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Even as the economy battles a consumption slowdown, Wipro Consumer Care and Lighting said its international business has been witnessing higher growth rates. The company has been focussing on strengthening its presence in the South-East Asian region through a slew of acquisitions over the past few years.
Earlier this year, it acquired Philippines-based personal care company Splash Corporation.
“With our latest acquisition in Philippines, about 54-55 per cent of our business comes from international markets. International markets are doing well. China continues to grow at a reasonable good double digit rate for us. We are seeing double digit growth rates in other international markets, too, such as Indonesia and Vietnam. In Malaysia, we are seeing high single digit growth rate,” said Vineet Agrawal, CEO, Wipro Consumer Care and Lighting.
In comparison, the company’s India business clocked a volume growth of mid-single digit in the September quarter. Known for brands such as Santoor, Chandrika and Wipro Safewash, the company closed FY19 with total revenues of ₹7,150 crore.
Over the past two months, the rural markets have been growing at a slower pace than urban markets due to stressed wholesale trade channel as well lower income levels, observed Agrawal.
“Factors such as depressed farm prices and lower rural incomes have contributed to this trend. I don’t think consumer demand in our industry has dropped dramatically but this is more due to the ripple effect of the depressed wholesale channel,” he told media persons on Monday.
FMCG analysts have been pointing to a severe liquidity crunch being faced by the wholesale channel which has led to distributors cutting down on stock levels. For instance, wholesale trade earlier was keeping stocks for three weeks; they are now keeping it for only about two weeks. This has led many FMCG companies to focus on expanding their direct distribution reach in rural regions.
Agrawal said the company has also stepped up its focus on strengthening its direct distribution in rural regions, especially in its core markets which includes Andhra Pradesh, Telangana, Karnataka, Gujarat and Maharashtra.
Last month, the company had announced the setting up of a venture fund of about ₹200 crore to invest in start-ups in categories such as personal care, skincare, home care and lighting. “We will look at investing in start-ups which focus on categories where we can add value beyond such the financial support. We will look at picking up minority stakes in the range of 20-30 per cent in such start-ups and the investment will not be more than ₹20 crore,” said Agrawal.