Coca-Cola eyes rural market expansion in India amidst urban consumption slowdown, facing local competition with strategic playbook for success
Fast-Moving Consumer Goods (FMCG) maker Coca-Cola is eyeing expansion in rural markets in India and believes that the slowdown in urban consumption is transitory.
“It’s a feature of the developing world that consumption does not grow in a straight line and it’s important to stay patient and continue to believe in long-term opportunity and be invested. Towards the end of 2024, we had highlighted weakness in certain parts of the country. However, looking at the trends I see this more as a temporary phenomenon rather than its going to be around for some time,” John Murphy, President & CFO, of The Coca‑Cola Company said during a media roundtable.
Rural opportunity
Murphy stated that the rural opportunity is anchored in bigger brands that can scale faster while the urban markets in India have a more upscale consumer base.
“In the rural market, we will continue to expand our position. The benefit of the market is that there are ways in which one can experiment. It goes back to magic price points, one needs to learn to engineer backwards from consumers. The Rs.10 price point is crucial in India and that is something we are cognisant of and focussed on. Further, in the market getting the product to the point of sale is another area where we have made tremendous progress in the last few years,” he said.
Local competition
The company on the increase in competition from local players in the country stated that while it is challenging they have built a playbook on how to win.
“Consumption of commercial beverages in India is relatively low. The growth prospects for the industry are extremely positive as India has a young population. Personal consumption expenditure is increasing and is fuelled by urbanisation and digitisation. When we have competition in the industry, it challenges us to be at our best. The competitors in India are many with several local regional players. We have been in the business for a long time and have a playbook on how to compete,” added John Murphy.
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