Indian retail and FMCG sectors are witnessing strategic shifts, from acquisitions to quick commerce expansion.
FMCG giants like HUL, ITC, Reliance, and Adani Wilmar are making key acquisitions as market valuations become more attractive. Meanwhile, companies are struggling with a shortage of salesmen due to extreme weather, evolving retail models, and competition from the gig economy.
Quick commerce is heating up, with Spencer’s Jiffy, Tata’s Neu Flash, and Shoppers Stop entering the space. Global investors are also betting big, Temasek acquired a 10% stake in Haldiram’s for $1 billion, highlighting India’s booming food sector.
Reliance Consumer Products is gearing up for a national rollout, while Godrej Consumer Products is expanding globally with a new ₹515 crore manufacturing hub in Tamil Nadu. On a macro level, retail inflation has dropped to a seven-month low of 3.6%, raising hopes for an interest rate cut that could further boost consumer spending.
Click on the headings below for insights on how these trends are shaping India’s retail landscape…
1. FMCG companies are shopping amid market slowdown
FMCG companies are out shopping in the market, weighing potential acquisitions. Three months into the year and the space has seen acquisitions by HUL, ITC, Reliance Consumer Products and Adani Wilmar. A subdued market has made valuations more rational, making it a ripe time to buy.
2. Indian FMCG companies struggling with a shortage of salesmen amid growing gig economy
Indian FMCG companies are facing a significant shortage of salesmen as the demand for "feet on the street" workers declines. Sales targets, extreme weather conditions, and competition from the growing gig economy are contributing factors.
3. This is the money Hindustan Unilever is chasing in India
Hindustan Unilever remains optimistic about India despite the recent consumption slump, seeing the affluent and emerging middle class driving growth. India, Unilever's 2nd-biggest market, is projected to see significant rises in premium and mass consumption segments. Future demographic shifts favouring a larger middle and upper-income group bolster Unilever's confidence in long-term prospects.
4. Godrej Consumer Products Tamil Nadu FMCG unit eyeing US, LatAm markets
Godrej Consumer Products (GCPL) on Monday commenced operations at its first integrated greenfield manufacturing plant in Chengalpattu district, Tamil Nadu, with an investment of ₹515 crore. The company aims to develop the unit into an export hub targeting markets like the US, Latin America (LatAm), and Africa, among others.
5. FMCG giants are stepping up their quick-commerce game
Spencer’s Retail launched a 30-minute delivery service called Jiffy in January this year and Tata Digital also started Neu Flash, its 15-minute delivery service. Meanwhile, Shoppers Stop has firmed up plans to enter quick commerce as well.
6. Temasek acquires 10% stake in Haldiram's snacks business for $1 billion
Singapore’s sovereign investment firm Temasek has secured a deal to acquire nearly a 10 per cent stake in the snacks division of India’s Haldiram’s for approximately $1 billion. The agreement follows months of negotiations, with Temasek viewing Haldiram’s as a highly valuable asset that will bolster its focus on India's fast-growing consumer sector. The deal also represents the increasing interest of global investors in India’s food and beverage industry, particularly in the savoury snacks segment.
7. Reliance Consumer biz to see national rollout
Reliance Consumer Products Ltd (RCPL), the packaged goods arm of Reliance Industries Ltd (RIL), will take three to four years to distribute its products nationally following a select rollout of products such as Campa and Independence, according to persons in the know.
8. Retail inflation at 7-month low of 3.6%, thanks to slowing food prices
Tomatoes, potatoes lead the dip in vegetable prices, pulses cheaper for the first time this year; with inflation dipping below RBI’s 4% target, monetary policy committee may cut repo rate by 0.25% next month.
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