Apple CEO Tim Cook told analysts Friday that the iPhone maker posted record June-quarter revenue in India, alongside the US, western Europe, China and Japan, with double-digit growth across most emerging markets. Apple’s Mac computer business also recorded its best-ever sales in India, growing in double digits.
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Fast-moving consumer goods (FMCG) multinationals including 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.
Inflationary Pressures Ahead
Unilever said India led its June-quarter performance, with growth accelerating to 10%.
Both Unilever and Coca-Cola global CEOs said they will continue investing in India to strengthen market leadership positions. Unilever CEO Fernando Fernandez told analysts the company believes that the next decade belongs to India.
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. CEO Kris Licht said India performed “very strongly”, with consistent growth across all categories.
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The Hershey Company CEO Kirk Tanner said Brazil, the UK, and India were among the markets the company is most excited about, with India one of its strongest performers this year. “Demand (in India) is running ahead of plan,” he said. “So, I feel good about that.”
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 Cadbury and 5 Star maker added 100,000 outlets in India during the quarter, while its licensed biscuit brand Biscoff has been such a “great success” that the company is “hurrying up” construction of a second production line.
Global chiefs 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.
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.
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.
US 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, however, 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.
In electronics, memory chip prices have nearly tripled, forcing companies to raise prices. Market tracker Counterpoint Research Friday said 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 the recent increase in prices of its Mac computers and iPads.