The Indian consumer goods sector has traditionally suffered from being located in a prime market for global giants. However, according to recent statistics, India’s consumer goods manufacturers may be on the threshold of shedding the pressures of multinational conglomerates and acquiring a major share in the world’s most populous free market.
According to figures released by Deloitte, a global leader in consultancy, Indian brands Ruchi Soya and ITC have broken into the top 30 of the fastest growing consumer goods firms in the world. Edible oil giant Ruchi Soya came in at 22nd, while multi-industry conglomerate ITC, the largest producer of cigarettes in India, ranked 28th.
According to market capitalization, however, the order of the Indian brands is comprehensively reversed. The established ITC has a market cap of INR 2.8 lakh crore (INR 2800 billion – close to US$48 billion), while the rapidly emerging Ruchi Soya has market capitalization of about INR 1,500 crore (INR 150 billion – about US$2.4 billion).
ITC’s large cigarette production operation constitutes about half of its total revenue and is complemented by the company’s recent strong forays into the hospitality industry and the FMCG industry, in the latter of which it is now among the largest firms in India.
The ameliorating conditions regarding inflation in India will, according to Deloitte, result in increased profitability for consumer goods manufacturers. A major concern for the national economy a few months ago, inflation has fallen to a three-month low according to data tracked by the Reserve Bank of India. Inflation in the consumer goods has in fact fallen into negative territory, indicating falling prices of consumer goods, signifying good news for the average consumer and increasing sales figures for consumer goods companies.
The optimistic feeling about growing entrepreneurship in India is sure to be boosted by these figures.