Coca-Cola's India value market share slips in June quarter
The Coca-Cola Co. said it lost value market share in India's non-alcoholic ready-to-drink (NARTD) beverages segment during the April-June quarter, as investments and affordability initiatives
The Coca-Cola Co. said it lost value market share in India's non-alcoholic ready-to-drink (NARTD) beverages segment during the April-June quarter, as investments and affordability initiatives weighed on its performance. “The company lost value share in total NARTD beverages (in Asia Pacific), as gains in Japan and China were more than offset by a loss in India,” the company said in its June-quarter earnings statement released on 28 July. The management said that three factors contributed to this- investment timing, affordability initiatives and geographical mix. Quick answers to key questions • 5 QUESTIONS 1 What factors affected Coca-Cola's market share in India during the June quarter? ⌵ Coca-Cola's market share was impacted by three factors: investment timing, affordability initiatives, and geographical mix. 2 Why did Coca-Cola introduce low-priced variants of its products in India? ⌵ Coca-Cola introduced low-priced variants to respond to stiff competition, particularly from Reliance's Campa Cola, and to attract more consumers in a price-sensitive market.
3 How did Coca-Cola's performance in India compare to other Asia Pacific markets during the June quarter? ⌵ While Coca-Cola gained value share in Japan and China, its performance in India lagged, leading to an overall loss in value share in the Asia Pacific region. 4 What is Varun Beverages' growth strategy amidst competition from Campa Cola? ⌵ Varun Beverages aims to maintain over 20% growth by focusing on larger pack sizes and expanding into newer beverage categories instead of engaging in a price war. 5 Should investors be concerned about Coca-Cola's declining market share in India? ⌵ Investors might consider the declining market share as a cautionary indicator, but Coca-Cola's broader performance and adaptation strategies should also be evaluated before making decisions. “One was investment timing, one-third of it. Another third was of the affordability initiatives that are important for us to bring the consumers to the base in the right way,” said Henrique Braun, chief executive officer of The Coca-Cola Company, in the post-earnings analyst meet.
Coca-Cola had introduced low-priced variants of its products as the Indian market faced stiff competition from Reliance's Campa Cola. Coca-Cola said it is investing ahead of the curve in cold-drink equipment and the right capabilities to gain more consumer engagement in India. “The other third is just the geo mix, because when you have India and China outgrowing, for instance, other developed markets like Australia and Japan and Korea, then you have that geo mix impact on that,” he added. The company’s unit case volume grew 5%, led by India, China, the US and Brazil in the quarter. In the quarter, the company reported net revenues up 7% to $13.4 billion in the June quarter. The company reported volume growth in many markets in Europe due to extreme summer. The company also benefitted from the American markets as it the FIFA World Cup and the demand from America's 250th anniversary celebrations.
The BriefWire