NEW DELHI: Procter & Gamble and Unilever, the FMCG companies, are both heightening their focus on India, where a fierce battle for market share is expected to develop in the next few years.

According to P&G, the typical Indian consumer spends under $1 (€0.74; £0.65) on its goods each year, compared with a total of $3 in China and $20 in Mexico.

More specifically, it estimated that a third of the country's 1.2 billion citizens buy its products at present, a figure it is hoping to increase by at least 500 million people over the period to 2015.

Its local arm has posted double-digit organic growth in each of the last seven years, helped by the launch of goods tailored to fit local conditions, like Pampers Magic Nicker, a low-cost cloth diaper.

Similarly, Gillette Vector Plus, a mid-priced razor, featured a button allowing users to clean the blades in recognition of the fact many men did not have access to clean running water while shaving.

"We have recently entered the market in big, global categories with top, global brands – Pampers diapers and Olay Skin Care," said Robyn Schroeder, P&G's manager of external relations.

"In multiple categories – feminine care, baby care, anti-aging, health care, blades and razors, batteries – we are the clear number one. In others, like oral care, we are a strong number two."

Hozefa Topiwalla, an analyst at Morgan Stanley India, argued that P&G "has signalled renewed aggression in emerging economies" and "is likely to introduce new products and new categories."

Given the likelihood of intense competition in India, Morgan Stanley has now downgraded its rating of the national consumer goods sector.

In one example of this trend, Procter & Gamble recently lodged a complaint with the Indian courts about a TV spot from Hindustan Unilever, in which the latter firm said its Rin detergent brand performed better than Tide.

Paul Polman, Unilever's ceo, also recently outlined the organisation's goal of doubling the revenues generated by its Indian operations.

"Unlike some competitors who are waking up now saying that India is important … we have been here for 75 years and I am not concerned about three months or six months," he said.

"We have the lion's market share in several categories and it will take hundreds of years to come where Hindustan Unilever has come."

Polman suggested in Unilever's most recent quarterly conference call that its Indian unit was "under-performing", a claim he has now qualified.

"When I called India an 'underperforming' market, I was referring to the potential in the country to grow in the next few years," he said.

"Our job is to build markets, and we know how to do market development since we know the Indian consumer."

New product development will be one key driver of this process, with Pureit water purifiers being one instance of an Indian innovation that has yielded success domestically and in countries like Brazil and China.

"There is a huge surge in local competition and we are ensuring faster innovation up and down the pyramid,” said Polman.

"We are hugely committed to product quality while also being competitive on pricing."

Data sourced from Cincinnati Business Courier/Livemint; additional content by Warc staff