NEW DELHI: Growing consumption, coupled with demographic and lifestyle changes, are expected to drive double-digit growth for consumer-focused businesses in India over the next decade, but the regulatory landscape needs to improve.
Further, if the country wants to take full advantage of the benefits from a growing consuming class, then the Indian government should develop a national policy for the FMCG and retail sector, including a unified national market for the sector.
These are some of the key findings in the newly released Shaping Consumer Trends report from the Federation of Indian Chambers of Commerce and Industry (FICCI) and PwC, the international consultancy firm.
According to the report, India has come a long way in regulating its policies and promoting ease of doing business, but more needs to be done to bolster the "Made in India" campaign to help Indian companies compete more effectively with global players.
There is also a need to reduce the regulatory burden on Indian and foreign companies in the FMCG and retail sector where they face a plethora of taxes and regulations across numerous states.
"Globally, investors are looking at India not only for its market size but as a destination with significant long-term potential," said Akash Gupt, Partner and Leader of Regulatory Services at PwC India.
"The evolving regulatory framework and the dynamism of the government have opened new avenues and have twofold benefits on fulfilling objectives of Make in India, and of increasing consumption demand in the country. This is the time when most regulations are and should be created around consumers."
Much is at stake when it comes to smoothing the way for doing business in India because the report also revealed significant changes in consumer behaviour.
A steady shift towards e-commerce has been noted for some time, but the report also found growing demand for convenience and improved customer service.
There has also been a marked shift towards products and services that are perceived to be healthy, the report said, as well as increased use of collective social networks to provide consumers with "crowd clout" to demand improved products and services from brands.
According to Anurag Mathur, Partner and Leader of Consumer & Retail at PwC India, businesses will need to respond to these changes while also overcoming the country's infrastructure problems.
"Indian consumers' selective participation in global consumption trends and concerns coupled with local infrastructure challenges will require a unique response from companies to win and leapfrog on the growth cycle," he said.
Data sourced from FICCI, PwC; additional content by Warc staff