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Multinational food company PepsiCo has posted a double-digit revenue growth in the Indian market during the third quarter (Q3) of 2024. The company in a NASDAQ filing said that the convenient foods and beverages unit volumes recorded "high single-digit" growth in India in Q3 2024.

The manufacturer of Lay's chips added that it has held or gained a share in the Indian market in both savoury snacks and beverages categories to date.

Overall, Pepsico's international business delivered 4 percent organic revenue growth, compared to 12 percent organic revenue growth in the third quarter of 2023.

In the US market, the FMCG brand delivered 1 percent organic revenue growth, in contrast to 6 percent organic revenue growth in Q3 2023.

<a href="https://www.storyboard18.com/brand-makers/pepsico-appoints-mark-kirkham-as-senior-vp-marketing-pepsi-sparkling-brands-40122.htm">PepsiCo appoints Mark Kirkham as Senior VP – marketing, Pepsi & sparkling brands</a>

Despite the subdued performance in Q3 2024, Chief Executive Officer (CEO) Ramon Laguarta said, "We will continue to elevate and accelerate our productivity initiatives across the organization to support disciplined commercial and advertising and marketing investments".

The CEO added that the company would take action to stimulate growth through targeted investments in brands, package, and channel offerings where better value, amplified advertising, and more.

To mitigate the risk of inflationary pressure and support commercial investment, PepsiCo said it would focus on automation at its plants, warehouses, and distribution centres; advance digitization; maximize labour efficiencies, etc.

	
<a href="https://www.storyboard18.com/brand-marketing/pepsico-india-brings-together-employees-and-partners-for-the-plog-run-43963.htm">PepsiCo India brings together employees and partners for the Plog Run</a>

Further, the company said that it would be investing to expand the offerings within its 'Positive Choices' portfolio. This includes brands such as SunChips, Stacy’s and PopCorners, Baked, and Simply varieties. "We will continue to build and grow our presence within the multicultural and value-conscious segments such as Sabritas and Chester's," Pepsico added.  Sabritas and Chester's delivered double-digit and mid-single-digit net revenue growth, respectively, and in the aggregate, gained share in Q3, it noted.

PepsiCo is expected to deliver a low-single-digit increase in organic revenue (previously approximately 4 percent organic revenue growth) in 2024.  It has also projected that international organic revenue growth would surpass North America's organic revenue growth in the current calendar year.

PepsiCo reports double-digit organic growth revenue in India during Q3 2024

Landmark Group lifestyle brand Max Fashion's supply chain has been restored in Bangladesh after witnessing a brief disruption due to ongoing political unrest, Pallavi Pandey, Head of Marketing told Storyboard18. Pandey said that at the beginning of the crisis in August, Max Fashion India faced major disruption in sourcing but in the past one week, things have restored.

"There was a slowdown which was happening in terms of the sourcing in the deliveries, but everything got cured last week," Pandey said.

Further, she revealed that the apparel-to-accessories conglomerate is eyeing to deeply penetrate other territories such as Vietnam and India to strengthen its supply chains. "For the future, we all have to find the right space where it balances out, like Vietnam and even India as we have a good base in Tirupur and other places too".

Max Fashion's youth-centric brand Max Urban brand recently launched a partnership with Bollywood actor Alaya F to reinforce its popularity among Gen Z. Urban was launched this year in April. "So far Max Fashion, an international fashion house from Dubai, has focused on its core customers such as kids and families. However, this year, we decided to connect with the 17 and 24  age group as it's a tech-savvy segment with a lot of exposure to international styles and fashion," Pandey said.

She said that the launch of Urban has boosted the online business for the brand, and added that the offline business has remained unaffected. "Considering the surge in demand from the 17-24 age group on both online and offline channels has a positive impact on our business. Therefore, it was imperative for us to launch Max Urban across 515 stores".
 
The fashion conglomerate has planned to expand its stores in metro cities, specifically in malls. Pandey said that the value fashion brand added almost 100 stores in 1-1.5 years and is looking for a double-digit expansion this year. "We are looking for independent High Street big stores for us in Metro and state capitals such as Lucknow, Jaipur, and Ahmedabad to scale up brand reach".

"We contribute almost 85% of our business to brick and mortar and 15% to online," she added.

Pallavi also stated that Max Fashion is not looking to enter into any premium segment because "our proposition is fashion at great value". 

On AI, Pandey said that that clothing brand has a lot of analytics and learning within the new technology, and added, "It's too early to adapt too many things in terms of our large settled business across 20 plus countries. We are using AI in terms of the loyalty and the CRM base where we would be able to understand the choices of customers and their buying habits".

Supply chain in Bangladesh restored after disruption: Max Fashion

Chinese smartphone brands such as realme, Xiaomi, and Vivo have gained popularity among Indian youth due to "affordable pricing" and "updated technology", a survey has revealed.

