Mid-sized consumer cos to benefit from consumption boom: Report

Report says that the expected growth in the rural market is key in shaping the trend for consumer space

The Indian consumer market, driven by increasing disposable incomes and a favourable demographic shift towards a majority working population, is opening up significant opportunities for several mid-sized consumer companies, a report said.

"There has been spectacular growth in this segment in recent years, driven by an upbeat economy and enhanced consumer spending," the Federation of Indian Chambers of Commerce and Industry-PwC report said.

Further, there has been an increase in the response rate of these companies, contributing to their growth.

For example, when oil prices dropped, mid-sized companies reacted quickly and passed on the benefit to customers by reducing the prices of products, cutting into the volumes of larger companies, the report added.

 

However, as these organisations are now at the cusp of their next wave of growth, the report notes that a well-crafted 'go to market' strategy will be critical to compete directly against large multinationals as well as startups and companies with disruptive business models.

"In order to stay relevant and succeed in the market, mid-sized consumer companies need to be prepared to scale up significantly and rapidly with 'go to market' as a key lever of growth," the report said.

Among the key trends shaping the consumer space is the expected growth in the rural market, with around 68 per cent of the country's population living in rural areas.

"Rural markets will continue to be important for large mass market players that can afford the additional costs due to the strength of their distribution networks. Mid-sized consumer companies need to find effective ways of reaching these consumer segments through targeted products, pricing and channels, to fight the rural battle," it added.

New consumer segments are also evolving, such as the increasing demand for health and wellness and natural products, which are shaping the market and driving differentiation, the report noted.

With the rapid increase in the number of online devices, with around 650 million Indians expected to be online with nearly 250 million e-shoppers by 2020, these companies are expected to make further inroads into the consumer's mindshare through online and social media channels, it added.