Pepsi takes aim at India

29 September 2009

NEW DELHI: PepsiCo, the US soft drinks giant, is taking a varied approach as it aims to improve its sales levels in India, including launching a range of new products and attempting to increase its appeal among young people in the country.

The American company registered an uptick in revenues of over 30% in the Asian nation last year, a result it attributed at least in part to the success of its smaller, low-cost products.

Sanjeev Chadha, chairman of the beverage maker's regional arm, said "if you are tightening your expenditure, you tighten bigger items rather than smaller items."

The introduction of variants such as a 250ml can of Diet Pepsi, priced at just 15 rupees ($0.31; €0.21; £0.20), thus helped the multinational corporation "record growth even during this time" of economic uncertainty, he added.

As part of its strategy to "increase our share of the total pie", the owner of Mountain Dew and Gatorade is also focusing on "changing the distribution system" in order to "ensure availability of soft drinks even during the winter."

Similarly, Chadha stated that the Atlanta-based firm intends to add some new offerings to its portfolio which will be regarded as more appealing by shoppers during the colder part of the year.

"We are thinking ‘What are the other beverages that we can introduce which are more winter-friendly?' So we are focusing on innovations on what we need to provide to the consumers," he said.

Other initiatives include plans to sell a wide variety of merchandise in India, and the company is hoping to bring these goods to market in the next six months.

This range would feature hats, key-rings, bags, shoes and T-shirts – the last of these items being priced between 400 to 1,000 rupees – with the possibility that Pepsi may even open its own stores.

Sally Barnes, vice president of License India, which is working on the project, said "currently Pepsi sells its merchandise at over 600 outlets in China. We are looking at a similar plan in India too."

"The global merchandise retail sales in 2005 were $320 million and are expected to touch $568 million in 2010."

"China does about $235 million and we are looking at a similar number in India as well in a couple of years."

PepsiCo has also recently developed a new advertising platform – entitled "Youngistaan" – for its main cola brand, which features five of the best-known Indian cricketers.

Hari Krishnan, executive business director of JWT, which devised the campaign, said it was based on "an insight true of all youngsters today – the fact that they are opportunity grabbers, who find their own way to get what they want in life."

Data sourced from Business Standard/Campaign India/Livemint; additional content by Warc staff