Source: LiveMint.com, Dec 05, 2019
Overseas business, led by better performance in markets such as Bangladesh and Indonesia, helped fast-moving consumer goods (FMCG) makers tide over weak demand in the domestic market, with Marico Ltd, Godrej Consumer Products Ltd (GCPL) and Emami Ltd posting 7-20% growth in their international business.
International markets contribute between 20% and 50% of sales for some domestic FMCG companies that have over the last decade bolstered their presence in West Asia, Africa, Latin America and south-east Asia, catering to increased demand for packaged consumer goods.
Companies such as Marico and GCPL have stepped up launches and product innovations in international markets, especially Bangladesh and parts of Asia, over the last one year. This, executives said, helped them hedge weak demand on their home turf.
GCPL, which draws over 46% of sales from international business, said it launched more products in key global markets in the last year than in India. “If you see the last year, the number of new launches in markets such as Indonesia, as well as in parts of Africa, have been higher compared to what they have been in India,” said Sameer Shah, head, finance (India and Saarc), at the Mumbai-based firm.
For the September quarter, the maker of Good knight mosquito repellent and Cinthol soaps reported a 7% sales growth in its international business on a constant currency basis, while India business sales grew 1%.
Earlier this year, Mumbai-based Marico Ltd, the maker of Parachute and Saffola, entered the baby care segment comprising oils, lotions, etc., in Bangladesh, its largest international market. International markets contributed 22% to the group’s FY19 turnover.
During the September quarter, Marico registered an underlying domestic volume growth of 1% and a constant currency growth of 9% in the international business.
“International business provided some respite on the back of a robust performance in Bangladesh,” the company said.
Kolkata-based Emami Ltd saw its international net sales grow by 20% during the quarter, while net sales in the domestic market grew 3%.While “the slowdown in India will take some time to recover, we don’t see such challenges overseas”, said Vineet Agrawal, chief executive officer Wipro Consumer Care and Lighting, which draws more than 50% of its business from overseas markets.