.

Noting that as the trade dynamism triggered by demonetisation and GST rollout has almost settled down, Nielsen pointed out in a report that the April-June 2018 quarter witnessed strong shipment growth on the back of a low base of last year.

Related Topics