Consumerist state called India
Practically, the consumer services sector in India is the most competitive, because it boasts of the most sought after careers and growth charts for candidates and companies alike. Who doesn’t want to be a part of the new ‘consumerist state’ called India?

Our search practice therefore becomes especially challenging in this secttechnology_advisoryfinancial_servicehospitality_servicesindustrial or, since case histories and personalities cloud the vision, and smartness and glib talk is sold by practically everybody in the industry. To bore beneath the surface of all that, takes Executive Access’ expert team handpicked from the industry with considerable knowledge gathered from people and processes in the Indian/Asian industry.


Sector health in India

Consumer Durables

• Most of the segments in this sector are characterized by intense competition, emergence of new companies (especially MNCs), introduction of state-of-the-art models, price discounts and exchange schemes.
  
  
• The biggest attraction for MNCs is the growing Indian middle class. This market is characterised with low penetration levels. MNCs hold an edge over their Indian counterparts in terms of superior technology combined with a steady flow of capital, while domestic companies compete on the basis of their well-acknowledged brands, an extensive distribution network and an insight in local market conditions.
  
  
• One of the critical factors those influences durable demand is the government spending on infrastructure, especially the rural electrification programme. Given the government's inclination to cut back spending, rural electrification programmes have always lagged behind schedule. This has not favoured durable companies till now. Any incremental spending in infrastructure and electrification programmes could spur growth of the industry.
  
  
• India's per capita penetration of white goods continues to remain dismal. Availability of easy financing options, increased competition resulting in falling prices and reduction in customs duty has been boosting retail sales. We expect these factors to continue to assist white goods demand going forward.

FMCG
The last three years have been a difficult phase for this sector. The volatility in agricultural sector, competition from regional players and price discounts have put pressure on topline growth. But if per-capita income is expected to grow at a healthy rate in the future, will FMCG sector continue to lag economic growth? Not likely.

• The government focus so far, has been to provide protection to the domestic companies by managing the import duty structures to the domestic advantage. The government's focus on road, rail and power development will indirectly benefit the FMCG industry in the long run.
  
  
• The push to agriculture and rural India is likely to aid rural India's development in the long run. It has the potential to induce increased usage of FMCG products going forward. Individual tax benefits too are a positive for the sector.
  
  
• Implementation of VAT is a positive move over the long term. This is likely to pave the way for a singular tax going forward, which will help companies cut costs ands become more competitive in the long run. Although there might be some initial hiccups, products and brands will become more affordable and this is a step in the right direction.
  
  Focus on improving sanitation, literacy levels, assured water supply, irrigation facilities, rural electrification and telephone networking are all measures to up India's human development index. All these are likely to positively impact productivity and employment generation in rural India and drive awareness of FMCG products. Again, this is a big positive in the long run. Tax relief to individuals too, may perk up per capita usage. All in all, the industry has much to look forward too in the long run.
  
  
• Some of the notable demands of the industry are:
  
• Complete de-reservation of consumer products sector. If it happens, it will enable Indian companies to undertake manufacturing on a mass scale resulting in operational and quality efficiencies.
  
  
• Quality check on imported FMCG products and effective enforcement of copyright laws. This would go a long way in filtering out import of sub-quality and discarded products, benefiting both the manufacturers and the consumers. Also, there should be a comprehensive policy to hit out at contraband imports.
  
  
• More focus towards networking the food supply chain, which will enable free flow of food related products across the country, to the benefit of both manufacturers and consumers. For the government, it will mean effective utilisation of food stocks.
  
  
• Excise duty difference between 'branded' and 'unbranded' food products existing at present should be removed to encourage consumers to move from unhygienic unbranded foods to hygienically packaged processed foods.

• Consumer Durable Goods
• Consumer Packaged Goods (FMCG)
• Direct & Interactive Marketing
• Fashion, Cosmetics and Luxury
• Telecom Service Providers