Route to Market
Coca-Cola India: Winning Hearts and Taste Buds in the Hinterland
India Knowledge@Wharton
After a series of missteps during recent years, Coca-Cola India has had to learn lessons the hard way. In the process, says the company, executives had to recalibrate the old kinks in its supply chain and bust a few myths about winning over Indian consumers, especially in the country's highly promising rural markets.
AFP/Getty Images
File Photo of a villager drinking Coke in Navallur village, some 85 kms south of Madras, April 23, 2004.
Now, the beverages of the $31 billion multinational are back on the shopping lists of Indian consumers, and Coca-Cola India is reaping the rewards. At the end of last year, its sales volume grew more than 30% and it turned a profit for the first time since it returned to the country in 1993 after a 16-year hiatus, according to Atul Singh, who was appointed the firm's Delhi-based president and CEO of Coca-Cola India and southwest Asia in 2005. Much of last year's growth for Coca-Cola -- and its rival PepsiCo -- came from urban and semi-urban markets, but experts note that Coca-Cola's rural push helped it consolidate its overall market leadership.
As in previous years, the tasks ahead for Singh and his team are clear. One of the biggest challenges is introducing a greater number of people to consuming beverages in a ready-to-drink packaged form, he says. That means getting its bottles of fizzy drinks to the right place at the right time at the right price -- a tall order in a country with such a vast hinterland like India.
Cold Drinks, Hot Markets
The reality is that the consumers Singh covets most are in hard-to-reach rural India. "Coca-Cola must realize that the future of its drink will be determined in the countryside because that is where the consumers are," says Z. John Zhang, a Wharton marketing professor. "Today's farmer could be tomorrow's city resident; you better capture that market quickly."
It's a similar scenario in China, a
India Knowledge@Wharton
After a series of missteps during recent years, Coca-Cola India has had to learn lessons the hard way. In the process, says the company, executives had to recalibrate the old kinks in its supply chain and bust a few myths about winning over Indian consumers, especially in the country's highly promising rural markets.
AFP/Getty Images
File Photo of a villager drinking Coke in Navallur village, some 85 kms south of Madras, April 23, 2004.
Now, the beverages of the $31 billion multinational are back on the shopping lists of Indian consumers, and Coca-Cola India is reaping the rewards. At the end of last year, its sales volume grew more than 30% and it turned a profit for the first time since it returned to the country in 1993 after a 16-year hiatus, according to Atul Singh, who was appointed the firm's Delhi-based president and CEO of Coca-Cola India and southwest Asia in 2005. Much of last year's growth for Coca-Cola -- and its rival PepsiCo -- came from urban and semi-urban markets, but experts note that Coca-Cola's rural push helped it consolidate its overall market leadership.
As in previous years, the tasks ahead for Singh and his team are clear. One of the biggest challenges is introducing a greater number of people to consuming beverages in a ready-to-drink packaged form, he says. That means getting its bottles of fizzy drinks to the right place at the right time at the right price -- a tall order in a country with such a vast hinterland like India.
Cold Drinks, Hot Markets
The reality is that the consumers Singh covets most are in hard-to-reach rural India. "Coca-Cola must realize that the future of its drink will be determined in the countryside because that is where the consumers are," says Z. John Zhang, a Wharton marketing professor. "Today's farmer could be tomorrow's city resident; you better capture that market quickly."
It's a similar scenario in China, a