According to a consumer survey conducted by Counterpoint Research, realme smartphones have more fans in India (at 58%) in the age group of 16-25 years.

realme led in offering the latest technology (62%), value for money (63%), and stylish design (61%) in the sub-Rs 20,000 price segment, as per the survey.

Counterpoint research director Tarun Pathak said Realme is also popular in other Asian countries such as Bangladesh and Indonesia.

"Realme is popular among Indonesia’s young smartphone consumers, while the brand is known for its product quality in Bangladesh. Around the world, realme has been praised for catering to young smartphone users by tailoring its strategies, product designs, and pricing to their preferences," Pathak said.

Pricing and technology have remained the key parameters among Indian youth while purchasing the smartphone.

Xiaomi and Vivo bagged 2nd and 3rd spots with 54% and 53% popularity in the same segment as per the Counterpoint Research.

"The young generation approaches its smartphone purchases with strong enthusiasm. It prioritizes the latest technologies, value for money, and stylish designs. In India, where approximately 60% of the smartphone market falls in the sub-Rs 20,000 price range, realme has established a robust position across all these three key parameters – latest technology (62%), value for money (63%), and stylish design (61%). realme is followed by Xiaomi on these parameters but with a big gap," senior analyst Arushi Chawla said.

From Xiaomi to realme, Chinese smartphone brands most popular among Indian youth: Survey

The Great Indian Festive Spending Season has been going great guns, with the Indian consumer purchasing 39 percent more online in volume terms and 22 percent more in value terms compared to last year, according to SaaS technology platform Unicommerce.


Surveys too paint a robust picture of businesses' hopes and expectations, with the National Council of Applied Economic Research's latest Business Confidence Index - which covers 500 companies - showing "all-round improvement" to 140.7 in July-September 2023 from 128 in the previous quarter, reflecting optimism about the performance of the economy.


Other surveys seem to be saying something similar, with Dun & Bradstreet's Composite Business Optimism Index up 0.4 percent to 70.3 in the last quarter of 2023.


"While the global economic slowdown has affected consumerism, businesses anticipate higher profitability with easing inflation and increased industrial production, even though sales volumes remain relatively stagnant, and order books show modest growth," Arun Singh, Dun & Bradstreet's global chief economist, said on November 8.


Consumers, however, seem to be feeling a bit differently.


<strong>Cracks in consumption story</strong>


India's industrial growth cooled to a three-month low of 5.8 percent in September, data released on November 10 showed, well below economists' expectations of 7.4 percent. Driving growth lower were consumer goods.


While production of consumer durables rose a mere 1 percent year-on-year in September – down from 5.8 percent in August – output of non-durable goods rose 2.7 percent as against 9.6 percent the previous month.


For the first half of 2023-24, production of consumer durables was 0.7 percent lower than in the same six-month period last year, while output of consumer non-durables was 6.8 percent higher.


According to Nomura economists, the weak industrial production growth numbers for September reflect "cracks in consumption story".


The Nomura India Normalisation Index for industrial production, which removes base and seasonal effects and sets the pre-pandemic level at 100, shows the consumer durables sector is not just a laggard but also trending below pre-pandemic levels.


"This speaks to weaker discretionary demand among consumers," Nomura economists Aurodeep Nandi and Sonal Varma said in a note on November 10.

QuantEco Research's economists agreed, saying consumption-oriented activity "remains sluggish".

"So long as these segments do not revive comprehensively, a broad-based and sustained pickup in IIP (Index of Industrial Production) growth will remain elusive," India Ratings and Research's Sunil Kumar Sinha and Paras Jasrai said.


<strong>Consumption moderation ahead?</strong>


The future of India's consumer story remains uncertain. According to ratings company CareEdge, while falling inflation is a positive, "pain points in the form of elevated prices of select food items continue to persist". In the near term, rural consumption could get a leg-up from government "relief spending" due to the ongoing and upcoming elections.


"The recent substantial reduction in LPG price, promised increase in coverage of food subsidy, and the speculated augmentation of PM Kisan Nidhi Scheme will support rural consumption to some extent," QuantEco Research added.


However, urban consumption – which has driven spending on premium goods over the past couple of years – faces a difficult future, with Tanvee Gupta Jain, UBS' India economist, predicting normalisation of household consumption growth in 2024-25.


"We expect consumption growth to gradually normalise on softening corporate wages, flattening personal loan growth, peaking post-election welfare spending by the government, and the lagged impact of monetary tightening on households' disposable income," Jain said on November 8.


India's post-pandemic recovery has been K-shaped. If urban consumers were to also tighten their purse strings due to the aforementioned factors, the perfect storm might just be brewing for the economy.





Optimism among businesses, but India's consumption story has cracks

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