Signs of improvement are beginning to show at the Indian unit of Procter & Gamble (P&G) as the firm continues with its turnaround strategy for the country.
On Saturday, Jon Moeller, vice-chairman and chief financial officer, P&G, said during an investor call that the company had seen high double-digit sales growth in India during the July-September period. This is its second straight quarter of growth in the country.
“The large developing markets continue to perform well. We saw high double-digit growth in India. Brazil is also doing well and so is China, which saw a significant acceleration from where it was two years ago. The growth in all these markets reflects the company’s progress across the breadth of its portfolio. So, it is not one category driving sales, but all categories where we operate within these markets that are growing,” he said.
P&G, the world’s largest consumer goods company, has three operating entities in India, two listed and one unlisted, selling detergents, male grooming, feminine and baby hygiene products, shampoos, creams and oral care items. The listed companies — P&G Hygiene & Healthcare and Gillette India — are yet to declare their July-September results.
Barring male grooming, said analysts, which is facing head winds globally as well as in India for P&G, most other categories are growing.
For the year ended June 30, 2018, P&G Hygiene & Healthcare reported a turnover of Rs 24.6 billion, a growth of 6 per cent over the previous year. Comparable year-on-year growth, it said, was in double-digits. Gillette’s topline, on the other hand, declined nearly 3 per cent over the previous year to Rs 16.8 billion amid stiff competition from online male grooming and shaving brands. This space (online male grooming) is also seeing established names such as Marico, Emami and Hindustan Unilever (HUL) step into the category as growth beckons.
Both P&G Hygiene & Healthcare and Gillette India have a July-June accounting year. Unlisted P&G Home Products has April-March as accounting period. Full-year results (for 2017-18) for the latter (P&G Home Products) are yet to be declared.
In April, P&G appointed a new India chief executive officer (CEO) — Madhusudan Gopalan — with a clear mandate to improve sales growth as rival HUL, the local unit of Unilever Plc, consolidates its overall leadership in the domestic market.
In August, P&G’s global CEO David Taylor said India was among two markets, the other being Turkey, that are doing well for the global major. “Twelve of our top 15 countries held or grew organic sales in 2018 fiscal year, with six of those growing mid-single digits or faster. Turkey and India each delivered strong double-digit growth,” Taylor said, adding that the firm had more work to do in a dynamic environment. “Changing government policies include tax, trade and privacy,” he said.
“There is retail transformation, disruption of the media ecosystem, rising input and transportation costs, foreign exchange headwinds, and highly capable multinational and local competitors determined to win. We are undertaking changes to meet these challenges and improve our results further. We are building an organisation so that we can accelerate our pace of growth,” Taylor said.