India's Future Growth

Contact Author Sant Sanganeria
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The fast-moving Indian consumer goods industry is valued at more than $26 billion, while the fragrance and fl avor industry is close to $260 million. This industry touches the life of every Indian and therefore has perhaps the widest reach among all industries in the country.

industries in the country. The industry has tripled in size over the past 10 years, growing much faster than in recent decades. This has been facilitated by the many changes in the Indian economic and industrial landscape—reduced levels of taxation, easier import of materials and technology, reduced barriers to entry of foreign players, growing organizational maturity of Indian players, growth of media, and, of course, the growing affl uence and appetite for consumption of the Indian consumer. The industry’s potential to grow further and faster is awesome, given the low penetration of most categories and rising consumer incomes.

Though many changes have taken place over the past 20 years, the rate of change in the operating environment appears set to accelerate. The waves of change will be propelled by government policy, channel customers, technological advances, leaders of social change such as NGOs, consumer behavior and, of course, the players themselves. Change will therefore occur along many dimensions simultaneously, in a more compressed time scale at the intersection of these change vectors. This will produce signifi cant, if unpredictable, outcomes for the industry. Over the last 20 years, almost all F&F companies have been riding the rising tide and almost all have prospered. That may, however, not hold true over the next 10 years. While the industry is set to grow at an even faster rate, in this round there could be as many losers as winners.

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