Global consulting firms beef up India teams in prep for M&A snapping spree

Large consumer goods firms as well as retailers are hungry to chase India’s middle class shoppers. (HT)
Large consumer goods firms as well as retailers are hungry to chase India’s middle class shoppers. (HT)


  • PwC, KPMG, Deloitte, and Alvarez & Marsal are actively hiring in India to bolster their consumer and retail practice
  • Large consumer goods firms and retailers are hungry to chase India’s middle-class shoppers, prompting them to buy out smaller firms to grab a bigger share of the consumption pie

New Delhi: Major consulting firms are expanding their consumer practice in India in anticipation of a surge in mergers and acquisitions (M&A) and as growing prosperity in the world's fifth-largest economy fuels demand for consumer goods.

PwC, KPMG, Deloitte, and Alvarez & Marsal (A&M) are actively hiring to bolster their consumer and retail practice, said top executives at these global consulting firms.

The executives cited increased activity in the domestic sector, with both regional players expanding nationally and established companies continuing to acquire smaller firms. Established companies, meanwhile, are also seeking to improve their technology capabilities as well as expand their scope of business.

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New York-headquartered A&M is aiming to grow its consumer practice in India fivefold over the next few years.

“A&M India’s consumer and retail practice is poised to grow fivefold over the next 3-4 years," said Rishav Jain, managing director, Alvarez & Marsal. 

“This is on the back of significant opportunity that we foresee in multiple segments such as food and beverage, home improvement, food retail, digital, apparel and accessories, and consumer technology," Jain added. “This growth is likely to benefit from the growing Indian consumption story across cities and income segments."

Eyeing India's middle class

Large consumer goods firms as well as retailers are hungry to chase India’s middle-class shoppers, prompting them to either buy out small firms or partner with others in a bid to grab a larger share of the consumption market.

This trend has also led to over $2.5 billion in private equity funding and acquisitions in the fast-moving consumer goods sector over the past three years, Mint reported earlier citing data from Avendus.

Retailers are following suit, with established brands snapping up smaller players in a bid to dominate a market flooded with new online competitors. Consumers are increasingly flocking online, prompting retail giants like Amazon, Tata, and Reliance Industries to scramble for a larger footprint.

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Nikhil Sethi, partner and national leader, FMCG, at KPMG in India, said the firm plans to expand the consumer and retail practice, currently at around 800 crore.

“India is a growing economy. While there are many incumbent players, there is a lot of investment flowing in as well (both domestic and foreign). This is increasing the competitiveness in the market and businesses need to be able to differentiate in proposition and service—essentially deliver better experience. This is true for both B2C and B2B businesses," Sethi said.

“Hence, many of the levers typically seen in consumer businesses (e.g. customer experience) are becoming increasingly relevant in other businesses," he said.

Consumption to drive growth

India’s growth is linked to consumption, hence most industry will be driven by this theme. Companies will, of course, try to get closer to consumers to deliver better experience. Hence, the consumer opportunity is likely to grow manifold, Sethi added.

The firm will grow across “all areas" within the consumer vertical, he said.

Last month, Deloitte opened an innovation centre in Bangalore that offers cutting-edge retail technologies to help custom-design strategies for consumer products and retail brands. 

“Deloitte’s consumer Industry is one of our strategic priority businesses that is fast growing and aggressive with a mix of domain experts as well as technical leaders," said Anand Ramanathan, partner and consumer products and retail sector leader, Deloitte India.

PwC, too, is strengthening its presence in the sector by investing in building retail and consumer industry-specific solutions, acquiring talent and nurturing both domestic and global alliances. 

“Retail and consumer (R&C) is one of the ‘go long’ sectors for PwC. In each of these sectors, PwC has consciously invested over the past few years to dominate and expand its presence with not only domestic accounts but also India operations of global MNCs, and even with global capability centres operating in the sector," said Ravi Kapoor, retail and consumer sector leader, India, PwC.

“The sector has historically grown at rates ranging from 1.5-1.8 times of GDP growth. These growth rates have and will continue to spawn new players and brands, enhance the share of formalized and organized players and drive innovation. PwC intends to be at the forefront of this opportunity," he added.

A $100-billion pool

Meanwhile, fast-moving consumer goods makers are also spending money to boost demand. 

India’s top five million households, constituting about 2% of the population, allocate approximately $40 billion annually towards discretionary expenditures; this spending pool will swell to $100 billion over the next decade, Elevation Capital said in a report released in April.

Also read | There’s much ado about a decline in India’s household savings rate 

Fast-moving consumer goods company Dabur India has said it will continue looking for strategic fits in healthcare, home and personal care and value-added foods. The company has 6,000 crore lying on its balance sheet meant for acquisitions.

More recently, Tata Consumer Products acquired Capital Foods for 5,100 crore and Organic India for 1,900 crore. The company will continue to pursue opportunities both in India and overseas, the company's management said earlier.

In a recent interview with Mint, Rohit Jawa, managing director and CEO of Hindustan Unilever Ltd, said the company is “always" looking at targets that meet a strategic fit.

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