Brand owners upbeat in India

22 February 2012

NEW DELHI: Brand owners in India are positive about their prospects for the next three years, but face issues such as changing shopper habits and restrictive regulations, a report has argued.

PricewaterhouseCoopers, the professional services firm, polled 1,258 CEOs worldwide, and broke out the results for India, where 55% of the panel were upbeat concerning the opportunities for growth in 2012, versus 40% globally.

Looking ahead three years, 63% of Indian business leaders expressed similar optimism. While this total easily beat an international norm of 47%, it fell behind the nation's score of 90% in an equivalent study 12 months ago.

Among the reasons for this shift was the European debt crisis, currently exerting an impact on 80% of Indian companies. A further 36% said the same for instability in the Middle East, and 22% had witnessed similar consequences from last year's natural disasters in Japan.

When discussing the coming 12 months, 38% of the Indian sample believed increasing their share in existing markets was the main growth opportunity, ahead of pressing into new geographies on 30%.

Core targets included Asia, Southeast Asia and East Asia, mentioned by 90% of CEOs, ahead of Africa on 83% and the Middle East on 79%.

Another 18% of management leaders mentioned developing new products and services to fuel expansion, while 13% expressed similar hopes for forming joint ventures and strategic partnerships.

A key issue facing corporations in India is bribery and corruption, with 92% of CEOs "somewhat" or "extremely" concerned about this matter. Regulatory uncertainty also posted 86% here.

Elsewhere, 70% of CEOs agreed new spending patterns and behaviours among shoppers, largely as a result of the country's changing demographic make-up, was a test that needed to be met.

The number of people in India earning less than $1.70 a day is due to shrink from 460m to 290m from 2010-21. In this period, the emerging middle class, collecting $1.70 to $5 per day, will grow from 470m to 570m.

The middle class, claiming between $5 and $10 on a daily basis, is pegged to hit 300m at the end of this period, versus 170m at the start. Equally, the "upper middle" and above, on over $10 per day, is due to house 190m people in 2021, measured against 80m in 2010.

Data sourced from Business Standard; additional content by Warc staff