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Despite continued inflationary concerns, worries about erratic rainfall and delayed rural demand recovery, the Indian market remains one of the best bets for big global brands that have witnessed double-digit growths in the Asia-Pacific region (APAC) in the July-September quarter, The Economic Times has reported.

The APAC region includes Southeast Asia, South Asia, East Asia and Oceania.

The Indian market produced a virtual bonanza for these brands including giants such as multinationals Coca-Cola and Apple, both of which recorded the best sales and volume growth figures in quite a few years.

Other brands that have reaped a bumper harvest from Indian consumers are AO Smith, Honeywell International, Colgate-Palmolive, Unilever, Levis Strauss, PepsiCo, Pernod Ricard, Mondelez International etc. Some of these brands have also put in their best performance in the entire domain of emerging markets.

Beverages majors such as Budweiser Brewing Company said that they stood to handsomely gain from the Indian market, thanks to the inclination for consumers to go for premium offerings.

“During inflationary times, revenues tend to go up so one has to be mindful of this fact when looking at productivity. If revenues were to be inflation-adjusted, then the trend would not be so promising. Despite this, productivity has actually improved. We are seeing ding increasing use of tech and capital. Certain sectors like high-end manufacturing and services like BFSI and IT have seen increase in productivity due to higher skill sets being employed, unlike other sectors such as me transport & logistics, construction, mining and retail that still employ labour at the low level,” remarked Madan Sabnavis, chief economist, Bank of Baroda.

There has been a rise in the number of employees since FY19. While in FY19, ET-500 companies employed 61.5 lakh persons, the number climbed to 71 lakh in March FY23.

The cumulative of these companies rose at a CAGR of 12.6% in these five years. The wage bill, too, rose at the same pace.

Significantly, the services sector emerged to support this rise since the share of revenues of manufacturing companies as a percentage of total revenues (of ET-500 companies) inched down from 70% in 67% in this same time window.

“As a country grows, it tends to substitute more capital for labour-especially at a time when capital has been cheap post the global financial crisis, and now, there are technology tools available that have expedited the trend. With employee cost a proportion of revenues likely to remain in a range, profitability will shoot up, leading to increased productivity,” remarked an economist working for a leading industrial group in Mumbai.

(ENDS)