For more updates follow Grant Thornton Bharat on WhatsApp
As India's consumer industry anticipates a promising year ahead, supported by a stable inflation forecast and optimistic monsoon predictions, the growth prospects for the consumer and retail sector are drawing significant investor interest. The latest edition of Consumer and Retail Dealtracker Q2 2024 highlights how the influx of private equity investments has enabled companies to enhance technology, infrastructure, and talent, driving their expansion. The digital landscape, particularly in e-commerce and quick commerce, is evolving rapidly, with businesses focusing on sustainability and broader product offerings.
Key insights from the Consumer and Retail Dealtracker Q2 2024:
Increasing investment trends: Investments in e-commerce and subsequently, quick commerce (q-commerce) are increasing. Over the past year, we have seen q-commerce platforms strengthening their models for a sustainable business, with a reduction in market spend and higher demand generation through a wider network of fulfilment centres across geographies. Instead, the focus shifts to a wider catalogue and a cap on minimum spend for freebies and discounts.
Strategic boost for retail sector: Retail sales in India grew by 3-4% (on average) in Q2 2024, where apparel and clothing categories saw a modest 1% growth. Notably, Sky Gold Ltd acquired two jewellery companies in Q2 2024, namely Sparkling Chains and Starmangalsutra in the segment with an aim to expand the company’s total addressable market. Consumer spending on non-essentials remains cautious due to inflationary pressure on food. The industry is looking for a strategic approach to achieve economies of scale, reduce costs, and increase market share.
Uptick in deal activity driven by high value deals: The overall sector showed resilience, with a strong growth in deal values, particularly driven by high value PE transactions. Q2 2024 witnessed 94 deals valued at USD 2 billion, recording an increasing trend in values since Q3 2023. The quarter witnessed four high value deals (>100 million) valuing USD 1.5 billion compared to only two high value deals worth USD 843 million observed in Q1 2024. The trends indicate a robust investment environment, with strategic deals aimed at capitalising on growth opportunities and market consolidation.
