Multinational Companies Usurping Market Share from Local Players in Indian infant formula market: GlobalData
With robust economic growth, rapid urbanization and rising income levels, people in India are increasingly opting for convenient infant products. Against this backdrop, competition is intensifying in the Indian infant formula market as international infant formula brands are shifting their focus to capture the huge consumer base, says leading data and analytics company GlobalData.
With a total of 79 million under threes, low current levels of per capita consumption and GDP rising by over 7% per annum since 2014, the Indian market holds much promise. In its report, The Baby Food Sector in India, GlobalData forecasts that the market for baby milks will expand by 35% in volume terms between 2017 and 2021.
Until recently Nestle and local dairy firm Gujarat Cooperative Milk Marketing Federation (GCMMF) had a virtual stranglehold on the Indian baby milks market, but multinational counterparts have now begun to eye the market.
The most significant of these multinationals is Nutricia (Danone), which acquired local company Wockhardt in 2011. Danone has also begun marketing some of its international brands and now manufactures a number of these locally, as well as those that it acquired from Wockhardt.
Valerie Lincoln-Stubbs, Research Director – Baby Food at GlobalData, says: “The last few years have seen multinational rivals turn their attention to this market. As a result, the two leaders— GCMMF and Nestle — had seen their combined market share decline from their peak 90% of value sales in 2014 to 83% in 2017.”
Another local player Raptakos Brett has also lost significant share and has now been demoted to sixth place, having been overtaken by two multinationals— Mead Johnson and Abbott India.
Abbott India has been able to increase its share significantly over recent years, particularly in more affluent urban areas. In 2012, Abbott established its first nutrition research and development center in India, aiming to develop affordable science-based nutrition products specifically for the Indian market. In 2014, it opened a plant in Gujarat that now manufactures the Similac brand locally.
Lincoln-Stubbs concludes: “The battle for India’s infant formula market share is likely to intensify as manufacturers seek to establish their formulae as the brand of choice for the country’s increasingly affluent families.”