The world's fastest-growing economy, a total population of more than 130 crores, a growing middle class and upper middle class, along with a large youth population… all these factors make India the most attractive market for any company. Huh. But still many multinational companies have recently consolidated their business from India. The latest case is of Metro AG selling its business to Mukesh Ambani's Reliance Retail. After all, what is the reason that multinational companies (MNCs) are moving out of India…
It is not even that everyone is going to MNC except in a lucrative market like India. But why didn't the companies that have gone to India like it?
Ford, Cairn, Holcim exit
Before leaving Metro AG, many other big companies took the route of leaving India. This includes auto companies like Ford, cement companies like Holcim, pharmaceutical companies like Daiichi Sankyo, and oil companies like Cairn. According to the news of TOI, there are some common reasons behind the departure of all these companies from India.
The report says that the increasing losses in the departure of all these companies, the fast-growing business models in the country, the changing priorities of the global market, and the inability to keep pace with the local competition.
Why Metro left India?
Stefan Gruebel, Global CEO of Germany's wholesaler company Metro AG, which entered India about 19 years ago, says that the Indian market has been changing rapidly for many years. Digitization is increasing in the wholesale market. To change with this change, a huge investment is needed, so that the company continues to grow.
In this e-mail sent to the employees of the company, he said that we have chosen another option, which is going to start a new chapter for Metro India. We are handing over our Indian business to a strong partner who will run the Indian business in the long run.
More brands closed
About 8 years ago, Carrefour of France also closed all its wholesale outlets in India. This business named Cash & Carry was a low-margin business. That's why Carrefour chose to leave India.
At the same time, Ford could not compete with the rest of the vehicles in the market, and could not launch its vehicle models according to the changing market time. That's why he had to wrap up his business. On the other hand, companies like Hyundai, Kia, and MG Motors that came from outside are continuously performing well.
Indian companies getting stronger
One of the reasons for many MNCs leaving India is the growing strength of Indian businessmen. For example, after buying Holcim in the cement segment, Adani Group is now one of the top cement players in the country. On the other hand, due to the entry of Reliance Industries in the telecom sector, market consolidation has increased in this segment.
Similarly, the startup boom has also given a new direction to the market, due to which the need to change the established business in front of big companies and invest in it has increased.
