The worst is over for inflation
As far as commodity inflation is concerned, the worst is over. In terms of the overall economic and the pandemic-led situation, India has coped well compared to most other countries in the world. The emerging Covid threat may not be an issue given the levels of vaccination and hybrid immunity.
The monsoon, except for a couple of states, has been good all over and the government is continuing to support the free food grain programme for a large section of the population. As a result, the consumption and margin pressure will be lower in 2023 as compared to 2022.
Large, organised players are far more resilient today in handling volatility and uncertainty and, therefore will be in a position to manage any new black swan event, if any, including supply chain challenges. The rural slump, which has been more than urban, is improving now, but we are also lapping a lower base. The government has taken proactive steps to manage inflation and with a decent crop yield, I expect a better rural performance.
Even in 2022, which was challenging, food companies did well. Packaged foods penetration is fairly low so the movement from unbranded to branded products continues to grow. In personal care, we have seen far more downtrading than in foods. In the near term, food categories have more headroom for growth while a significant growth in personal care will be driven by premiumisation as compared to penetration.
While we are seeing significant transformation in the go-to-market, there has been a couple of noticeable trends. Brick and mortar organised retail has recovered significantly in 2022 while the exponential growth rates in e-commerce have stabilised a bit. The Indian general trade continues to re-invent itself and will continue to play a strong role in years to come.
Saugata Gupta is MD and CEO, Marico.
Focus on daily shifts, not annual forecasts
As India gears up to become to be world’s fastest growing economy in 2023, some incredible learnings from the year gone by have set the stage for what will be top of mind for business leaders in the year to come.
Reality Trumps Trendspotting: In today’s fast evolving environment, trends forecast yesterday may show a completely different scenario when implemented in the real world. In 2022, we heard increasing noise around the mega trend of cryptocurrency. On Metaverse, we made a good start with some interesting use cases and are on what seems to be a longer journey towards seeing it apply to the world. Developments at Twitter showed us that even major successes are not immune to resets overnight. Clearly, we’ve learnt that ‘from the lab to use’ journey of new age innovations are often iterative, and that the success of mega trends is driven by a variety of factors including regulation, tech viability, intent, people and purpose. As trend forecasting moves from being an annual inflection to daily shifts – we need to continuously adapt to changes in the world around us.
Hello, AI!: Artificial Intelligence (AI) has taken a big leap from concept stage to new level innovations like GenerativeAI — showing that this incredible technology is here to stay. With AI at the helm of everything, the power of technology innovation in the new year will be game changing.
Next level data: It’s time to graduate from big data analytics and the ‘Data is the new oil’ mantra, as we’re stepping into the next era of Data’s evolution story. Several factors including political and socio-economic changes are now actively driving changes in the world of data and leading to a wider bench of stakeholders for us to consider. In a world where we’re all coming together to actively discuss topics like trust, privacy and content authenticity, 2023 will be the turning point of how we move forward on the trio of data, content and customer experiences.
Tech for good: In 2022, the global movement on sustainability, climate change, diversity and creative skilling has been a welcome change. In its next phase, we’re going to see technology and help the world create more impact in such critical areas and beyond.
Prativa Mohapatra is Managing Director, Adobe India
Rural demand to see gradual recovery
I am optimistic about an improved performance by the consumer goods industry in 2023. I expect urban demand to remain steady and rural demand to see a gradual recovery due to higher MSP and better farm realisation.
Moderation in inflation will boost consumption and drive volume growth in 2023. Increased direct distribution in rural areas is a growth driver. This will be further augmented by increased digital connectivity, which is enabling companies to reach under serviced pin codes across the country.
Despite global headwinds, India could continue to be among the fastest growing economies of the world in 2023, with a 6 per cent estimated growth rate in the fiscal year ending March 31, 2024. Our country’s relative resilience comes from its strong economic fundamentals, good domestic demand, growing foreign exchange reserves and prudent macroeconomic management.
In sum, reduced input cost pressures, higher capacity utilisation and increased investments in rural infrastructure will spur the Indian economy in 2023. However, in light of the rising cases of Covid-19 in some countries, we will need to be vigilant yet cautiously optimistic about the coming year.
Varun Berry is MD and CEO, Britannia Industries.
Smarter cars, more localised components
Five trends that I foresee through this year
EV will become accessible to masses: Superior driving dynamics, significant TCO (The Cost of Ownership) benefit coupled with state incentives, launch of products across price ranges and improving charging infrastructure will lead to significant increase in EV adoption.
Indian consumers will get safer vehicles: Upcoming regulations will commoditise passive safety features and OEMs (Original equipment manufacturers) would offer more active safety features to differentiate on the offerings.
Cars will become smarter: Penetration of connected vehicle features will increase and few OEMs may also experiment with 5G.
Localisation of auto technology components promoted by PLI scheme will see deliveries starting in 2023 and will ease pressure on supply chains.
Consumers will get superior experience in car buying journey as more OEMs will actively engage with customers through ‘Phygital’ model.
Shailesh Chandra is MD, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility.
Rise of first-time buyers augurs well for demand
Year 2022 was a challenging year for the global economy. We faced steep challenges in the form of geo-political tensions and inflationary pressures lately.
Amidst all the volatility, India stands firm on its economic growth trajectory. The World Bank recently revised India’s 2022-23 GDP growth forecast upward to 6.9 per cent from 6.5 per cent on the back of strong domestic demand and relatively strong position to counter global events compared to most other emerging markets. RBI’s calibrated approach towards monetary policy to effectively curb inflation while continuing to support economic growth was effective.
A robust manufacturing sector forms the backbone for the economy’s growth and the ‘Make in India’ initiative is catapulting India into a global manufacturing hub and while playing an instrumental role in boosting exports, fostering innovation and employment generation. For instance, in the air conditioner industry, we have seen an investment commitment of ₹6,632 crore and potential employment opportunity for 2 lakh people. More growth opportunities are likely to follow if additional sectors like security cameras are included under the PLI scheme.
Also, with the unlocking of economy after the pandemic and easy access to consumer finance in smaller towns has led to the rise in first-time buyers (especially in rural markets), and demand for consumer appliances is on a gradual rise, especially from Tier 2 and beyond. Consumers today are looking for smart, connected, comfortable and convenient appliances that can enhance their lifestyle while ensuring safety.
In this light, we are observing a steady increase in demand for high-value appliances that are easy to use and energy efficient such as connected ACs, refrigerators, washing machines, microwaves, and other lifestyle appliances. And this trend will continue to grow.
Manish Sharma is Chairman, Panasonic Life Solutions India and SA.