Piyush Goyal Piyush Goyal calls on companies to lower prices to boost consumption
New Delhi/IBNS: During a period when India Inc. is concerned about weakened consumer demand amidst a cyclical slowdown, Commerce and Industry Minister Piyush Goyal suggested that businesses prioritise competitive pricing over high margins to attract consumers.
On Thursday (Nov. 14), at the CNBC-TV18 Global Leadership Summit in New Delhi, Goyal illustrated his point with an example from Hyundai Motors India, though he didn’t directly name the company.
He noted the company’s impressive financial performance, with an EBITDA of over 21 percent and net profits around 9-10 percent.
However, what impressed Goyal even more was Hyundai's financial journey in India over the years.
“Twenty-five years ago, they invested $200 million, and in the past decade, they have remitted over $12 billion in dividends and royalties. Their market cap has soared, and the Korean promoter’s stake, following the recent listing, stands at approximately $15 billion,” he said.
Goyal highlighted the exceptional return on investment and the strong demand environment, emphasising that India offers a unique competitive advantage for manufacturers.
“India’s demand scale is unmatched, with a 1.4 billion population, a youthful workforce, and rising income levels—a vast market not only domestically but also internationally,” he remarked.
He encouraged companies to adopt more aggressive pricing strategies to boost market share.
“Smart businesses should provide better value for money. Lower prices could drive significant market growth and yield better profitability,” Goyal asserted.
He expressed confidence that competitive pricing would enable companies to capture a larger market and increase profitability.
Goyal also emphasised the power of economies of scale in India, explaining that the massive demand, fueled by 1.4 billion people and a growing economy, creates an unparalleled competitive edge.
“The scale and affordability of our market support both domestic growth and international expansion,” he said.
Furthermore, Goyal advised businesses to look beyond short-term gains, stating, “India’s scale and competitive advantages support long-term growth, not just survival through short-term volatility.”
Goyal also urged investors to take a long-term perspective and avoid reacting to short-term market changes.
“The government doesn’t operate quarter-to-quarter. Investors should also focus on the long term rather than stressing over each quarter,” he concluded.
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