India’s consumption is on a boom, fueled by a surging workforce and a push for infrastructure development, according to the CEO of Procter & Gamble (P&G) India. The company attributes this consumption growth to several factors, including the country’s digital infrastructure and insights, as well as government efforts to improve physical infrastructure in rural areas.
The CEO, LV Vaidyanathan, stated that he has witnessed a noticeable change in the pace of consumption growth in India compared to previous years. While P&G entered China around the same time as India, the consumption boom in China started much earlier, while India has experienced significant growth in the last decade or so.
P&G has invested over ₹20,000 crore (approximately $2.7 billion) in India over the past two decades and considers the country one of its top 10 markets globally. From two plants when Vaidyanathan left India to become CEO, P&G India now boasts eight plants and 13 contract manufacturers. In addition, the company has invested ₹1,500 crore in its supplier ecosystem and ₹400 crore to support women entrepreneurs in recent years.
Although P&G faces strong competition from Hindustan Unilever’s (HUL) local unit, which is almost four times its size, P&G has managed to maintain its market share and even gain shares in segments such as sanitary napkins and shaving razors. However, it has struggled to grow in larger categories like diapers, shampoo, and laundry over the past few years.
Vaidyanathan highlighted the company’s focus on category growth and expanding its user base. P&G has made efforts to improve availability by reaching almost 6 million stores through a direct network of 2.5 million stores. The company aims to serve both urban and rural consumers, catering to different age groups and regions.
Unlike other companies that heavily rely on sales from rural areas, P&G has historically focused on premium and urban-centric products. Despite this, the company recognizes the immense potential for growth in rural areas and aims to tap into this market.
In conclusion, P&G India’s CEO believes that India’s consumption boom is being driven by demographic factors, such as a growing workforce, as well as government initiatives to improve infrastructure. P&G has invested significantly in the country and aims to capitalize on the evolving consumer trends across various categories. While facing stiff competition, the company remains optimistic about its future growth prospects in India.
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