Marico, an Indian multinational consumer goods company, has more than 770,000 outlets in Bangladesh. Marico is well known in Bangladesh mainly for its Parachute and Saffola brand products. 44 percent of the company's international revenue comes from Bangladesh. However, the political unrest in July-September has affected their activities. Revenue has also decreased slightly.
In an interview given to Reuters news agency, Marico's Chief Executive Officer (CEO) and Managing Director (MD) Sougat Gupta said that Bangladesh accounted for 44 percent of Marico's international revenue in the fiscal year ending March 2024. That has dropped to less than 40 percent now.
About 27 percent of Marico's total revenue comes from international business. A major portion of this revenue comes from Bangladesh, Vietnam and the Middle East. Where Marico's total market value is 9.12 billion dollars.
Saugata Gupta said they are planning to expand their business in the US and East Africa and enter the Indonesian market. Bangladesh's contribution to international revenue may further decline if business increases in other regions.
The chief executive officer of Marico believes that food inflation is largely responsible for this situation. He said that the increase in price inflation is affecting the consumer goods business sector. This situation has worsened especially in urban areas. It will take at least six months for this condition to improve.
Annual food inflation in India, which accounts for nearly half of total consumption, hit a 15-month high of 10.87 percent last October. Apart from this, retail price inflation was the highest in 14 months in the same month. Inflation has increased mainly due to jump in prices of vegetables. As a result, doubts have arisen about the implementation of the central bank's interest rate reduction plan next month.
Saugata Gupta of Marico said it will take a few quarters for consumer demand in the city to recover. But if food inflation comes down to a bearable level, urban consumer demand will recover. Whenever there is food inflation, it affects consumer goods as well…consumers either buy cheaper products or cut back on consumption.
India's middle class, which makes up about one-third of the country's 1.4 billion population, is cutting back on spending due to high food inflation. This is affecting the revenue of the country's largest consumer goods companies.
Saugata Gupta said that the impact of this inflation is mainly on consumption among the middle and lower income groups, but it has not much effect on the high income people.
People's spending on luxury goods in India has been increasing in recent months. German luxury carmaker Mercedes-Benz's vehicle sales in India rose 13 percent in the first nine months of this year, the brand's best ever growth in the country. Also, sales of luxury apartments in India's top seven cities rose by nearly 38 percent during the same period.
