A dozen CEOs,1 big bet: India

Time of India

3 days ago

Apple chief executive Tim Cook said growth in India accelerated in the June quarter with the iPhone maker reporting record revenue driven by double-digit expansion in smartphones, Macs and services. It's not just Apple that's upbeat on India. A dozen global chiefs of large companies such as Coca-Cola, Unilever, Reckitt Benckiser, PepsiCo, Nestle, Mondelez, Whirlpool, LG, Domino's, AO Smith and FedEx have renewed their bet on the country after a challenging phase. The CEOs were speaking on earnings calls for the last quarter.
Cook said new Apple retail stores—four of them—will open in India later this year, adding that most of the iPhones sold in the US were assembled in India in the last quarter amid uncertainty fuelled by US President Donald Trump's tariff talk. Apple currently has two stores in the country, in Mumbai and Delhi.
Executives across companies said there is a visible revival of demand in India after months of slowing sales. They are tapping into this recovery with more investments, distribution, equipment and innovation.
'We've seen some really strong volume growth in India and China,' said Kris Licht, global chief executive officer of the British Reckitt Benckiser Group Plc, maker of Dettol soap and Lizol disinfectant cleaner. 'Of course, these economies may not be immune to shocks that could roll through the global economy. But we expect sustained volume growth here and we're scaling up large innovation.'
India is a key growth market for global companies given that various large categories are still underserved.
Companies said they are increasing their focus on India with the revival of demand visible after unseasonal rains and geopolitical tensions weighed down sales since March.
Optimistic About Recovery | page 9
This came on top of a continued overall slowdown as inflation-hit consumers cut back on discretionary spending over the past two years.
Research firm Numerator (formerly Kantar) said in a report last week that demand for groceries, and household and personal care slowed to 3.9% by volume year-on-year in the June quarter, impacted by unseasonal rains.
'In the case of India, it's never going to be a straight line and indeed Q2 was not. But we are very bullish on India overall and optimistic about recovery,' said James Quincey, global chief executive of Coca-Cola. 'We've got a strong plan from a marketing and innovation point of view.… with some re-energised focus.'
Coca-Cola's unit case volume declined 5% in the Asia-Pacific region in the quarter. It attributed this to a decline in India due to the early onset of the monsoon and geopolitical tensions 'after a strong start to the year', Quincey said.
Rival PepsiCo had also reported a decline in its beverage business in India for the 12-week period ended June 14 on account of early rain, but the beverage and snacks maker's global chief executive Ramon Laguarta expressed confidence in India. 'We will adapt our price pack architecture to offer consumers more value and convenience,' he said.
The summer months between March and July generally contribute over half of annual sales for soft drink makers.
Karan Bhatia, partner, consumer products and retail sector, EY-Parthenon, said: 'Urban growth has been lagging largely because wage inflation was much lower over the last few years. But now, given the closing gap between wage inflation and overall inflation, we expect urban growth rates to hold steady.'
Bhatia added that urban growth is expected to improve over the next four-six quarters and get back to 7-8%. 'While there are some consumption headwinds such as layoffs in the IT sector, at the same time, there is change in skill sets that are emerging and I think new jobs will come up,' he said.
American refrigerator and washing machine manufacturer Whirlpool Corp's chief financial officer James W Peters said sales in India are lagging initial expectations due to the geopolitical trouble and an unusually cool summer selling season in the second quarter. Whirlpool is in the midst of selling a majority stake in its Indian operations to 'large third-party investors'. The company expects this to close by the year end, the management said.
Meanwhile, for Dove soap maker Unilever, the past month has seen growth slowing. Apart from that, it's also dealt with the sudden exits of its global and India chiefs. Unilever's global new chief executive officer Fernando Fernandez said Thursday said it would invest disproportionately in two of its largest markets, the US and India, 'to ensure it gets benefits of the parent's scale, advantage and portfolio footprint'.
Another category that's seeing green shoots is quick service restaurants. Despite the ongoing slowdown amid intensified competition, they still see India as a better performer than many global markets.
Domino's Pizza Inc said its growth in Asia last quarter was driven by India. Global chief financial officer Sandeep Reddy said it expects to see 'significant growth' in both India and China. 'I think Jubilant (which has franchisee rights for India) talked about their fiscal year 250 stores in India,' he said.
In the case of Apple, industry executives said the new stores are expected to be unveiled next month ahead of the festive season as the company launches new models of the iPhone and other devices. The four new stores are to open in Bengaluru, Mumbai, Pune and Noida.
Researcher Canalys has estimated India-manufactured smartphones account for 44% of the total imported to the US in the June quarter, up from 13% in the year-ago period.
Industry tracker Counterpoint Research said in a report this week that the Indian smartphone market's wholesale value rose 18% year-on-year in the April-June period, reaching its highest-ever quarterly value. It said the iPhone 16 emerged as the most-shipped device in the period, highlighting strong consumer demand.