“Indian Retail at a Glance 031224"

This week’s edition of our newsletter captures the dynamic shifts in India’s FMCG and retail sectors, as industry leaders embrace innovation, tackle economic challenges, and redefine growth strategies. Reliance Consumer Products Limited (RCPL) continues its aggressive push into the market by leveraging affordable pricing and higher-margin products, posing a challenge to established players. A leading beverage player, on the other hand, is infusing technology into India’s retail ecosystem, unveiling advanced solutions that enhance supply chains and consumer touchpoints. Meanwhile, Hindustan Unilever Limited (HUL) is set to create India’s largest ice cream company post-demerger, further consolidating its market dominance.

At the same time, the sector faces challenges from rising wheat prices, which are putting pressure on FMCG companies reliant on baked goods and snacks. The question remains whether brands will pass on these costs to consumers or find innovative solutions to balance profitability. Adding to the optimism, India’s gig economy is surging, expected to reach $455 billion this year, presenting new opportunities for the retail and FMCG sectors to tap into flexible labour pools. With Q2 GDP data highlighting rural consumption and government capital expenditure as key indicators, the broader economic landscape signals robust growth potential, even amidst inflationary pressures.

As we track these evolving trends, it’s clear that India’s FMCG and retail industries are at the forefront of innovation and resilience, navigating challenges with confidence while seizing new opportunities for expansion.

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1. Reliance's FMCG arm bets on higher margins, cheaper pricing to gain ground

Reliance Consumer Products disrupts FMCG market by offering its distributors 6-8 percent margins - double the industry average - while pricing products 20-40% lower than competitors, to drive growth.

2. Retail Ecosystem Gets a Boost with Coca-Cola's Cutting-Edge Solutions

As India charts its path to become $35 trillion, fully developed economy by 2047, the non-alcoholic beverage sector continues to remain a contributor, providing value addition to the nation's economic growth through effective retail networks and consumer-focused strategies. Within this context, Coca-Cola India is strengthening the country's retail ecosystem by equipping retailers nationwide with innovative cooling solutions.

3. From bread to biscuits, high wheat prices put FMCG companies in a fix. Can they afford to raise prices
   
   Wheat prices have remained elevated for a year now and FMCG companies responded by increasing prices or reducing the package size of products using this grain as an input. But how sustainable is this strategy for the companies, given that the demand scenario and wheat supply situation remain muted remains to be seen.

4. HUL to create the largest Ice Cream company in India, post demerger
   
   Hindustan Unilever Ltd. (HUL), the country’s leading fast-moving consumer goods (FMCG) maker, has decided to demerge its ice cream business. The board of directors of the Mumbai-headquartered company agreed on Monday that the ice cream division - represented by its master brand Kwallity Walls will be a separate listed entity.

5. India's gig economy set to hit $455 billion this year: Report

India's gig economy continues to grow rapidly, emerging as a significant driver of economic growth and job creation. A whitepaper released by the Forum for Progressive Gig Workers highlights the sector's transformative potential.

6. India Q2 GDP data today: From rural demand to govt capex—here are five key indicators to watch

The Indian economy likely moderated to 6.5 percent in the July-September quarter of the current fiscal (Q2FY25) due to an uneven performance across sectors and a decline in private consumption, especially in urban areas amid high food inflation. Heavy rainfall, weak corporate margins, and subdued exports weighed the overall GDP print.